A Civil Grand Jury report with respect to the management of the City of San Francisco’s $25 billion City construction program has concluded that “it needs [much] work” and a tech overhaul.

The three questions which the Grand Jury aimed to answer, “problems that have been called out in numerous City audit reports over the last few years but remain unaddressed”:

  1. How can San Francisco manage a construction portfolio of over $25 billion with inconsistent controls, insufficient systems, and an inability to consolidate citywide financial and management information?
  2. Why does San Francisco continue to operate a contracting environment that is out of step with best practices?
  3. Should the City be spending so much on construction without the oversight of the Board of Supervisors?

Identified issues include the poor management of change orders (there were 607 for the San Francisco General Hospital project alone) and Information Technology (in a city which touts, and is being driven by, tech) which is “out of date,” “obsolete,” and “weak.”

Recommendations include requiring all City departments to adhere to a standardized change order policy and the hiring of an external consulting firm “to develop citywide system requirements for the implementation of a construction management system.”  And San Francisco’s Board of Supervisors “must take a more active role in the oversight of construction projects.”

The full report which was just released:

Comments from Plugged-In Readers

  1. Posted by jamesjr

    Not surprising.

  2. Posted by Kyle

    Does the city pay competitively with the tech industry for IT talent?

    • Posted by formidable doer of the nasty

      They don’t have to, they’re not looking for the kind of developers who work for Google, Facebook or startups. They’ll pay someone like Accenture a few hundred million for a thoroughbred racehorse and get a three-legged pony in 5 years.

  3. Posted by lemon obrien

    the city has no clue when it comes to tech.

  4. Posted by SFBayview

    Taxpayer’s money should be spent wisely. City management and supervisors should spend more time to reduce waste, inefficiency and better manage SF’s unparalleled city budget, this is over $10,000 per person.

  5. Posted by The Milkshake of Despair

    I fear the answer to all three of the above questions might be that a byzantine inconsistent accounting and management system is harder to audit and therefore a safer place to conceal graft and corruption. Please tell us it ain’t so.

    • Posted by SFRealist

      I mean, we all know that it is so, don’t we?


  6. Posted by soccermom

    Guys guys guys. I can see where this is going.

    Someone is going to point out that government is not as efficient as the private sector.

    Then someone will point out that maybe having the city buy housing sites and run construction is implicitly a stupid inefficient idea, and that city management of housing projects historically provides an abundance of evidence that the government does a lousy job.

    And they we’ll all be labeled tea partiers.

    And then someone will say that “the market” doesn’t do a good job of serving the middle class. Ad Rent Controlum Absurdum Nauseum.

    So don’t let that happen.

    • Posted by Futurist

      I don’t care what anybody labels me. why should that matter anyway?

      Fact is our SF government is poorly run, corrupt and lazy: When I see 6 city workers outside my front door laying down new crosswalk stripes and 1 is running the machine, the other 5 are just hanging around. When I see 6 meter maid scooters all parked in a row on my street, hanging out, shooting the breeze, talking on their phones, while WAITING for the sweeper truck to come by.

      That’s why.

      • Posted by MO

        Aren’t crosswalk striping, asphalt laying, etc., contracted out?

      • Posted by Brian M

        Because you are always every moment of your day nose to the gridnstone. You never chat at the water cooler or waste time on the web. Your are The Futurist, paragon of the American Work Ethic.

        • Posted by Futurist

          Oh, it’s not about that Mr. Brian. Chatting at the watercooler is fine..and valuable.

          What I’m talking about, and it seems to missed it, was the incredible INEFFICIENCY of our city government; 6 workers at once to lay down some crosswalk stripes?

          6 or more street sweeping ticket givers JUST WAITING for the damn truck to catch up? Some of them have waited for 20-25 minutes.

          Now you tell me why and how that makes sense. And how that relates to “hanging out at the watercooler”.

  7. Posted by brid

    With regards to Information Technology the City’s “Department of Technology” is a huge joke. As part of my day-job I have regular interactions with, and as an occasional contractor to, the City in an IT capacity and thus with DT.

    There is not a more incompetent and wasteful crowd of “IT professionals” employed anywhere else in the western USA. Local 21 protects even the worst; it’s impossible to get fired, so problem children are just shuffled off to other departments. SFMTA was the most recent dumping ground.

    Whenever our folks spend any time amongst SF’s “DT” they come back with “you’re never gonna believe what I saw/heard today..” stories.

  8. Posted by Government Shrinkage

    Ah money… I take this opportunity to remind people here that the San Francisco city budget for 2015 is 8.6 Billion dollars for 805,235 city resident. By contrast, Chicago 2015 budget is 7.3B for 2.719 million people. Roughly 10000/capita vs 2700/capita.

    Think about that next time you drive on our busted streets.

    Think about that next time you take Muni.

    Think about that next time you interact with the Planning Department.

    Think about that next time you have a glance at the city computer systems.

    Think about that next time you see obviously mentally ill homeless people left to walk the streets like zombies.

    Go visit Chicago, and think about which City government seems better to you.

    • Posted by Jake

      The SF and City of Chicago budgets cannot be directly compared as you are doing. SF is both a city and a county. Cook county has a budget separate from Chicago.

      In addition, about a third of SF’s budget is for what are essentially regional services that could be taken off budget. Specifically, 10% or so of the SF budget is the water supply for 2.6 million people. SF gets paid for it by the other municipalities. Most of the cost is not for SF residents and is not paid by SF residents. SFO and SF General are similarly on the SF budget but provide regional services.

      You may want to “think about” what is in the actual budget, instead of rather mindless and misleading comparisons. Not to say that SF doesn’t have a bloated budget, but nothing as dramatic as your distorted comparison would suggest.

      • Posted by Government Shrinkage

        Misleading heh?

        Cook County’s budget is about 1.5B. Cook County population is 5.241 M. That’s 286$ per capita for Cook County. Add that to the per capita total of Chicago and…

        Think about that the next time you call someone misleading. Lastly 10% is very different from ‘a third’, and your claim that SF spends 10% of its budget on regional services is a stretch, at best.

        More than 700 of our employees took home over 200K last year. I’ll let you do the research about about 1. how many city employees we have per capita, and 2. how much they are paid vs. city employees elsewhere, even once you adjust for the cost of living.

        • Posted by Jake

          Chicago’s municipal debt is the largest per capita in the entire country, coming to $26,000 for every Chicagoan. It is so bloated that Moody’s, S & P, and Fitch all dropped their ratings of Chicago debt this year, with Moody’s going all the way down to ‘junk status’. Cook County is somewhere in the same range. All together a Chicagoan’s debt from local government is something like $50k. By contrast SF’s per capita debt is 15-16k. SF would have to borrow $30 billion on top of what is currently owed to reach the fiscal austerity of Chicagoland.

          A lot easier to make the budget look small when you pile up enormous debts. When evaluating financials make sure you include the balance sheet.

          Seriously, you offer Chicago city government as a model of efficiency, propriety, and probity. Chicago is a great city in many ways, but their city government a scandal wrapped in an outrage inside a boast and has been for beyond living memories.

          FTR, SF has more than 850k residents. If you add up the ‘regional’ expenses (SFO, SF General, and water) in the budget, then yes it will be about a third of the budget, usually lands somewhere in the 30-35% range every year. And yes it is deeply misleading to take the city budget which includes the water supply for 2.6 million people and other regional services, divide it by the resident population, and present that as an indication of fiscal responsibility. Frankly, it is more daft than deft.

          • Posted by soccermom

            I am confused.

            Borrowed money (Chicago’s debt) is a balance sheet item. A budget is an income statement description. A city borrows money when it doesn’t have enough revenue (taxes + fees) to cover the budget (expenses). The amount of debt a city has does not impact the budget other than ongoing interest expense.

            So if anything, the interest payments in Chicago’s budget are actually making their budget appear larger than in would otherwise be. So you’ve just made Shrinkage’s point even stronger. We are spending way more per person than the Chicago/Cook County comparable.

            I don’t think anyone has said Chicago is a model of civic government, but they are getting by with apparently a lot less. I think that is an interesting point.

          • Posted by Jake

            the vast majority of their debt is unfunded pension obligations. You know, money they should have been collecting and that should be on their budget, but isn’t. They are so far behind that they couldn’t possibly float a bond big enough to cover it all. That’s why the much lesser bonds that they recently floated were rated junk. And their situation is getting worse with the growing number of retirees with guaranteed benefits.

            So, if anything, their budget is massively below where it needs to be, and appears smaller than it would if they weren’t headed for possible insolvency. Also, Chicago has been a leader in ‘privatization’ of municipal functions, including even the parking meters. Most of which have turned out to be bad deals for Chicagoans, but they do tend to bring in some money upfront and move these off-budget. Remember when Gov Schwarzenegger wanted to sell-off some CA office buildings to raise immediate cash to fund the current budget but would then have to rent the same buildings for ever? Sometimes less government is more expensive.

            This stuff is not a secret or hard to look up. It has been a scandal for years in Chicago and many other US cities. How many US cities have had to go through bankruptcy for similar shenanigans? How many in the Bay Area? How about Vallejo?

          • Posted by soccermom

            Okay, that makes sense. If we say that Chicago is simply not recognizing part of their budget (by not funding pensions when they should) then explains how they can arrive at such a low per capita rate.

      • Posted by Anonandon

        Jake, Chicago’s budget includes the world’s busiest airport….O’Hare. (O’Hare just went back to being on top as the world’s busiest airport). The O’hare American Airlines Terminal ALONE has more gates than SFO and OAK combined.

        • Posted by Jake

          Sure, these enormous budgets have many many elements. So what? Have you folks ever looked through one of these multi-billion dollar municipal budgets or read an expert analysis of one? There are thousands of embedded political/accounting decisions/tricks that affect what the numbers show and what they hide. Even experts take weeks to digest one, let alone try to compare across very different munis in very different states, like SF and Chicago. This is really an example of fools rush in where accountants fear to tread.

          If anyone is actually interested in the pillaging of Chicago’s public infrastructure for private gain, check out the article (namelink) by Rick Perlstein.

    • Posted by The Milkshake of Despair

      Is this the same Chicago that contains hundreds of overpasses that are decaying and crumbling?

    • Posted by moto mayhem

      Chicago’s transit is 5x better than SF, the streets are 5x cleaner, and the architecture is 500X better. and you can get a minor renovation to your home approved in 2 months vs. 2 yrs in SF.

      • Posted by anon

        I think you’re talking about only the northern half of Chicago.

  9. Posted by Anonandon

    Does the Chicago budget include their much larger subway and rail transit system? Their subway/EL system is about 10 times larger than MUNI with over 11 separate lines and over 100 stations. I have to say, Chicago does a much better job of keeping up their parks, civic monuments and landscaping, and they are doing a massive remodel project of almost every station on the Purple, Brown and Red Lines right now.

  10. Posted by AnonAnon

    I’ll just answer the third question: “Should the City be spending so much on construction without the oversight of the Board of Supervisors?” Good god yes. Please do not give any more power to the knuckleheads on the BOS. However inefficient things are they will only make it worse.

  11. Posted by SFBayview

    SF city government is bad. But the BOS is the worst!

  12. Posted by SFrentier

    The whole point is that sfgov has a fat budget relative to most cities of its size, and it is hugely inefficient and wasteful. Getting lost in the trees of comparing/not comparing it to Chicago does not negate that.

    • Posted by Jake

      You are making two entirely independent points about the SF budget: (1) has a lot of waste and (2) is fatter than similar cities. On (1), good luck finding a multi-billion dollar budget public or private without a lot of waste. And it will take accounting expertise more than luck to ever get a fair estimate of the amount of waste in those budgets.

      On (2), as the example of chicago v sf demonstrates, people that think they can compare what are always highly complex budgets of disparate major cities as simply as they compare hands in a poker game are playing with less than a full deck. Do you even know if this grand jury report supports your vague claim?

      Since this article is about the SF construction budget, is the $1.2B SF plans to spent to remake the 1950s era waste treatment plant in Bayview an example of our “fat budget” or a good use of tax money to handle ~200 tons/day of actual waste? Do you have suggestions for how it could be done for less? Is it worth another $10/month per household or not? Is it wise for big time investors to accept the lower rate of return on the bonds SF will sell to pay for this with their strong AA/AAA rating or should they buy similar municipal bonds with higher yields due to lower bond ratings from “similar” cities like Sacramento? Do you even know enough to judge the efficiency of this major budget tree/item which would directly improve the quality of life in a neighborhood where you have invested?

      If you can’t handle the complexity of a single budget tree, it might be wise to stay out of the financial forest, else be known as another of the fools that rush in where accountants fear to tread.

      • Posted by SFrentier

        You sure talk a lot of nonsense bro.

        1- my points are exactly interrelated. Not only is SF budget large on a per capita basis (even if we except your 2/3 number directly related to city), but the city is also largely inefficient, a lot of it due to it being an older city and hence legacy build ups of inefficiencies and a lot also due to spoiled-brat-liberalism of the BOS. It’s not a “well other large cities with big budgets are inefficient too…blah…blah” argument. It’s that this city is a lame prima donna. It’s lame because it can afford it, because in part it gets a sh*t ton of revenues in property taxes from people like me and significant business tax revenues.

        2- the Bayview waste treatment plan argument is a total straw man. Wow, you pointed to an important project. FFS just because the city is wasteful and inefficient doesn’t mean that they achieve 0. And comparing Sacramento to SF is a joke.

        The whole point is, if you know anything about city budgets, is that per capita SF is one of the highest. Boston and NYC are in a similar league. A bunch of spoiled liberal amateurs are running a city that can be so much more if it focused outwardly for once instead of whining about tech busses, Ellis act evictions, Calle 24 and other small minded provincial matters.

        • Posted by Jake

          You sure sling a lot of conjecture and vague opinions without facts. What does “largely inefficient” even mean in this context? You want to offer an objective measure of that or are you happy to wave your hands and act like you’ve said something of substance?

          How much would the budget be if you were running it instead of running your mouth blaming others? You want to back up your self-declared knowledge of city budgets with concrete suggestions for making this SF capital budget better or is this just another of your sorry little whiny rants? You complain about prima donnas and amateurs and yet your write this pablum.

          BTW, if your two points are “exactly interrelated”, then they are either one point in the same or one subsumes the other. In mathematics and logic it is called a degeneracy. A property you exhibit often.

          • Posted by Anonandon

            Jake, on a per capita basis, San Francisco’s budget IS very inefficient. Do you disagree with using a cost per citizen basis of comparison? ALL larger cities have airports, water treatment plants, mass transit, etc. and some are able to provide better service for a lot less cost per resident.

          • Posted by SFrentier

            1- my primary comment, that SF has one of the highest per capita budgets in the country is fact. Why do I need to look that up for you? Is this an RE blog masquerading as a scientific paper? You want to refute my statement then YOU you can be the Google chump and do the research.

            2- I like your logic here too! So I claim SF is largely inefficient, but I didn’t quantify it (see #1 above). Hence if there is no annotated proof, it is incorrect. Ok you win. SF is extremely efficient. Thanks for the practical life lesson in logic. Plus, at least I brought up city age/legacy systems/entitled liberal politicians. What did you contribute?

          • Posted by anon

            The point that Jake is making is that “per citizen” only works if you’re measuring like citizens and/or services. If you can find a city that is a city and county and also provides water distribution services for a much larger metro area, that would be a good start. In these measures NYC is a pretty good measure – it’s a combined city/counties setup and NYC does provide water distribution services to many of its suburbs.

          • Posted by Jake

            Of course SF ranks high by budget $ per resident. It’s an expensive place. I keep reading that is due to the genius of various posters on SS to wring every last penny out of the ground. But what does it mean beyond being a number with the potential to shock noobs when they first hear it casually thrown out by a disgruntled taxpayer making a loud harrumph?

            You guys want to use efficiency to evaluate it or compare it to other cities, then fine, let’s see you do it. And describing it as “hugely” or “largely” are just turning your harrumph up to 11.

            Efficiency is output divided by input. You wouldn’t say one car engine is more or less efficient than another without at least knowing their energy burn rates and horsepower. If the input in this case is the budget, then the output would be some measure of the results due to the government.

            The budget is public, and leaving all quibbling aside about what is in or out of it, it has a bottom line number. A number you emphasize. Then what results do you measure and quantify to make what you call “efficiency” meaningful and not just exaggerated harrumph, not just a pretense that you are saying something meaningful about SF instead of griping and handwaving like everyman everywhere? You think you are making a serious point, then make it.

            Until you do, harrumph all you want about the budget $ per capita, but don’t kid yourselves that your talk about efficiency or comparisons with other cities have gone beyond one “who knows the price of everything, and the value of nothing.”
            Anonandon, about 1 in 8 SF residents is not a US citizen. SF also has an average of more than 130k tourists per day. And SF’s workday population includes ~300k non-residents that commute in for work. So, you tell me what is the correct population denominator by which to divide the SF budget and allocate the services. And when you want to compare with other cities, remember that some cities like San Jose have a lower daytime population than they have residents, while others like Wash DC have an even higher ratio of daytime population to residents than SF. The real world is complicated, no?
            FTR, I haven’t said SF gov is or isn’t efficient. To my knowledge it is efficient at some things, inefficient at other things, and for most things it does I wouldn’t know enough to judge and don’t care enough to find out. I find the attempts to reduce it all down to some kind of scalar or relative measure of “efficiency” so we can glibly say it is more or less than some other place or that it is high or low compared to some abstraction, well, astonishingly simple minded.

          • Posted by SFrentier

            So we all now agree that per capita Sf has a pretty rich budget. What would make it more effective? Speaking from my corner of the world: muni is abysmal. why are we only now attempting to expand undefround? Planning and DBI are total clusterf*cks, as anyone dealing with them will attest (actually, I haven’t heard of a single person say anything positive about them, ever.) the mission re zoning plan took over 10 years, and apparently now planning is tripping over themselves to contradict their own initiative with their own ‘mission building moratorium,’ so not to look like idiots in front of Campos and his initiative.

            Overall, if this city was not blessed with such a rich budget we would be screwed. It’s not like nothing gets done, it’s that our city gov is run by amateurs. With a serious BOS we could get so much more done. Just like some 23 yo that gets $5 mil for his app, and doesn’t know the first thing about running a business. The BOS historically consists of a significant number of crazy left wingers- just review some of the inane legislation this city has passed, especially wrt housing. Our mayors, IMO, have at least been practical for a few generations and serve as a counter balance. But the bottom line is that the sfgov is like a rich spoiled child. Sure it does some things, and a few possibly well, but if we were a grown up, finally past the 60’s leftist sentiment, we could do so much more. Put it this way: if SF was San Jose in politics, we would be a powerhouse. Of course a lot of people want to keep SF as is, hence the absurd combination of rich elites and entitled others. And sfgov largely caters to that; not exactly a model for city efficiency. (Hint: the politics have a lot to do with how money is spent.)

  13. Posted by NoWay

    In NO way is NYC a good comparison to San Francisco. The delusions of grandeur regarding San Francisco never cease to amaze me.

    • Posted by anon

      Delusions of grandeur? I just mentioned that both SF and NYC have combined city and county responsibilities along with supplying water to surrounding areas. I didn’t say they were comparable beyond that. Is that grandeur?

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