June 3, 2002

Honorable Jake McGoldrick, Chair
and Members of the Transportation and Commerce Committee
Board of Supervisors
City Hall, Room 244
1 Dr. Carlton B. Goodlett Place
San Francisco, CA 94102-4689

Dear Supervisor McGoldrick:

The Budget Analyst is pleased to present this Management Audit of the San Francisco Planning Department, prepared in response to a motion adopted by the Board of Supervisors on October 15, 2001.

In Fiscal Year 2001-02, the Planning Department has a total budget of $14,929,752 and 147.43 authorized positions. Budgeted Department revenues consist of development project application fees of $9,765,000, non-fee General Fund support of $3,004,211 and grants, interdepartmental recoveries and other sources amounting to $2,160,541.

The Planning Department provides an extensive scope of services covering land use and development in most of San Francisco. While the Department"s work is often technically complex, the staff faces the additional ongoing challenge of having to conduct their analyses on individual development projects and long range plans in an often contentious environment. Every week planning staff has to interpret the complex Planning Code and develop recommendations on projects that don"t always please project applicants or neighbors. The Department operates an active training program for planning staff involved in processing development project applications.

The Department"s long range planning unit has recently embarked on several innovative approaches to their efforts involving more extensive community involvement than has typically occurred in the past. The ongoing Better Neighborhoods program and the new community planning process for five neighborhoods both are taking the approach of involving the community in updating planning and zoning regulations for their neighborhoods. To improve public access to planning issues, the Department has recently prepared a General Plan summary document that is visually appealing and easier to read than the full General Plan. To better address individual neighborhood concerns, the Department reorganized its staff responsible for processing development project applications into four geographic quadrants of the City.

The Department has made progress in a number of areas compared to the last management audit performed by the Budget Analyst in 1998. The Public Information Center is one example where substantial improvements have been made. The Department has reinstated its Planning Code enforcement effort and dedicated six staff positions for this purpose. The Department"s office facilities and computer equipment have also improved.

In spite of these accomplishments, the Budget Analyst had identified findings in 13 areas and developed 86 recommendations that address these audit findings. The findings and recommendations address a variety of issues as follows:

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• The Planning Commission has failed to comply with State laws and Charter requirements including: a) the setting of goals and objectives for the Planning Department; b) evaluation of departmental accomplishments; c) coordination with other local agencies involved in land use and planning issues, including the Redevelopment Agency and San Francisco Transportation Authority; and, d) incorporating input from the Board of Supervisors into Department goals, objectives, programs and policies.

• The Planning Department management lacks accountability to the Board of Supervisors regarding actual use of funds appropriated, project priorities, project progress, and project timelines as exemplified by the Director"s decision in FY 2001-2002 not to conduct environmental reviews of Planning Department and Board of Supervisors-initiated projects that rely on General Fund support, although that activity was included in the Department"s FY 2001-2002 Work Program provided to the Board of Supervisors prior to their approval of the FY 2001-2002 budget.

• The City"s Planning and Administrative Codes allow for the extensive use of Conditional Use and Discretionary Review in San Francisco compared to other California cities and counties, giving the Planning Commission latitude to approve a wide variety of projects that, cumulatively, are inconsistent with either the General Plan or the intent of the Planning Code. Such inconsistencies are exemplified by approval of four large retail buildings in the Upper Market commercial district that exceeded the size otherwise allowed under the Planning Code, increasing the number of large retail establishments in a district zoned for moderate scale development.

• During the five year time period starting in March 1997 through the present, the Planning Department and Planning Commission have been reviewing and studying industrial protection zone controls but have still not developed permanent controls in this area, resulting in one neighborhood, the Mission District, developing its own controls approved by the Board of Supervisors without Planning Department participation.

• The Planning Department has not developed procedures to ensure community involvement in the long range planning process as is regularly accomplished in jurisdictions such as San Jose, Portland, Oregon and San Diego County through established advisory committees and forums.

• The Planning Department is deficient in management of the Department"s long range planning process, including promising more in the Department"s annual Work Program that can be accomplished with the staff assigned, not completing projects by its Work Program deadlines and shifting of significant project priorities and deadlines contrary to the Department"s Work Program or representations made to the Board of Supervisors by Department management without input from the Board of Supervisors. Examples include preparation of an Urban Design element for the General Plan, which began in FY 1999-2000 with an expected due date of June 2000 but is still not complete. Similarly, preparation of a Land Use element for the General Plan began in FY 1998-1999 with an expected completion date of June 1999 and is still not complete.

• The Planning Department does not comply with State Permit Streamlining Act requirements that (a) set limits on processing time for development project applications of 60 days for most projects that require Planning Commission approval; (b) set time limits on environmental review processing of 180 days for projects that receive a Negative Declaration of environmental impacts; (c) set time limits on how long the Department can take in determining if an application is complete; (d) require disclosure of information about application processing timelines and application information requirements to the public. In the Budget Analyst"s sample of 19 projects which required approval by the Planning Commission, the median processing time was 80 days, which is 33 percent or 20 days in excess of the 60 days allowed by the Permit Streamlining Act. The longest processing time in the sample was 296 days. In a sample of environmental review cases, the median processing time was 211 days, or 31 days in excess of the 180 days allowed by State law.

• The Department does not maintain a system for tracking and monitoring actual application processing times.

• The Department"s Planner staff turnover rate increased every year since FY 1997-1998 through the current fiscal year. Under the present Director of Planning, between July 2000 and September 2001, 25 staff planners, or approximately 30 percent of all staff planners, resigned due in part to better pay and opportunities elsewhere but also attributed by many former and current employees to low morale in the Department and lack of management support.

• The Department"s management structure includes a Planner V with an annual salary and benefits costs of $132,328 and five Planner IVs in the Major Environmental Analysis unit with annual salary and benefits costs of $111,512 each at the maximum step. These positions and salaries are not justified by the number of staff reporting to these positions or the functions overseen. By consolidating the Department"s administrative functions and 21 positions under a single manager and assigning the same ratio of supervisors to staff planners in Major Environmental Analysis as in other units of the Department, the Planner V position could be deleted and three Planner IVs could be reclassified to Planner IIIs, reducing annual salary and benefits costs by $184,789.

• Planning fees are recovering more than actual costs for some types of applications and not fully recovering the costs for others, reflecting the absence of a fee-setting methodology based on a consistent, systematic approach to identifying and incorporating all appropriate direct and indirect costs into the Department"s fees.

• The Department does not plan adequately for enhanced use of information technology, has inadequate system documentation and quality controls over existing computer applications and data input, as exemplified by the absence of a computerized environmental review caseload tracking mechanism, and insufficient coordination with the Department of Building Inspections" computerized permit tracking application.

• The Department"s management needs to better inform staff about and encourage participation in training opportunities.

• The Department has a backlog in Code Enforcement cases of 3,550 that should be cleared.

• The Department does not collect Code Enforcement fees as allowed by the Planning Code.

Recommendations included in this audit report would:

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• clarify and codify annual Department goals and objectives and improve Board of Supervisors involvement in setting goals, objectives and priorities;

• improve the Department"s reporting and accountability to the Board of Supervisors through an annual report of actual Work Plan accomplishments;

• increase and formalize community involvement in the long range planning process;

• establish a management mechanism for monitoring and enforcing Department compliance with State development project application processing time limits and information disclosures to the public;

• improve management"s efforts to reduce staff turnover;

• streamline the management structure by reducing the number of management and supervisory positions in the Department through reorganization;

• rationalize the method for determining Department fees to ensure that all appropriate direct and indirect costs are recovered;

• establish a multi-year plan guiding the use and enhancement of the Department"s information technology;

• document and improve quality control of existing information systems; and

• enhance Planning Code enforcement.

The following summarizes the findings contained in our report.

1. Commission Compliance with State and Local Mandates

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• The Planning Commission is not fulfilling three of its key State and local mandates: 1) formulating, evaluating and approving goals, objectives and plans and programs for the Planning Department; 2) setting policies consistent with the overall objectives of the City and County as established by the Mayor and the Board of Supervisors in accordance with legislation approved by the Board of Supervisors of San Francisco; and, 3) promoting coordination of local plans with the plans and programs of other public agencies.

• Commission formulation and evaluation of goals, objectives and plans and programs can best be accomplished through a multi-year strategic planning process. Such a process, with linked goals, objectives and action plans and a system for measuring actual results is not in place.

• Input by the Board of Supervisors regarding the goals, objectives and policies for the planning function is limited primarily to the annual budget process and independent adoption of legislation by the Board. The Planning Department does not have a process to work collaboratively with the Board of Supervisors in developing significant planning related policies or goals and objectives with the Planning Commission. Using the budget process to fulfill this role has limitations because of the budget"s single year time frame and because of the Director"s discretion to transfer funding between projects and because of inconsistencies between the Department"s Work Program and budget structure. The Department"s accountability to the Board of Supervisors is limited because a method does not exist for reporting actual Work Program activities accomplished, projects completed or other measures of Department performance.

• Coordination of plans between the Planning Department and other agencies involved in local land use and planning is required by State law. A number of local agencies report that Planning Department coordination efforts are not satisfactory. For example, the San Francisco Transportation Authority reports that it had no forewarning of an idea presented by the Planning Department to ban vehicles on Van Ness Avenue even though such action would have significant impact on Citywide transportation projects and funding for which the Authority is responsible. A review of the Department"s accomplishment of activities specified in formal agreements with two local agencies, the Redevelopment Agency and the Transportation Authority, shows that the Department is not fulfilling its requirements in coordination with these agencies.

Recommendations

The Planning Commission should:

1.1 Prepare a long range strategic plan integrating a broad set of short- and long-term goals, objectives and action plans for the Commission and the Planning Department, including timetables and specific measurements of plan accomplishment;

1.2 Establish an annual process for formally receiving input from the Board of Supervisors and the public regarding goals and objectives for the planning function and incorporate them into the establishment of and annual updates to the strategic plan;

1.3 Develop a process for annually evaluating accomplishment of the strategic plan including measurements of actual performance and timetables of projects and activities included in the plan;

1.4 Require the Planning Director to structure the Department"s annual Work Program to present the link between planned activities and strategic plan goals and objectives;

1.5 Require the Planning Director to provide a detailed reconciliation between the annual Work Program and the budget each year after the annual budget is adopted and to provide this to the Commission and the Board of Supervisors;

1.6 Establish coordination and cooperation with other City agencies as a performance measurement for the Planning Director and measure actual results in this area through an annual survey of other agencies involved in planning and land use, to be presented to the Commission.

The Planning Director should:

1.7 Include supporting information with the Planning Department"s budget in order to delineate expenditures and revenues for each of the Department"s five divisions.

Costs and Benefits

There would be no new direct costs incurred by the Department in implementing these recommendations. The benefits would include establishment of a set of goals, objectives and priorities to guide Department management in allocating staff and other resources. These goals, objectives and priorities would include input from the Board of Supervisors, obtained through a formalized collaboration process. Action plans would be established that are tied to an overriding set of goals and objectives and a process for evaluating actual accomplishment of the goals and objectives would be in place. A consistent structure would be applied to the Department"s annual Work Program, the budget approved by the Board of Supervisors and the Department"s organization structure, enabling the Planning Commission and the Board of Supervisors to better understand the actual impact of funding of programs and activities. The Department would become more accountable for its activities through regular reports to the Commission and the Board of Supervisors showing actual projects and work performed each year compared to work planned and funded for the year. Coordination and cooperation with other local agencies involved in planning would be monitored and improved, based on the results of an annual survey of those agencies.

2. Planning Commission Discretion

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• Unlike many other California cities, Conditional Use and Discretionary Review applications comprise the majority of items considered by the Planning Commission in San Francisco. These cases give the Planning Commission broad latitude including not approving development projects otherwise allowed by the Planning Code or approving projects without consideration of their precedent setting cumulative impacts. The fact that 60 percent of all cases heard by the Planning Commission in 2001 were Conditional Use and Discretionary Review cases is an indication of Planning Code shortcomings, adds significant cost and time requirements to the approval process and lends to the perception of an arbitrary and political approval process.

• Because of the frequent use of Conditional Use approval or Discretionary Review, approval of many planning projects is uncertain. Significantly, one goal of the Better Neighborhoods Program, which will add new neighborhood plans to the Planning Code, is to reduce uncertainty for planning projects in the neighborhoods. The Better Neighborhoods area plans will use a program Environmental Impact Report (EIR) and a development and zoning plan for the neighborhood. If a proposed project complies with the program EIR and neighborhood development and zoning plan, then the project would be approved administratively. These new plans should also result in a reduction in Discretionary Review applications as acceptable development standards will have been defined by the community.

• The Planning Code needs review to identify instances when allowing projects through Conditional Use approval could result in failure to conform with the General Plan or the intentions of the Planning Code. The Planning Department should identify and propose revisions to the Planning Code that would result in firmer zoning controls that allow Code compliant projects to be approved administratively by the Department. Such a review should include a community planning process, such as community planning committees in which communities can participate in defining acceptable development in their areas.

Recommendations

Based on the above findings, we recommend that the Director of the Department of Planning:

2.1 Review the Planning Code to determine instances where application of Conditional Use could result in failure to conform with the General Plan or comply with the intentions of Planning Code regulations, particularly on a cumulative basis;

2.2 Assign Citywide Policy and Analysis and Neighborhood Planning staff to work with community planning committees to identify and propose Planning Code changes that set firmer zoning requirements for projects within specific zoning districts; and,

2.3 Present a proposal, including goals, timelines, and measurable results, to the Board of Supervisors during the FY 2002-2003 budget process for the review of the Planning Code application of Conditional Use.

Costs and Benefits

The above recommendations would increase overall conformity with the General Plan and reduce inconsistencies between the General Plan and the Planning Code by setting clearly-defined limits for projects in each zoning district and reducing the number of projects approved on a case by case basis. Further, the above recommendations would allow more consistent community participation in identifying the types of projects suitable for their zoning district. A reduction in the number of Discretionary Review cases should also result as community members are allowed to define acceptable development for their neighborhoods.

The Department should incorporate the proposed process for revising the Planning Code into existing or proposed Department community planning programs and to adjust the annual Work Program to accommodate the Planning Code revision process.

3. Industrial Protection Zones, Live/Work Projects and Community Plans

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• There has been significant neighborhood opposition, numerous Planning Commission hearings and adoption of many resolutions regarding live/work projects in the City"s industrial zones and surrounding neighborhoods over the last five years.In spite of that, in the four-year period from 1997 through 2000, more than 1,400 live/work units were completed and 3,148 were in the pipeline. During that period and through today, the Planning Department has not proposed and the Planning Commission has not adopted permanent zoning controls for the industrial zones. Because the Planning Department was not responding to concerns about live/work and office development in the Mission District, that neighborhood developed their own interim zoning controls, which were adopted by the Board of Supervisors, without Planning Department participation. The Planning Department only began a community planning process to develop permanent zoning controls in the City"s eastern neighborhoods, including the Industrial Protection Zones (IPZs), in the fall of 2001.

• Not just the construction of live/work projects, but the failure of live/work projects to be used either as artist work spaces or, in some instances, as residences at all, was discussed before the Commission by neighborhood organizations, community members, and staff on many occasions. Due to the lack of Planning Code clarity on the extent to which the live/work unit occupant must engage in arts activities or on the definition of "work" as a component of "live/work", the Planning Department has determined that enforcing the art or work component of live/work is not feasible. Because the cost of live/work units is high, they are no longer affordable as artist work space, and some live/work units in the Mission and South of Market have been reportedly converted to office use. Although in the May 1999 Planning Department report to the Planning Commission, the Department listed failure to enforce Planning Code live/work regulations as one of the contributors to the growing problem of live/work development, the Planning Department did not have a team dedicated to enforcing planning regulations prior to FY 2001-2002.

• Conditional use approval and discretionary review of live/work projects has resulted in a large number of live/work projects being developed. Though the Planning Commission has found otherwise, the cumulative effect of these live/work projects do not conform with General Plan policies, especially policies to conserve and promote housing development and neighborhood character, produce affordable housing, and protect industrial and service sectors from displacement.

Recommendations

Based on the above findings, the Director of the Planning Department should:

3.1 Submit amendments to the approved annual Work Program and budget in writing to the Board of Supervisors, as well as the Planning Commission, with an explanation of the Department"s reasons for selecting reductions to each program, in order to ensure that sufficient resources are allocated to the long range planning process and the development of zoning controls in the traditionally industrial zones of the City;

3.2 Develop a stricter definition of "live/work", including defining live/work projects as housing and defining the zones in which live/work projects are permitted, and recommend Planning Code revisions to the Planning Commission;

3.3 Rigorously identify which projects are permitted or not permitted and limit the types of projects subject to conditional use in developing the community plans and the permanent zoning controls and recommend Planning Code revisions to the Planning Commission; and,

3.4 Develop a formal tool for assessing and incorporating community input in the community plans.

Costs and Benefits

By developing a stricter definition of "live/work" in the Planning Code and limiting the types of projects subject to conditional use or discretionary review in the new proposed zoning controls, the Planning Department and Planning Commission would make clear the types of projects permitted under the Planning Code, and would reduce the cumulative impact of projects which fail to conform with the General Plan. Developing a formal tool to assess and incorporate community input into the community plans would give community organizations a clearer voice in the planning process. Submitting written amendments to the annual work program and budget to the Board of Supervisors would enable the Board of Supervisors to more closely monitor the allocation of resources to long range planning programs.

These recommendations can be incorporated into the existing Planning Department community planning process without additional costs.

4. Community Participation

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• The Planning Department has only recently engaged community organizations in policy and long range planning. Although the Department created the Neighborhood Planning Unit and organized current planning functions into neighborhood teams in FY 1997-1998, the neighborhood teams have not worked regularly with neighborhood organizations. Prior to FY 1999-2000, the long range planning process was not structured to promote community involvement in the planning effort. In FY 1999-2000 the Department implemented a comprehensive neighborhood planning program, the Better Neighborhoods program at the initiation of San Francisco Planning and Urban Research (SPUR), which incorporates community input into the planning process. The Department has recently implemented a community planning process in the five eastern neighborhoods of the City to develop new permanent zoning controls in those neighborhoods.

• Planning Commission meetings are not generally structured to discuss policy matters and engage the community in the decision making process. The Planning Commission considers individual planning projects far more often than broader Citywide policy matters. Community members can speak to specific projects or during the public comment period now scheduled for the end of each meeting, but the Commission does not regularly schedule public hearings on policy or planning issues, and therefore, does not provide an ongoing forum for community input on policy and planning.

• An alternative to San Francisco"s approach to community planning would be to establish ongoing community planning committees. The cities of San Jose, Portland, Oregon and San Diego County, for example, have formed regional planning groups to advise their legislative bodies, planning directors and planning commissions on long range planning policies.

Recommendations:

Based on the above findings, the Board of Supervisors should:

4.1 Establish advisory community planning committees in each of the eleven districts of the Board of Supervisors and appoint representatives to the community planning committee within the district; and,

4.2 Consider establishing a steering committee, comprised of one representative from each of the community planning committees, and an advisory interest committee, comprised of members of professional architecture and planning associations, building and land use groups, environmentalists, and other stakeholders in the planning process.

The Planning Commission should:

4.3 Establish regular planning policy workshops to provide an opportunity for Commissioners and community members to participate in a more general discussion about planning issues.

The Planning Department should:

4.4 Develop work plans that incorporate the community planning committees in developing General Plan and Planning Code proposals.

Costs and Benefits

These proposals would create an ongoing process for the community and stakeholders in the planning process to advise the Board of Supervisors, the Planning Commission and the Planning Department. The proposals would also provide a forum before the Planning Commission to discuss planning policy overall.

The establishment of the community planning committees would not have a direct cost impact. Working with the community planning committees should be incorporated into the existing Planning Department budget.

5. Long Range Planning Program Management

• The Planning Department"s Citywide Policy and Analysis Unit projects are often not completed by their target completion dates. Delays in project completion ranging from five months to more than three years were found for at least ten projects. The Citywide Policy and Analysis Unit carries some projects forward from year to year, such as revision of General Plan elements, and submits new deferred target completion dates in its subsequent annual Work Programs. For ongoing projects, the Citywide Policy and Analysis Unit does not always dedicate sufficient resources to accomplish the activities outlined in the Work Program.

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• Several factors lie behind the Planning Department"s inability to consistently complete its long range planning projects. Long range planning priorities can change during the course of the year, causing the Department to set aside or delay projects with longer timelines for new projects with shorter timelines.

• In other instances, the Planning Department proposes long range planning projects in the annual Work Program but then does not have sufficient resources to complete all projects as the Work Program is not balanced with budgeted resources.

• The Department"s Citywide Policy and Analysis Unit does not consistently develop formal work plans and timelines for all of its long range planning projects.

• The Planning Commission has not directed the Planning Department to complete and present draft policies, such as the Land Use and the Preservation Elements. Because the Planning Commission does not call for draft policies to be scheduled on the Commission"s agenda for public hearing, longer term planning projects are set aside for more short term projects. Although priorities are often determined by the immediacy of a project, draft General Plan elements that underpin the long range planning process remain unfinished.

• The Director of Planning and the Chief of Citywide Policy and Analysis need to work with the Planning Commission, the Board of Supervisors and the community to define long range planning priorities for each coming year, including identifying and maintaining sufficient resources to achieve long range planning goals.

Recommendations

Based on the above findings, we recommend that the Director of the Planning Department:

5.1 Identify and maintain sufficient resources to achieve the Department"s long range planning goals and present changes in the Citywide Policy and Analysis Work Program to the Planning Commission for public review and discussion;

5.2 Develop well-formulated realistic work plans for long range planning projects and rigorously monitor work plan timelines;

5.3 Work with the Planning Commission to request the completion of and public hearings regarding draft long range planning policies before the Commission; and,

5.4 Direct the Chief of the Citywide Policy and Analysis Unit to present monthly status reports to the Director of Planning on all projects, including all hours spent compared to the number planned, milestones accomplished, and explanations for any delays.

Costs and Benefits

Our proposed recommendations would not result in increased costs to the City. These recommendations would assist the Planning Department set long range planning priorities and achieve long range planning goals, consistent with the goals of the Planning Commission, the Board of Supervisors and the community.

6. Permit Streamlining Act

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• State law governs many aspects of the development project approval process administered by planning agencies. It requires that certain information be provided to applicants and sets time limits on the key phases of the application review process including determining if an application is complete, analyzing and acting on proposed projects and environmental review.

• The various State Government Code sections known as the Permit Streamlining Act require that development project applications be reviewed and their completeness determined within 30 days of submission. Once determined complete, processing and making a decision on the application can consume no more than 60 days for cases that do not require an environmental impact report. For those cases requiring environmental review that receive Negative Declarations of environmental impact, environmental review can take no more than 180 days.

• The Planning Department is not operating in compliance with State time limits on development project applications. The process for determining completeness is unclear and often consumes more than 30 days. Median processing time for a sample of 19 cases approved in 2001 that did not require environmental impact reports was 80 days, which is 20 days more, or 33 percent, than the 60 maximum days allowed by State law. A similar analysis of environmental review case processing time is not possible because the Department does not keep records of when applications are determined complete, the starting point for State environmental review time limits. However, median processing time for a sample of 56 environmental review cases was 211 days, or 31 more than the 180 day maximum allowed by State law. Even if staff took the full 30 days allowed by State law to determine application completeness on all these cases before beginning their evaluation, 28 cases, or half of the cases reviewed, still exceeded the State time limits.

• The Department does not have a system in place for tracking compliance with Permit Streamlining Act time limits. Many of the key dates needed to determine compliance are not recorded on the Department"s case tracking computer system making it impossible to determine compliance with the State time limits without a manual review of case records. While applicants are just as often the source of delays in case processing as staff, the Department does not have a method of suspending cases where applicants are the source of delay.

• Application forms and materials are confusing and do not provide written information to applicants required by State law. The State requires disclosure of Permit Streamlining Act time limits for determination of application completeness and case processing, a list of materials required for each type of application to be determined complete and the criteria by which the Department determines if applications are complete.

Recommendations

Based on the above findings, it is recommended that Planning Department management:

6.1 Clarify the process and instruct staff on what qualifies for determining application completeness and the need to comply with the State mandated 30 day time limit;

6.2 Revise all Department application forms, printed materials and the web site to include: detailed lists of all information and materials that will be required of applicants, including items that are not mandatory but commonly required for project types most frequently reviewed by the Department;

6.3 Revise all Department application forms, printed materials and the web site to state that all applications will be reviewed and their completeness determined within 30 days of submission and to disclose the criteria by which completeness will be determined;

6.4 Revise all Department application forms, printed materials and web site to include disclosure of all Permit Streamlining Act and California Environmental Quality Act (CEQA) time limits;

6.5 Instruct all staff on time limits and the importance of compliance;

6.6 Add necessary data collection ability to the Parcel Information Data Base to capture all key milestone dates needed for compliance with State case processing time limits, including date application submitted, date application determined complete/incomplete, date Initial Study of environmental impacts completed, date of environmental review action, and date of final action on application;

6.7 Add necessary data collection ability to the Parcel Information Data Base to capture other key dates in the process to identify backlogs such as date of case assignment to a planner, date work commenced, and others;

6.8 Collaborate with the Department of Building Inspection regarding adding fields to collect key milestone dates on the Permit Tracking System to track Permit Streamlining Act compliance, case backlogs and pending applications;

6.9 Assign responsibility for accurate and complete data entry by their staffs to all Department neighborhood Planning managers; and,

6.10 Begin production of a regular monthly report for the Director showing compliance with Permit Streamlining Act and CEQA requirements, case backlogs and other relevant information to enable management to expedite permit processing to the extent possible.

Costs and Benefits

There would no new direct costs associated with these recommendations. Modifications to the Department"s Parcel Information Database System should be able to be accomplished in-house and revisions of forms, brochures and the web site should not result in costs of any significance to the Department. The benefits of the recommendations would include a more clear, well documented process for applicants, improved management oversight of the environmental review and case review processes, management information reports necessary to facilitate changes in processes or staffing to expedite case processing, and improvements in case processing cycle time.

7. Planning Staff Turnover and Vacancies

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• Turnover for Planner staff in the Planning Department since FY 1997-1998 has increased steadily. The turnover rate in FY 1997-1998 was 9 percent and doubled to 18 percent in FY 2000-2001. From July 2000 through September 2001, 25 Planners in Planner II through Planner V classifications resigned from the Department, or approximately 30 percent of the staff in those classifications. Due to the high turnover, the Department has a correspondingly high number of vacancies. The average number of vacancies in any given month for all positions in calendar year 2001 was 13.67, or approximately 10 percent of the staff.

• Turnover among Planners has resulted from multiple factors, including poor morale due to high workload and lack of management support, lack of career opportunities within the Department, and higher pay and better job opportunities elsewhere.

• Frequent vacancies and hiring of new staff has resulted in insufficient or inexperienced staff performing the work, thus increasing the workload for existing and more experienced staff. Turnover has resulted in insufficient experienced staff to process more complex cases and in backlogs in processing planning development projects applications. While turnover is costly in any organization, it has particular impact in the Planning Department where institutional history plays a key role in interpreting the Planning Code for development project applications.

• While some turnover will always occur, the Planning Department should implement policies to minimize internally caused turnover by improving staff morale, improving communications between planning staff and the Department management and Planning Commission, increasing career opportunities, and promoting a flexible working environment. Such policies should include ongoing morale surveys, new and more frequent communication channels between senior management and Planners, flexible work schedules, and regular study sessions with staff Planners and Commission members.

Recommendations

Based on the above findings, it is recommended that the Director of the Planning Department:

7.1 Require Department managers to conduct annual performance evaluations for all staff Planners to increase the level of communication between management and staff and to provide feedback to staff on job performance;

7.2 Conduct annual morale surveys to identify workload problems, communication failures between staff and Department management or the Planning Commission, and other factors contributing to poor staff morale. The results of the morale survey should be presented to the Planning Commission and used as a factor in an annual evaluation of the performance of the Department Director;

7.3 Increase work opportunities for staff Planners by assigning Neighborhood Planning staff to special projects other than application processing and establishing teams from Citywide Policy and Analysis and Neighborhood Planning to work on specific issues or geographic related tasks;

7.4 Improve communication between staff and senior management, by delegating more decision making responsibilities to Planner V staff, regularly attending division staff meetings or holding regular Department-wide staff meetings, increasing Zoning Administrator drop-in hours, and setting up communication channels, such as regular email access;

7.5 Assist new and inexperienced staff in Neighborhood Planning by assigning mentors to junior staff and increasing team leader participation in project reviews;

7.6 Adopt and implement the Department"s draft policy for reduced work schedules and draft a telecommuting policy; and,

7.7 Ensure that in the future, exit interview results for all separating employees are captured through use of the City"s new Exit Interview Survey and regularly reported to management with recommendations for any necessary remediation.

It is recommend that the Planning Commission:

7.8 Implement regular study sessions for Planning Department staff and Commission members to discuss planning policies and procedures.

Costs and Benefits

The above recommendations would not result in increased direct costs. Because these recommendations are intended to improve staff morale and reduce turnover, successful implementation would result in reduced costs from decreased turnover, job vacancies, and hiring and training of new staff.

8. Efficiency and Effectiveness of Public Information Center (PIC)

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• The Department"s Public Information Center (PIC) is one of the primary points for staff planners to provide information to the public. However, (a) service and information are unevenly dispensed, (b) policies and procedures for service provision at the PIC are not up to date, (c) physical arrangements and signage at the PIC are inadequate and sometimes confusing for the public, (d) accurate and useful data regarding public use of the PIC are not collected, (e) available technology applications are not used at the PIC, and (f) staff assignments to and rotation at the PIC are not made uniformly. Taken together, all of these symptoms reflect an operation that--while perhaps improved over historical service-- remains inefficient and does not always evidence necessary quality assurance measures in providing information.

• Since the Budget Analyst"s 1988 audit of the Planning Department, it has implemented the two recommendations made at that time for the Planning Commission; (set specific objectives for providing information services and establish hours of operation), and four of the six recommendations for the Director; full-time planners allocated to PIC, handout materials review, Information Manager reporting to Director, and enhance status of Information Office.

Recommendations

Based on the above findings, it is recommended that the Planning Director:

8.1 Accelerate the physical improvements to the PIC that expand the service area, revise signage, eliminate the 15-minute time limit on staff services (sign), install improved seating, and move telephones;

8.2 Employ a revised tally sheet to ensure useful and accurate data are collected, including:

8.3 Emphasize the importance of PIC training for staff and see that service data are used to develop targeted instruction;

8.4 Encourage reservations for persons wishing to access planning services at the PIC;

8.5 Consider reviving the internal Planning Code Simplification Project to determine what resources are needed for its completion and then schedule if practicable;

8.6 Update, then implement a streamlined policy and procedures manual for the PIC including discussion of basic customer service and the importance of communicating to customers that help will be forthcoming when there are backlogs at the Counter;

8.7 Develop an assignment and rotation system that ensures balanced staffing for the PIC from all organizational units and enables employees who have expressed a preference for the PIC to be assigned beyond their scheduled shifts;

8.8 With assistance from the Department"s Chief Financial Officer, prepare and implement written procedures for handling cash at the PIC;

8.9 Designate a set number of hours per week for assigned staff to work exclusively on updating all handout materials; and

8.10 Vigorously encourage and support the prioritization of on-line computer applications as a means to provide accurate, consistent and timely information to users of the Department"s services.

Costs and Benefits

Costs to the Department for expansion and improvement of the Public Information Center cannot be accurately determined at this time, in part because of the potential funding from the Friends of Planning, a not-for-profit organization dedicated to providing resources to the Department. Similarly, implementing some of the information systems solutions is already budgeted -these item are more a matter of timing than of funding. Other proposed recommendations are actually net no-cost methods that replace existing practice. Overall benefits include more effective and consistent service delivery, and improved employee morale.

9. Organization and Management Structure

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• Besides the Director and the Zoning Administrator, the Planning Department"s management team is comprised of six Planner Vs, one Manager of Finance and Administration, and the Planning Commission Secretary. The Planner Vs oversee 119 of the Department"s 147 authorized full-time equivalents. The Manager of Finance and Administration oversees eight and the Planning Commission Secretary oversees five administrative positions.

• Responsibilities are not equally distributed between the six Planner V"s. Three share management responsibility for all Neighborhood Planning functions including processing development applications, code enforcement, building permit review, and the landmarks process; one is responsible for long range planning, one is responsible for environmental review and the sixth Planner V is responsible for information systems and the Public Information Center. Given the lower number of functions and staff positions in the Information Services/Public Information Center unit compared to the other units, management of this unit by a Planner V position at an annual salary and benefits cost of $132,328 at the maximum step is not warranted or appropriate.

• The Department"s 21 administrative positions are now split between three managers, one of whom is also Secretary to the Planning Commission. Consolidation of all administrative functions under a single manager would result in more efficient operations and would also allow the Department to streamline its management structure by deleting one manager position through attrition and reduce its management costs by approximately $132,328 per year in salaries and benefits. The number of reporting positions under a consolidated administrative structure would be appropriate for a position at the level of the Manager of Finance and Administration.

• The number of supervisors per staff planner in the Major Environmental Analysis Unit is 3.2 compared to a median of one supervisor for every 6.5 planners for the rest of the Department. By applying the 6.5 median supervisory ratio to the Major Environmental Analysis unit, the number of supervisors could be reduced by three, by reclassifying downward three Planner IV positions to three Planner III positions, reducing salary and benefits costs by approximately $52,461 per year.

Recommendations

Based on the above findings, it is recommended that the Board of Supervisors:

9.1 Delete one Planner V position from the Department"s budget when attrition allows;

9.2 Reclassify downward three Planner IV positions to three Planner III positions from the Department"s budget when attrition allows.

The Planning Director should:

9.3 Restructure the organization by transferring the administrative functions now under the Planning Commission Secretary and the Information Services division now under a Planner V to the Manager of Finance and Administration.

9.4 Transfer responsibility for the Planning Information Center to the Zoning Administrator as manager of the Neighborhood Planning unit.

Costs and Benefits

Benefits of the above recommendations would include consolidated administrative services, all reporting to a single manager, better utilization of the Manager of Finance and Administrative position and more equitable levels of responsibility for all managers and supervisors. Salary and benefits costs would be reduced by approximately $184,789 per year at the maximum salary step ($132,328 for the deleted Planner V + $52,461 for the three Planner IVs reclassified to the Planner III classification).

10. Department Fees and Cost Recovery

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• The Department"s fee revenues of $10.2 million recovered approximately 75 percent of the Department"s costs in FY 2001-02. A high recovery rate is predicted for FY 2001-02 though less than the previous year due to the economic slowdown. Approximately 90 percent of all fee revenue is generated from just five development project application types: 1) building permits; 2) conditional use approvals; 3) environmental review; 4) variances; and, 5) downtown control exceptions.

• The Department does not use a single method for determining its development project application processing fees. Some are based on project valuations, some on estimated staff costs and some on a time and materials basis. State law mandates that revenue from these fees cannot exceed the actual costs incurred in processing the applications. Most of the Department"s fees currently recover more than the related costs using the Department"s current cost estimating techniques, contrary to State law. However, all actual costs of processing applications, including direct staff time, appropriate indirect costs such as information systems support, related long range planning, and administrative support, are not properly accounted for in the existing fees. The Department needs to rationalize its fees by ensuring that all costs that contribute to application processing are included in its fees.

• The Department does not have a single integrated system for tracking staff hours and application revenues. There are discrepancies in the three sets of computerized records that now store the information needed to analyze costs and revenues by application type. Data input by staff in to the Time Accounting system is not verified or subject to quality control as it should be before being used as the basis for fees.

• The Department is subject to variations in its main revenue sources based on economic cycles. This can affect its ability to fund long-term projects such as information technology upgrades. Establishing a component of all fees that could be placed in reserve and used for known, approved future costs may be an option for solving this problem.

• Collection of special fees such as affordable housing and child care fees is not always done in a consistent and timely manner although it appears that the Department has collected the appropriate fees from all applicable projects. Most of the Controller"s analysis and recommendations regarding Special Fees are in process and should continue to be implemented.

Recommendations

Based on the above findings, it is recommended that the Planning Commission:

10.1 Develop and adopt a policy that clearly delineates the overall approach to establishing and regularly adjusting the schedule of fees for planning services while specifying an approach based on total actual costs and the appropriate application of project valuation;

10.2 Direct staff to develop a method, consistent with the above policy, for establishing all fees and to propose fee adjustments that are based on actual historic staff costs for each type of development project application and all allowable and appropriate indirect costs that are directly attributable to processing applications including administrative and support costs, a portion of long range planning, and all allowable countywide indirect costs; and,

10.3 Adopt the new fee schedule when staff has completed its analysis.

Also based on the above findings, it is recommended that the Director of the Planning Department:

10.4 Immediately design and implement a method for insuring accurate capture of staff time expended on planning services within the Department"s different organizational units;

10.5 Accelerate implementation of the Controller"s recommendations pertaining to Special Fees. However, carefully review the Treasurer"s current proposal for centralized collection of all fees to ensure that the Department cooperates with the appropriate departments in implementing the process determined to be in the City"s best interest;

10.6 Determine if there are projects not included in the Controller"s sample of 32 projects that are subject to special fees and any amounts paid and due, e.g., projects smaller than 25,000 square feet in size as well as all hotel and residential development;

10.7 Enter details of all approved special fees in the Parcel Information Database at the time of project approval;

10.8 Prepare an annual Special Fees Information Report and submit it to the Planning Commission, including a comparison with the total square footage of all approved project types in the same period;

10.9 Ensure that the Parcel Information Database includes appropriate fields for fees that correspond to the fee-related fields in DBI"s Permit Tracking System;

10.10 Develop and install a quality assurance/quality control procedure to ensure that all fee related computer data entries are timely and accurately made, and with the appropriate and clearly auditable managerial approval;

10.11 Obtain input from the Controller and City Attorney and report back to the Planning Commission regarding the feasibility of placing a portion of fee revenues in a reserve fund for pre-approved, future costs such as technology system upgrades.

Costs and Benefits

Implementation costs for the above recommendations would consist primarily of staff time. The benefits would include a more rationalized approach to Department fees and greater compliance with State law in this area. It is not possible to determine if fee revenue would increase or decrease until the Department develops a method for accounting for all of its direct and indirect costs associated with development project application processing. Other benefits would include improved accountability and reporting of the collection of special fees such as the affordable housing and child care fees.

11. Current and Planned Information Technology

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• The Department"s information technology function can be characterized in the following manner: (a) inadequate use of the Internet for a broad range of planning applications, (b) insufficient coordination and interface with the Department of Building Inspection"s Permit Tracking System, (c) need for completion and documentation of the Parcel Information Database and other systems, and, (d) lack of sufficient management controls over input for certain key applications.

• The function of information dissemination to the public and other users of Departmental services is not a high priority of the Department, staff services are not accurately tracked and special fees are not adequately monitored and are not always collected on a timely basis. Users of the Department"s information systems do not have written guides or instructions, the system is not protected from internal misuse or abuse, and the possibility exists of crucial information systems development activity being curtailed.

Recommendations

Based on the above findings, it is recommended that the Director of the Planning Department:

11.1 Continue with strong commitment to the information technology function and ensure an appropriate level of dedicated financial support based on an updated Five-Year Plan that:

11.2 Develop a timetable to accelerate the completion of all system documentation;

11.3 Prepare simplified user guides for staff and users of the Public PC;

11.4 Work with the Department of Building Inspection to ensure that compatibility of software versions and all issues of security are resolved so that interface with the Permit Tracking System is implemented before the end of this fiscal year;

11.5 Develop and install appropriate management and quality controls of Department applications to minimize erroneous content as well as system misuse and abuse;

11.6 Implement a schedule of training classes necessary to ensure the appropriate information technology proficiency for all levels of staff, including planners, support staff and IT staff; and,

11.7 Implement an annual staff customer satisfaction survey for the Information Services function and incorporate the results in the annual performance evaluation of the I. S. Manager.

Costs and Benefits

The resources necessary to implement the above short-term recommendations are believed to be contained within the Information Services Section budget. Future costs such as greater internet access will likely incur additional one-time costs. Prioritizing tasks and staff assignments will necessarily result in changes from the current course of action. Correspondingly, benefits are fully expected to include increased productivity and efficiency of staff, expanded public access, and greater overall customer satisfaction with the delivery of planning services.

12. Training

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• While the Department maintains a strong internal technical training program pertaining to current planning and several employees believe that training overall is well done, many others are unaware of any training activity or of benefits available through labor negotiations. Still others see training as accessible only to "favored" employees and as funded by the non-profit support group for the Planning Department, "Friends of Planning." The overwhelming single staff complaint was the lack of professional development opportunities as compared to the technical training in daily operations. It is important for the Department to support professional development activities because it demonstrates awareness of staff appreciation, can be used as a performance incentive, and funding outside the Department"s budget is available.

• This is an issue that adversely affects morale because the perception of a sizeable number of employees is of an inequitable distribution of a benefit that should be equally available to all. Many employees in this Department hold advanced degrees and want to further broaden their skill/knowledge base. Also, some view the funding of certain activities by the Friends of Planning as a situation in which staff generally should not participate because of a perceived conflict of interest. Use of such funding requires appropriate policies and procedures to eliminate any possible conflict and to ensure equitable and reasonable distribution of benefits across the entire Department.

Recommendations

Based on the above findings, it is recommended that the Director of the Planning Department:

12.1 Ensure that all classifications of employees are regularly made aware of the resources available and procedures required to access them for participation in the full range of training and development activities related to the various functional specializations of the Department;

12.2 Update the Department"s policies and procedures as necessary to reflect and facilitate access to training and development resources;

12.3 Establish a policy clearly stipulating that all donations from the Friends of Planning must be of a nature and for products or services that benefit the Department as a whole and not just individuals;

12.4 Create the corresponding procedures to implement the policy in 12.3, above;

12.5 The Department should periodically review problem areas in the provision of technical services to determine where administrative or procedural modifications seem warranted as well as cost effective and possibly more appropriate than training solutions;

12.6 Examine ways in which effective functional integration and cross training can be achieved among the Department"s major Divisions and implement a pilot program to accomplish this;

12.7 In the light of work process changes resulting from emerging technologies, evaluate the overall support staff function and determine how, if necessary, it might be restructured to ensure optimum utilization and effectiveness in the different Divisions; and,

12.8 Monitor the Department"s training and staff development activities and report on them to the Planning Commission annually.

Costs and Benefits

The costs to implement the above recommendations are seen as negligible as no capital expenditure is necessary and the one-time administrative costs associated with the recommendations would be absorbed by the existing staff.

Benefits of the above recommendations would include updated policy and procedures, and improved communications and morale as well as an even better trained work force. Additionally, management can be seen as responsive to a specific concern voiced by rank-and-file employees.

13. Planning Code Enforcement

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• The Planning Department has reconstituted and reorganized its code enforcement unit by allocating six positions to that function. In addition to a team leader and one clerical staff person, one planner is assigned to each of the four geographically-based quadrants within the Neighborhood Planning Division of the Department. Although this staffing level is significantly more than that dedicated for the decade of the 1990s, it is not sufficient to effectively manage the current backlog of Planning Code enforcement caseloads.

• As of March 5, 2002, the Code Enforcement unit had 732 active complaint cases, including 171 illegal signs, 147 illegal commercial uses, 121 building enlargements without a permit, 80 illegal units, 56 violations of approval conditions and others. However, only seven of 31 complaints newly recorded in February of 2002, were being investigated. Further, of 41 primarily recent Notice of Violation (NOV) reports referred from the Department of Building Inspection (DBI) to the Planning Department, none were in the possession of the Code Enforcement Unit. Thirteen of the 41 NOV cases were included in the Enforcement Unit"s Complaint Tracking System, having been brought to the Enforcement Unit"s attention through other means.

• According to the current Code Enforcement Manager, the Planning Department did very little Code Enforcement between 1988, the time of the previous Planning Department audit report, and 2000, and in fact, placed approximately 3,550 Planning Code complaint cases in an inactive status in 2001. The types of complaints included in the inactive status include all categories. The Code Enforcement Unit maintains lists of the inactive cases on notebook paper including the type complaint and other information, keyed to the address, but no electronic listing of the complaints, although the complaints were originally contained in an electronic database. Thus, planners in the Neighborhood Planning Division do not have ready access to the complete complaint history on applications being processed. Working with Code Enforcement planners, the Budget Analyst selected a sample of "inactive" complaint cases in order to determine the actual status of the case. Of 18 site visits to inactive case addresses, we were able to determine that at least nine Planning Code violations, primarily illegal dwelling units, still exist.

• The Planning Department has not obtained any Planning Code Enforcement fees since at least 1998, although fee recovery mechanisms exist for that purpose.

Recommendations

Based on the above findings, we recommend that the Director of Planning:

13.1 Emphasize the Planning Code enforcement responsibilities of the Neighborhood Planning Quadrant planners in order to assist the Code Enforcement Unit in bringing Planning Code enforcement under control;

13.2 Ensure that the Code Enforcement Unit properly processes all Notices of Violations referred by DBI;

13.3 Ensure that existing means of cost recovery for code enforcement activities are pursued vigorously;

13.4 Investigate the feasibility of obtaining new legislation to expand the types of Planning Code violations subject to the violation penalty fees, similar to those now charged for advertising sign Planning Code violations;

13.5 As new revenues are generated from the code enforcement fees recommended, temporary staff positions should be added to clear backlog cases to the extent their costs are covered by new fee revenue;

13.6 Conduct a review of the benefits and costs of requiring Notices of Special Restrictions on building code permits that have the potential for abuse, as was done in the recent past.

Costs and Benefits

The costs of implementing the above recommendations would primarily be staff time. The cost of salaries, mandatory fringe benefits, and vehicles to provide the Enforcement Unit of the Planning Department with four temporary additional Planners and two additional vehicles would be approximately $398,608. To avoid net new costs, these positions should be added only when revenues from the recommended code enforcement related fees are sufficient to cover these costs. Bringing Planning Code enforcement under control would be a major benefit to the City.

The Planning Department"s submission of a complete written response to the Budget Analyst"s management audit report was untimely

When this management audit was authorized by the Board of Supervisors, the Board set a final report deadline of April 15, 2002. This deadline was communicated to the Director of Planning at the audit entrance conference on October 9, 2001.

To meet the audit deadline established by the Board of Supervisors, the Budget Analyst completed the audit field work and the draft report on March 28, 2002, when it was delivered to the Director of Planning. It was understood by both the Budget Analyst and the Director of Planning that the Director of Planning would provide a complete written response to the Budget Analyst"s management audit report in order that the report could be transmitted to the Board of Supervisors by no later than April 15, 2002.

Since the Planning Department received our draft report on March 28, 2002, the Department has stated, on four separate occasions, that it would provide a complete written response to our report by certain dates. In each instance, the Department failed to submit such a written response, citing, among other reasons, "computer problems." Finally, on May 23, 2002, the Director of Planning provided his complete written response to the Budget Analyst"s management audit report. This untimeliness in submitting a complete written response to our report is yet another example of the management deficiencies found in this management audit, in that the Planning Department repeatedly failed to meet its project deadlines.

Budget Analyst"s comments on the written response of the Director of Planning

The Director of Planning"s written response to our draft report is attached to this report beginning on page 179. Although the Planning Department response states that the Budget Analyst"s draft report contains various "inaccuracies", the response states "we feel that the Budget Analyst"s report contains much useful information and constructive recommendations which will be helpful in improving both the Planning Department and the Planning Commission"s performances." In fact the Director of Planning has concurred with 59 or 83 percent of the Budget Analyst"s 71 recommendations made to the Director of Planning. The Budget Analyst"s response to the written response of the Director of Planning to our draft report is attached to this report starting on page 207. As a result of the written response from the Director of Planning, one of the 87 recommendations from the Budget Analyst"s draft report has been withdrawn from our final report.

In his written response, the Director of Planning states "The Audit Report concludes from statistics that the Department is not complying with State law governing processing time. The numbers don"t lie in terms of processing time. The report, however, does not recognize that the reality of the development process in San Francisco is the inclusion of community input, neighborhood meetings, and project alterations. This dialogue and community-based approach add time. This reality is not discussed and is not accounted for in the State law."

Based on this statement from the Director of Planning, it appears that the Director of Planning believes that he is fully justified in not meeting State deadlines and thereby not complying with State law. The Budget Analyst disagrees.

Respectfully submitted,

Harvey M. Rose
Budget Analyst

cc: Supervisor Hall Hector Chinchilla, President, Planning Commission
President Ammiano William W. Fay, Vice President, Planning Commission
Supervisor Daly Roslyn Baltimore, Planning Commissioner
Supervisor Gonzalez Cynthia Joe, Planning Commissioner
Supervisor Leno Myrna Lim , Planning Commissioner
Supervisor Maxwell Jim Salinas, Sr., Planning Commissioner
Supervisor Newsom Anita Theoharis , Planning Commissioner
Supervisor Peskin Gerald Green, Director of Planning
Supervisor Sandoval
Supervisor Yee
Mayor Brown
Clerk of the Board
Controller
Ben Rosenfield
Ted Lakey

¹ Finance is most appropriate for this placement because (a) the documentation on planners should not be in the custody of planners, (b) the data are integral to the fee recovery process, and (c) this location provides more direct access for management review.