Introduction
On May 3, 2005, the Board of Supervisors adopted a motion directing the Budget Analyst to perform a management audit of the Department of Public Works (Motion No. M05-67).
Purpose and Scope
The purpose of this management audit is to (i) evaluate the economy, efficiency and effectiveness of the Department of Public Works' programs, activities, and functions and the Department of Public Works' compliance with applicable State and Federal laws, local ordinances, and City policies and procedures; and (ii) assess the appropriateness of established goals and objectives, strategies, and plans to accomplish such goals and objectives, the degree to which such goals and objectives are being accomplished, and the appropriateness of controls established to provide reasonable assurance that such goals and objectives will be accomplished.
Audit Methodology
The management audit was conducted in accordance with Governmental Auditing Standards, 2003 Revision, issued by the Comptroller General of the United States, U.S. Government Accountability Office. The management audit staff presented a draft report to the Director of Public Works on November 7, 2006. The management audit staff held an exit conference with the Director of Public Works and key members of the Department of Public Works' management staff on November 21, 2006, to discuss the draft report. After careful consideration of the additional information provided after submission of the draft report and at the exit conference, the management audit staff prepared a final report. The Department of Public Works has provided a written response to the Budget Analyst's management audit report, which is appended to this report.
Overview of the Department of Public Works
Organizational Structure
The Department of Public Works has primary responsibility for maintaining the City and County of San Francisco's streets, including keeping streets clean and maintaining streets, sidewalks, street structures and landscapes in good repair. The Department of Public Works is also responsible for maintenance of the City's General Fund buildings and capital improvements to the City's General Fund facilities and infrastructure. The Department of Public Works' organization and budget reflect these responsibilities.
The Department of Public Works consists of eight bureaus in two divisions and general administration. The Department of Public Works' Engineering Division is made up of four bureaus:
The Bureaus of Architecture, Engineering, and Construction Management are responsible for many of the City's capital projects.
The Bureau of Street Use and Mapping is responsible for most of the Department's permitting and inspection functions and for the City and County's maps. The County Surveyor is part of the Bureau of Street Use and Mapping.
The Department of Public Works' Operating Division is made up of four bureaus:
The Bureau of Building Repair is responsible for maintenance and repair of many City buildings and infrastructure.
The Bureau of Street and Sewer Repair maintains and repairs City streets and, on behalf of the Public Utilities Commission, City sewers.
The Bureau of Street Environmental Services cleans City streets and removes graffiti.
The Bureau of Urban Forestry plants and maintains the City's street trees.
The Department's general administration functions reside within the Office of Financial Management and Administration. In FY 2005-2006, the Department of Public Works became part of the newly formed General Services Agency. The consolidation of the Department within the larger agency had minimal budget impact. The Department's general administration functions were largely unchanged, except for the transfer of the human resources manager from the Department to the General Services Agency. The other human resources positions remained within the Department. In FY 2006-2007, the Department began the transfer of some call center functions and positions from the Department's 28-CLEAN call center to the General Service Agency's 311 call center.
Exhibit 1
Department of Public Works' Organization
Funding
The Department's Sources of Funds
The Department of Public Works' annual operating budget has several funding sources, as shown in Table 1. In FY 2006-2007, the direct General Fund subsidy was $31.2 million, which included $20.6 million for services funded by the General Fund, plus $10.6 million to augment services funded by the Gas Tax or Road Fund.
Table 1
The Department of Public Works' Sources of Funds in the FY 2006-2007 Budget
General Fund | Gas Tax and Road Fund | Various Funds | Total Funds | |
Permit and Fee Revenues | $4,710,200 | $4,710,200 | ||
Expenditure Recoveries | 62,220,228 | 33,000 | 286,000 | 62,539,228 |
State Vehicle Fuel Tax and Other State Monies | 24,554,237 | 24,554,237 | ||
Other Various Sources | 7,287,446 | 955,000 | 550,000 | 8,792,446 |
Federal Grants | 7,800,000 | 7,800,000 | ||
Prior Year Reserve | 1,495,512 | 1,495,512 | ||
General Fund Subsidy | 20,600,323 | 10,601,948 | 31,202,271 | |
Total Sources of Funds | $96,313,709 | $36,144,185 | $8,636,000 | $141,093,894 |
Source: FY 2006-2007 Annual Appropriation Ordinance
General Fund sources include fee and permit revenues and a direct transfer from the General Fund to pay for services, such as street inspections, graffiti removal, and cleaning of public plazas.
State vehicle fuel tax monies, allocated in the budget as Gas Tax or Road Fund, pay for street maintenance and repair.
Other City departments and public agencies, including the San Francisco County Transportation Authority, pay for service through work orders or transfers.
The Department receives various funds from State and Federal grants and other sources, which pay for capital projects.
The Department's Uses of Funds
The Department of Public Works' annual operating expenditures are divided among three main funding sources: General Fund, Gas Tax or Road Fund, and interdepartmental work orders and recoveries. The five bureaus that make up the annual operating budget are the four bureaus of the Operating Division – the Bureaus of Street and Sewer Repair, Street Environmental Services, Building Repair, and Urban Forestry – and the Bureau of Street Use and Mapping.
The Department of Public Works' annual capital budget appropriation is funded by the General Fund and various other funds. The three capital bureaus of the Engineering Division are the Bureaus of Architecture, Engineering, and Construction Management.
Table 2
The Department of Public Works' Uses of Funds in the FY 2006-2007 Budget
General Fund | Gas Tax and Road Fund | Inter-departmental Word Order Fund | Overhead | Federal Funds | Total | |
Operating Budget | ||||||
General Administration | $0 | $0 | $0 | $14,422,925 | $0 | $14,422,925 |
Building Repair and Maintenance | 6,301,084 | 0 | 26,398,344 | 5,689,361 | 0 | 38,388,789 |
Street Environmental Services | 16,649,887 | 19,874,478 | 2,016,536 | 6,136,406 | 0 | 44,677,307 |
Street Use and Mapping | 4,510,926 | 0 | 7,965,695 | 2,084,839 | 0 | 14,561,460 |
Street and Sewer Repair | 3,454,063 | 4,408,430 | 10,719,939 | 3,549,855 | 0 | 22,132,287 |
Urban Forestry | 0 | 6,644,523 | 5,868,943 | 1,802,196 | 0 | 14,315,662 |
Subtotal, Operating Budget | 30,915,960 | 30,927,431 | 52,969,457 | 33,685,582 | 0 | 148,498,430 |
Capital Planning and Projects | ||||||
General Administration | 0 | 0 | 0 | 8,017,969 | 0 | 8,017,969 |
Capital Projects | 10,958,903 | 5,216,754 | 0 | 0 | 8,086,000 | 24,261,657 |
Architecture, Engineering, and Construction Management Projects | 0 | 0 | 1,469,389 | 16,682,356 | 0 | 18,151,745 |
Subtotal, Capital | 10,958,903 | 5,216,754 | 1,469,389 | 24,700,325 | 8,086,000 | 50,431,371 |
Departmental Transfer Adjustment | 0 | 0 | 0 | (57,835,907) | 0 | (57,835,907) |
Total Uses of Funds | $41,874,863 | $36,144,185 | $54,438,846 | $550,000 | $8,086,000 | $141,093,894 |
Source: FY 2006-2007 Annual Appropriation Ordinance
Funding Street Projects
The City and County of San Francisco pays for street maintenance, construction, repair and replacement projects with a combination of State, Federal and local monies. State monies come from the vehicle fuel excise tax. Local monies come from the ½ cent sales tax revenues, administered by the San Francisco County Transportation Authority, and from the General Fund.
State law allocates the vehicle fuel excise tax - or gas tax - to construction or resurfacing, maintenance and operation of public streets and highways, public mass transit projects, and payment of principal and interest of voter-approved bonds issued for these purposes.
The San Francisco County Transportation Authority provides funds to the Department of Public Works to pay for sidewalk, curb ramp, tree planting, and street resurfacing projects.
The General Fund augments State and San Francisco County Transportation Authority funds to pay for street maintenance, operations, and construction or resurfacing projects, as well as sidewalk, curb ramp, and tree planting projects.
The Department of Public Works' Spending for Streets
The City's total FY 2004-2005 State, Federal, San Francisco County Transportation Authority and General Fund funding for street and public right of way maintenance and operations, and construction projects was $121.6 million. While the Department of Public Works received $96.1 million of these monies, the Municipal Transportation Authority also received a portion.
Table 3
The Department of Public Work's Total Annual Funding for Streets
FY 2000-2001 through FY 2004-2005
FY 2000-2001 | FY 2001-2002 | FY 2002-2003 | FY 2003-2004 | FY 2004-2005 | Average Annual Growth Rate | |
Bureau and Street Operations | ||||||
General Fund | ||||||
Street Use and Mapping | $3,224,873 | $3,651,974 | $4,349,170 | $4,115,851 | $3,809,342 | 4% |
Street Environmental Services | 13,707,532 | 17,002,164 | 16,304,706 | 17,170,730 | 19,437,798 | 9% |
Other General Fund | 683,614 | 459,899 | 335,003 | 494,473 | 344,824 | (16%) |
Subtotal General Fund | 17,616,019 | 21,114,037 | 20,988,879 | 21,781,054 | 23,591,964 | 8% |
State Funds | ||||||
Sewer and Street Repair | 5,810,106 | 6,405,412 | 6,563,948 | 5,903,118 | 4,441,007 | (6%) |
Urban Forestry | 0 | 0 | 4,623,511 | 4,964,356 | 4,716,815 | n/a |
Street Environmental Services | 14,959,855 | 15,263,513 | 11,429,777 | 11,573,954 | 11,830,517 | (6%) |
Subtotal State Vehicle Fuel Tax | 20,769,961 | 21,668,925 | 22,617,236 | 22,441,428 | 20,988,339 | 0% |
Total Operations | 38,385,980 | 42,782,962 | 43,606,115 | 44,222,482 | 44,580,303 | 4% |
Capital Projects | ||||||
Sales Tax and Local Funds | ||||||
Curb Ramp, Pedestrian and Bicycle, Tree Planting, and Street Improvement Projects | 24,061,551 | 16,490,147 | 17,737,584 | 11,231,299 | 19,800,242 | (5%) |
Federal, State, and Other Funds | ||||||
Curb Ramp, Pedestrian and Bicycle, Tree Planting, and Street Improvement Projects | 8,125,100 | 21,248,560 | 5,891,980 | 23,812,572 | 31,682,441 | 41% |
Total Capital Projects | 32,186,651 | 37,738,707 | 23,629,564 | 35,043,871 | 51,482,683 | 12.5% |
Total Funding | $70,572,631 | $80,521,669 | $67,235,679 | $79,266,353 | $96,062,985 | 8% |
Source: San Francisco Controller's Office
Future Funding for Street Projects
The City's ten-year capital plan identifies a significant backlog in street resurfacing, sidewalk repair, curb ramp, and street structure projects of approximately $700 million. The capital plan proposes funding for City street resurfacing, sidewalk repair, curb ramp, and street structure projects of approximately $378 million over ten years. The capital plan does not address the backlog in street and related projects nor fund all projects to the level required to maintain the City's streets, sidewalks and other right of way structures in current condition.
The ten-year capital plan calls for $30 million to $40 million in annual State, Federal, and local monies to pay for street and related projects. Of this amount, the General Fund will have to contribute from $16 million to $22 million annually to meet the goals of the capital plan.
In 2002 the Pedestrian Safety and Street Resurfacing Working Group made four recommendations to address the backlog in street projects and funding shortfall. Of these four recommendations:
The City submitted a General Obligation Bond to the voters to pay for street resurfacing and related projects in November 2005 that failed to win approval of two-thirds of the voters.
The Department of Public Works submitted many proposed fee increases, including increased excavation fees, to the Board of Supervisors for approval between 2003 and 2005.
The Treasurer Tax Collector has begun an initiative to enforce and collect existing parking fees and taxes.
The Board of Supervisors appropriated $15 million in additional General Fund monies in the spring of FY 2005-2006 to fund street resurfacing and related projects.
Chinatown Alleyways
The Board of Supervisors approved $2.9 million of State Gas Tax and Road Fund monies in 1994 to pay for street improvements to Chinatown Alleyways, of which $2.3 million was reserved. The Chinatown Alleyways street improvement process had been initiated by the non-profit Chinatown Community Development Center, including development of a master plan between 1995 and 1998 that identified the alleys to be improved.
The Department of Public Works managed the planning, design, and construction of the Chinatown Alleyways projects. Construction of the Alleyways projects was divided into five phases. The Budget and Finance Committee has approved release of reserved funds for the Chinatown Alleyways projects as follows:
$622,661 to construct the phase one Cordelia, Ross, and Commercial Alleys street improvements in 1999.
$529,339 to construct the phase three street improvements to the Waverly Place Alley began in 2005.
$215,000 for the planning and design of phase four Jack Kerouac Alley street improvements and phase five Beckett, Wentworth, Stark, and Bedford Alleys street improvements in 2005.
$334,172 to construct the phase four Jack Kerouac Alley street improvements in 2006.
Phase two to construct street improvements to John and Spofford Alleys in 2004 was funded from the Department's capital improvement funds rather than the original $2.9 million Gas Tax and Road Fund appropriation.
$598,828 of the original $2.9 million appropriation remains on reserve. The Department intends to use these remaining reserved funds to pay for construction of Beckett, Wentworth, Stark, and Bedford Alleys street improvements.
According to the Chinatown Alleyways project manager, the Department of Public Works underestimated the complexity of the Chinatown Alleyways projects in the initial planning and design phases, resulting in delays and cost overruns. The project manager states that several factors – including extensive community participation in the planning process, delays in Pacific Gas and Electricity undergrounding of utilities, and street congestion in Chinatown, contributed to project delays. Cost overruns were caused by underestimation of the planning, design and project management costs for the project. Because the Department of Public Works underestimated the impact of these factors and the Chinatown Alleyways' project costs and schedules, the Department has had to scale back the total number of alleys included in the project. The original plan identified 31 Chinatown alleys of which ten were considered high need. As noted above, the initial $2.9 million appropriation is expected to pay for street improvements to nine alleys in phases one, three, four and five.
The original Chinatown Alleyways master plan called for special improvements to the first group of high needs alleys, including streetscapes, street furniture, decorative concrete and other improvements. According to the Department of Public Works, future street improvements to the Chinatown alleys will be part of the Department's overall planning and prioritizing of street resurfacing projects because the remaining alleys do not require extensive improvements.
The Neighborhood Beautification Fund
The Neighborhood Beautification Fund, which was established to provide funding for the promotion of neighborhood beautification projects in San Francisco, including reducing graffiti, is included in the Department of Public Works budget but managed by the City Administrator. City businesses may designate up to one percent of their existing annual Payroll Tax liability for deposit into the Fund. Annual funding is approximately $550,000, which is awarded in the form of grants to local businesses, non-profits, and community groups for neighborhood beautification projects.
In August 2003 the Controller's Office conducted a three-year analysis of the Neighborhood Beautification Fund revenues and expenditures, and found that the actual revenues were significantly less than the budgeted revenues and the expenditures exceeded the available revenues. In response to this, the Controller's Office advised the Neighborhood Beautification staff to reduce the programs' grant awards to be commensurate with the available revenues. Staff from the Mayor's Office, the Neighborhood Beautification Program, the Treasurer and Tax Collector's Office and the Controller's Office evaluated and addressed the Fund imbalance. Budget responsibility for the Fund was transferred to the Department of Public Works from the Mayor's Office in FY 2004-2005.
According to the City Administrator's Office, under current procedures grants are only awarded once the Controller certifies available revenues. Additionally, the City Administrator's Office retains a reserve of approximately $20,000 each cycle (there are two cycles per year) or a total of $40,000 which is carried forward to the next year.
The City Administrator implemented a scoring system in February 2006, assigning points based on community benefit, participation, project feasibility, and matching funds. According to the City Administrator's Office, this scoring system is intended to make the grant process more transparent and increase the perceived fairness. Information on the point system is provided in the grant guidelines to allow grant applicants to develop their application around the point system criteria.
The City Administrator has selected a seven member advisory committee consisting of neighborhood and business representatives. According to the City Administrator's Office, the advisory committee members score applicants and approve the grant proposals. Additionally, the Advisory Committee members who score applicants now document the applicant scores on a "Score Sheet" which is kept on file with the City Administrator. This enables the City Administrator to provide grant applicants who were denied grants with feedback on the reasons for the denial.
Department of Public Works' Accomplishments
The management audit team invited the Department of Public Works to submit written statements on what the Department of Public Works identifies as accomplishments in recent years.
The Department of Public Works' Operations Division has implemented several programs to promote cleanliness in the public right of way and to increase the number of street trees.
The Department established its 28-CLEAN customer service line in 2001. 28-CLEAN provides the public with an easy to remember telephone number to report trash accumulation, illegal dumping and graffiti. The results: increased and faster customer service. In a typical month, 28-CLEAN processes nearly 8,000 calls from the public. 28-CLEAN also receives a number of non-Department-related calls for service and the department regularly forwards these service requests to appropriate agencies. The department is working closely with the new 311 Customer Service Center to transition 28-CLEAN calls to 311.
The Department established the Community Clean Team in 2001, which has been a highly successful neighborhood beautification volunteer program. Since the program began, the department has recruited more than 20,000 volunteers and has picked up nearly 200 tons of debris. In addition, volunteers and city crews sweep and clean more sidewalks, curbs and alleyways; and manually clean nearly hundreds of tree basins. In 2004 and 2005, 370 tons of debris were collected at the events, with 50 percent being diverted from the landfill and recycled or composted.
The Department has hosted three Clean and Green City Summits, the last one on February 15, 2006. The Summits team up a coalition of city residents, community leaders, and merchants with city government leaders and frontline staff with the goal of engaging the community and raising the level of service provided by frontline staff. Over 300 representatives from more than 200 public, private and non-profit organizations attended this year's event. Recommendations developed by participants have been shared with all relevant city departments to start creating change and raising standards.
The Department began a 7501 Environmental Service Worker Apprenticeship Training Program to provide opportunities for people with minimal work skills to join the Department's workforce and acquire the skills needed to become general laborers and gardeners in an apprenticeship-training program. The program supports the community by providing full time jobs and skills training with long-term career opportunities, building a local skilled workforce for future construction projects in San Francisco and the state, and continuing to grow a stronger Department workforce to provide services to San Francisco.
The Department created the Bureau of Urban Forestry in 2002 to specifically address the city's needs for coordinated maintenance of street trees and landscaped medians. The Department shifted the city's management of medians and trees from a reactive mode to a coordinated, programmatic maintenance and improvement program. This represents a historical shift in the maintenance of green spaces and trees for San Francisco. Through the Department's coordination, tracking and management, San Francisco exceeded Mayor Newsom's goal of planting 5,000 street trees annually in both 2004 and 2005. The Department has increased its number of watering trucks to maintain the new trees and is planting larger 24-gallon trees, which require less startup maintenance, compared to the smaller 15-gallon trees. By March 2007, the Department will have planted more than 15,000 additional trees since 2004 when the Mayor pledged additional street trees.
One of the Department of Public Works' primary responsibilities is to provide project management, engineering, architectural, and construction management services on some of the City's largest capital projects.
The Department is providing project management, construction management, and overseeing the design of the Laguna Honda Hospital replacement project. Three new buildings and the renovation of an existing building are scheduled to be completed by 2007, and another new building will be finished by 2009.
The Department designed and constructed the new Octavia Boulevard as part of the overall Central Freeway Replacement Project. Completed and opened in 2005, Octavia Boulevard is a six-lane roadway flanked by trees, flowers, other landscaping elements, decorative streetlights, benches and public artwork. The Octavia Boulevard project has revitalized a once crime-ridden part of Hayes Valley and has joined together the neighborhood. The Department's Octavia Boulevard Project has been the recipient of several awards, including Freeway Project of the Year by the California Transportation Foundation and the 2006 Excellence in Transportation Award by the California Department of Transportation. The project also received SF Beautiful's 2006 Beautification Award, Rebuilding our Civic Spaces and Neighborhood Places and the U.S. Department of Transportation's 2006 Excellence in Highway Design.
The Department provided project and construction management on San Francisco's new Juvenile Hall, which was completed in July 2007. The 90,000 square foot building replaces an outdated facility that was constructed in 1950. The new building provides 110 sleeping rooms, with a capacity of up to 150 beds; and program space with educational, recreational, health care, religious, food service, and visitation areas.
The Department's Harding Park Municipal Golf Course has received the Award of 2006 Distinguished Projects of the Year from American Public Works Association, Northern California Chapter. An extensive improvement process was undertaken to restore the famed 163-acre course layout to world-Class standards. The project was completed on time and was upheld to the standards of the Professional Golf Association (PGA) in order to host the American Express Golf Championship in October 2005.
The Department of Public Works' Bureau of Street Use and Mapping is responsible for subdivision mapping and permit processing.
The Department was the lead facilitator in processing the mapping and permit applications for the Mission Bay Development Project. The Mission Bay Project encompasses over 300 acres of San Francisco's bay front. The project includes realigning streets, and redrawing blocks and lot boundaries; only the alignments of 16th and 3rd streets will remain unchanged.
The Department continues to enforce the City's News Rack Ordinance, which aims to reduce the amount of sidewalk clutter associated with freestanding news racks, by requiring Fixed Pedestal News Racks in many parts of the City, instead of the individual free standing racks. The Department has established several hundred fixed pedestal news rack sites and has contracted to fabricate fixed pedestal news racks that are being installed in the downtown, Union Square and Fisherman's Wharf area. The Department also continues its practice of citing and seizing news racks that are not in compliance with maintenance and display standards.
Acknowledgements
We would like to thank the management and staff of the Department of Public Works for their cooperation during this management audit. We hope the findings contained in this report provide useful tools for the Director of Public Works and his staff as they work to improve the operations of the Department of Public Works.