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California State Auditor Report Number : 2015-132

County Pay Practices
Although the Counties We Visited Have Rules in Place to Ensure Fairness, Data Show That a Gender Wage Gap Still Exists


Responses to the Audit

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City of San Rafael

March 3, 2016

Elaine M. Howle, California State Auditor
c/o Myriam Czarniecki, Audit Team Leader
California State Auditor
621 Capitol Mall, Suite 1200
Sacramento, CA 95814

Re: Response to Draft Audit Report re Residential Building Record Program

Dear Ms. Howle:

Thank you for providing our staff with a draft of your proposed report concerning your office’s audit of the City of San Rafael’s residential building record program, and allowing us to provide you with our responses to the report’s recommendations.

The fundamental goal of the City’s residential building record program is to protect the health, safety and welfare of the City’s residents by detecting and obtaining correction of illegal and noncompliant structures. We believe your report points out the merits of the program in advancing that goal

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We also find your recommendations to be reasonable and valuable in advancing the effectiveness and transparency of the City’s processes and record‑keeping, and their implementation could only improve our program. As the report acknowledges, our staff has finite resources with which to implement the residential building record program, and this will likely be the overarching limitation on our ability to implement all of the additional processes recommended in the short term; however the report provides us with a reasonable plan for improvement of the program.

We do want to acknowledge the courtesy and professionalism demonstrated by all the members of the audit team assigned to this matter. They performed their work in a directed, neutral, and considerate manner that greatly enhanced our staff’s experience with the audit process.

Very truly yours,

JIM SCHUTZ
City Manager






Comment

CALIFORNIA STATE AUDITOR’S COMMENT ON THE RESPONSE FROM THE CITY OF SAN RAFAEL

To provide clarity and perspective, we are commenting on the response to our audit from the city of San Rafael (San Rafael). The number below corresponds to the number we placed in the margin of San Rafael’s response.

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San Rafael indicates that finite staff resources will likely limit its ability to implement all of the additional processes we recommended in the short term. However, the city does not identify the specific recommendations that would be affected by this limitation. We look forward to the city providing this detail, as well as its plans and actions to implement the recommendations in its 60‑day, six‑month, and one‑year responses.



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City of Novato

March 4, 2016

Elaine M. Howle, CPA
State Auditor
621 Capitol Mall, Suite 1200
Sacramento, CA 95814

Re: Response to Audit 2015-134

Dear Ms. Howle:

The following constitutes the formal responses from the City of Novato regarding the audit recommendations for our residential resale inspection program. We appreciate the careful examination of our program by your staff and look forward to formalizing several of our procedures for great clarity to home sellers, buyers and the real estate community.

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We do, however, have a fundamentally different view of our resale inspection program than that held by your staff, which we expressed in two conferences with the auditors. Section 4-8.1 of our Municipal Code clearly states the purpose of the resale inspection program is to provide “information about property proposed for sale or transfer in order to protect their welfare and legal interest during the sale or transfer of property.” This section goes on to state, “it is also the purpose of this section to assist the city in abating public nuisances and enforcing established building and zoning ordinances by identifying properties in need of rehabilitation or in violation of city codes.” There is nothing in this ordinance that mandates or establishes procedures for subsequent enforcement actions related to violations identified during the inspection process. We therefore take exception to recommendations of the audit that speak to mandating enforcement of all violations discovered during the resale inspections without regard to the relative severity of such code violations as they affect the health and safety of homeowners. City resources are limited, and it is critical for the City to retain the discretion to prioritize the caseload of our code enforcement officers related to these and all other citywide code enforcement service requests.

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As also stated in Section 4-8.1 of the Municipal Code, the ordinance establishes the resale inspection program, “to assist in, but not guarantee, the disclosure of information from city records about real property within the city.” The recommendation that the City must monitor all residential property transactions to assure that all properties being sold have applied for a resale inspection report and further, that the City initiate a process to assure that all buyers have been provided with such reports from the sellers, is both inconsistent with the stated purposes of the ordinance and presents practical difficulties in that the City only has access to data sources on property transfers from the County Assessor that is frequently months old, after property transactions have been concluded and the responsible seller is no longer in control of the property and in many cases no longer resides in the area. Nonetheless, we will explore other potential data sources to allow for such monitoring, and look forward to viewing the full report to see whether the other audited programs have established procedures to do so.

Specific responses to each of the report recommendations is provided in an attached table.

Again, we appreciate the opportunity to examine the quality, accuracy and efficiency of our programs, and commit to continually improving our public services.

Sincerely,

Cathy Capriola
Interim City Manager

cc: City Council, City Attorney, Community Development Director


Responses to State Audit Report 2015-134 on Resale Inspection Program

Report Recommendations City Responses  
1. Monitor All Property Sales
To ensure that it is aware of compliance with its respective ordinances, Novato should implement procedures that can help it monitor the sale or exchange of properties that require resale record inspections. The city should work with applicable stakeholders, such as realtors, to aid in this effort.
We know of no data source that can provide information regarding all property sale transactions in advance of the transaction being completed. County Assessor data is updated periodically, but is not timely enough to provide advance notification to the city to initiate contacts with property owners to submit for a resale inspection, since that information is only updated by the County Assessor AFTER the transfer transaction is complete. Since the City’s ordinance places the responsibility for a resale inspection on property sellers, finding out months after a transfer has occurred will not put the City in a position to create recourse for a non-compliant seller who has already disposed of the subject property.

The City could request that the local realtors inform the City of properties which are in contract for sale. However, response from the realtors would not be guaranteed. This is essentially what occurs now with the realtors notifying the property owners of the requirement for inspection.
2. Receipt of Purchaser’s Verification of Report Receipt.
To verify that new property owners are aware of the health and safety concerns at their properties and any corrections they need to make, Novato should develop a process to ensure that it receives homeowners’ cards.
The City knows of no way to ensure return of the homeowner’s cards. The City’s ordinance requires the seller to return the homeowner card, since it is the seller who is required to obtain the inspection and comply with the ordinance. However, once the sale transaction has completed, the City has no way to know the seller’s new address and in many instances the seller is no longer present in the jurisdiction.

The City will review the availability of alternate data sources to implement such a monitoring program with the Marin Association of Realtors.
3. Create a Complaint Process.
To ensure that it can monitor the satisfaction individuals have with the resale record program and that it has a uniform approach for resolving complaints, Novato should develop a formal process for tracking the complaints received. In addition, it should develop a formal policy that describes how staff should evaluate complaints, and it should document its activities associated with resolving complaints, such as the resolution and rationale for the resolution. The city should also establish a designated location in its database to record this information.
The City will implement these recommendations.
4. Formalize Enforcement Process for Correction of Violations.
Novato should develop formal written procedures for staff to follow up on a property owner’s correction of violations. These procedures should identify the following:
  • The method in which staff document in the database the violations identified during inspections and their actions to bring the property into compliance. In addition, the procedures should identify where within the database these documents should be kept.

  • The protocol for ensuring that repeat violations are corrected in a timely manner.
The City will prepare formal written procedures for staff follow-up on a property owner’s correction of violations. However, the City reserves the authority to prioritize enforcement follow up efforts based on the severity or potential health risks associated with identified violations and funding and staffing resources.
5. Formalize Enforcement Process for Correction of Violations & Address Backlog.
To ensure that property owners correct violations in a time manner, Novato should do the following:
  • Develop a work plan by July 2016 to identify and address its enforcement backlog by April 2017, so that the city is up to date with its enforcement actions, such as issuing notice letters and monitoring property owners’ actions to resolve violations. Novato’s work plan should also include updating the completion status of the violations so unresolved violations can be identified and monitored for subsequent correction.

  • Follow through with its enforcement policies, such as issuing notice letters.

  • Establish a written process for inspectors to monitor and ensure that property owners correct violations, including accurately identifying the properties that have not obtained necessary permits or have not had required reinspections performed.
The City will develop a work plan relating to enforcement actions resulting from the program, including the backlog of identified violations, issuance of notice letters and monitoring by the identified dates and will establish written procedures where appropriate. However, the City reserves the authority to prioritize enforcement follow up efforts based on the severity or potential health risks associated with identified violations and funding and staffing resources.
6. Establish & Track Time Goals for Report Completion.
To ensure that it conducts its resale record inspections and complete the reports in a timely manner, Novato should do the following:
  • Establish a process to monitor its ability to meet its established time goals from application date to report issuance, such as developing a reminder report or using an automated feature of its database.

  • Review its time goals by July 2016 and establish an expectation that is significantly shorter than 10 business days for the period from inspection to report issuance and that would be commensurate with the effort required to issue the report. Further, it should establish a time goal for the period of application to inspection. If applicable, Novato should update its policies and procedures to reflect the revised time goals.

  • Establish a method to identify those inspections that have inspection dates requested by property owners.
The City currently averages 5.6 days between the date of inspection and report completion, so a goal that is more commensurate with our actual performance can be established. Since our overall average time from application date to report completion is 11 days, an overall time goal from application to report completion will be established along with a process for monitoring.

The City will indicate in the inspection log whether a later inspection date than the first available date has been requested by the property owners.
7. Track Officer Training.To ensure that it can demonstrate this its resale record inspectors are qualified, the following should occur:
  • Novato should develop a process to maintain continuing education attendance records. The city should ensure that staff receive periodic continuing education through internal and external sources to enable them to be current on the building standards code requirements, especially when the requirements are updated.
The City will implement these recommendations.





Comments

CALIFORNIA STATE AUDITOR’S COMMENTS ON THE RESPONSE FROM THE CITY OF NOVATO

To provide clarity and perspective, we are commenting on the response to our audit from the city of Novato (Novato). The numbers below correspond to the numbers we have placed in the margin of Novato’s response.

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Novato indicates that its residential building record (resale record) ordinance does not require the city to engage in enforcement actions pertaining to violations identified during residential resale record inspections. This response is inconsistent with the provision in the ordinance—enacted pursuant to Novato’s constitutional police power to legislate on behalf of the health and welfare of the city’s residents—that an additional reason for the inspection program is to assist the city in abating nuisances and enforcing building and zoning ordinances. It is unclear how this ordinance can assist Novato to enforce California Building Standards Code requirements and related ordinances if the city does not have a system to enforce violations that are revealed in the course of a resale record inspection.

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We stand by our recommendations pertaining to the correction of violations identified during resale record inspections. Although Novato’s response emphasizes the need to prioritize enforcement efforts based on the severity of code violations, we noted in the Audit Results of our report that it generally gives the owner 30 days from the date of the resale record report to resolve any violations that require permits or reinspection before it issues a reminder letter or notice letter. The city’s current policy for following up on violations requiring these actions does not address any type of prioritization. We encourage the city to specify in its policy how staff should prioritize enforcement. In addition, the other two cities we audited had similar enforcement policies and ordinances related to identifying violations, but they did not raise any concerns about formalizing their enforcement processes.

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Because the stated purposes of Novato’s disclosure ordinance are to assist in the disclosure of property-related information to the parties and to assist the city in identifying properties that have code violations, it is our position that having better information regarding the occurrence of residential real property transactions and having signed homeowner cards would enhance the city’s confidence that buyers and sellers are more fully complying with the resale record ordinance and that the purposes of the ordinance are being met. To clarify, our recommendation is focused on Novato being able to monitor the property transfer transactions in order to inform it of the degree that property owners have complied with obtaining resale record reports, but it does not specify that the monitoring occur in advance of property sale transactions being completed. As we discuss in the Audit results, the city is not monitoring this information. Thus, it cannot know how well the ordinance is being followed and take steps to gain greater compliance from stakeholders in the future. Even if the information Novato uses is several months old, the information is still valuable in determining compliance. We encourage the city to explore methods to address this recommendation, and we look forward to learning of the city’s progress in its 60‑day, six‑month, and one‑year responses.



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City of Pasadena

March 3, 2016

Elaine M. Howle
State Auditor
621 Capital Mall, Suite 1200
Sacramento, CA 95814

Dear Ms. Howle,

The City of Pasadena appreciates the California State Auditor’s resources provided for evaluating the city’s residential occupancy inspection program. As mentioned in the draft report, the city’s program is one of a few dozen throughout California that provides consumer protection to home purchasers and enhances health and safety regulations. The draft report has been reviewed by various city staff. Attached are the City of Pasadena’s comments to recommendations included in Report Number 2015-134.

If you or the audit team wishes to discuss our comments or the report further, please contact David Reyes, Interim Director of Planning and Community Development, at 626/744-4650 or davidreyes@cityofpasadena.net.

Sincerely,

Steve Mermell
Interim City Manager


Attachment


The City of Pasadena respectfully submits the following responses to the recommendations within draft report 2015‑134.

RECOMMENDATION #1 - To ensure that it is aware of the degree of compliance with its respective ordinances, Pasadena should implement procedures that can help it monitor the sale or exchange of properties that require resale record inspections. Pasadena should work with stakeholders, such as realtors, to aid in this effort.

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RESPONSE - The City of Pasadena respectfully disagrees with this recommendation. The City’s current ordinance, rules and regulations, and policies provide a reasonable way for the city to monitor the sale or exchange of properties.

RECOMMENDATION #2 – To verify that new property owners are aware of the health and safety concerns at their properties and any corrections they need to make, Pasadena should develop a process to ensure that staff sign the inspection certificates and add them to the city’s database.

RESPONSE – The City of Pasadena agrees with this recommendation. The Interim Director of the Planning and Community Development Department will issue a memorandum outlining the process for staff to sign inspection certificates and add them to the city’s land management system. The City anticipates reporting completion of this item in its scheduled report due at the 60 day interval.

RECOMMENDATION #3 - To ensure that it can monitor the satisfaction individuals have with the resale record program and that it has a uniform approach for resolving complaints, Pasadena should develop a formal process for tracking the complaints received. In addition, it should develop a formal policy that describes how staff should evaluate complaints, and it should document its activities associated with resolving complaints, such as the resolution and the rationale for the resolution. The city should also establish a designated location in its database to record this information.

RESPONSE – The City of Pasadena agrees with this recommendation. A process will be developed for staff to note in the City’s land management system complaints received and their resolution. The Interim Director of the Planning and Community Development Department will issue a memorandum to inform staff of the process and direct staff to enter complaints into the city’s land management system. The City anticipates reporting completion of this item in its scheduled report due at the 60 day interval.

RECOMMENDATION #4 - Pasadena should develop formal written procedures for staff to follow up on a property owner’s correction of violations. These procedures should identify the following:

A. The method in which staff document in the database the violations identified during inspections and their actions to bring the property into compliance. In addition, the procedures should identify where within the database these documents should be kept.

B. The protocol for ensuring that repeat violations are corrected in a timely manner.

RESPONSE – The City of Pasadena agrees with this recommendation.

A. The Interim Director of the Planning and Community Development Department will issue a memorandum to inform staff of the method to document violations in the land management system. The City anticipates reporting completion of this item in its scheduled report due at the six month interval.

B. The City will consider a protocol to address repeat violations. Any formal written procedures will involve input from local stakeholders and if there are any changes to current protocols, the changes will be issued to staff by memorandum from the Interim Director of the Planning and Community Development Department. The City will provide progress reports of this item in its scheduled reports.

RECOMMENDATION #5 - To ensure that property owners correct violations in a timely manner, Pasadena should do the following:

A. Develop a work plan by July 2016 to identify and address its enforcement backlog by April 2017, so that the city is up to date with its enforcement actions, such as issuing notice letters and monitoring property owners’ actions to resolve violations. Pasadena’s work plan should also include updating the completion status of the violations so unresolved violations can be identified and monitored for subsequent correction.

B. Follow through with its enforcement policies, such as issuing notice letters.

C. Establish a written process for inspectors to monitor and ensure that property owners correct violations, including accurately identifying the properties that have not obtained necessary permits or have not had required reinspections performed.

RESPONSE – The City of Pasadena agrees with this recommendation.

A. The Interim Director of Planning and Community Development will direct staff to identify and develop a work plan by July 2016 to address the backlog by April 2017.

B. The Interim Director of the Planning and Community Development Department will issue a memorandum to remind staff of the enforcement policies related to issuing notice letters. The City anticipates reporting completion of this item in its scheduled report due at the 60 day interval.

C. The Interim Director of the Planning and Community Development Department will also issue a memorandum with a written process for inspectors to monitor properties needing to correct violations or needing re-inspection. The City anticipates reporting completion of this item in its scheduled report due at the 60 day interval.

RECOMMENDATION #6 - To ensure that it conducts its resale record inspections and complete the reports in a timely manner, Pasadena should do the following:

A. Establish a process to monitor its ability to meet its established time goals from application date to report issuance, such as developing a reminder report or using an automated feature of its database. Pasadena should also document the date the report is issued on the resale record report and in its database.

B. Review its time goals by July 2016 for the resale record program and modify them if necessary, factoring in property owners’ expectations and staff resources to complete the reports. If applicable, Pasadena should update its policies and procedures to reflect the revised time goals.

C. Pasadena should also establish a method to identify those inspections that have inspection dates requested by property owners.

RESPONSE

A. The City of Pasadena agrees with the recommendation to monitor the established time goals. The City’s Department of Information Technology is creating a report function to monitor the time from application date to report issuance. The report will be reviewed periodically to monitor the time goal. The City anticipates this item will be completed in April and included in its scheduled report due at the 60 day interval.

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B. The City of Pasadena respectfully disagrees with the recommendation to review the time goal and modify them if necessary. The current policy and procedures in place related to time goals reflect the dedicated staff resources for this program.

C. The City of Pasadena agrees with the recommendation to establish a method to identify inspection dates requested by property owners. The Interim Director of the Planning and Community Development Department will issue a memorandum directing staff to add notes to the city’s land management system of property owner requested inspection dates. The City anticipates reporting completion of this item in its scheduled report due at the 60 day interval.

RECOMMENDATION #7 - To ensure that the resale record fees it charges is appropriate, the following should occur:

A. Pasadena should finalize its formal fee study by April 2016 that incorporates the actual costs associated with the issuance of a resale records report by dwelling type.

B. Pasadena should establish a time frame to periodically determine whether the fees are commensurate with the cost of administering the resale record program. The city should ensure that it retains any documentation used to support its analyses and any subsequent adjustments to fees.

RESPONSE – The City of Pasadena agrees with this recommendation. The City of Pasadena also acknowledges it significantly undercharges for the home occupation inspection fee.

A. The fee study will be finalized by April 2016 and the city will retain the documentation used to support the analysis.

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B. The fee is already reviewed annually with City Council adoption of a fee schedule. The city will conduct a cost of service study periodically and will retain the documentation used to support the analysis.

RECOMMENDATION #8 - To ensure that it can demonstrate that its resale record inspectors are qualified, the following should occur:

A. Pasadena should develop a process to maintain continuing education attendance records. The city should ensure that staff receive periodic continuing education through internal and external sources to enable them to be current on the building standards code requirements, especially when the requirements are updated.

B. If Pasadena subsequently requires its resale records inspectors to have ICC certifications, it should ensure that staff maintain them in good standing to perform their necessary job functions.

RESPONSE

A. The City of Pasadena agrees with the recommendation to maintain continuing education records. The Interim Director of the Planning and Community Development Department will issue a memorandum to staff requesting staff provide records periodically to the Department’s Management Analyst who will maintain employee continuing education records. The City anticipates reporting completion of this item in its scheduled report due at the 60 day interval.

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B. The City of Pasadena respectfully disagrees and has no intention to require ICC certification for resale records inspectors. If an individual inspector has ICC certification it will be their personal responsibility to maintain the certification.






Comments

CALIFORNIA STATE AUDITOR’S COMMENTS ON THE RESPONSE FROM THE CITY OF PASADENA

To provide clarity and perspective, we are commenting on the response to our audit from the city of Pasadena (Pasadena). The numbers below correspond to the numbers we placed in the margin of Pasadena’s response.

1

Although Pasadena states that its ordinance, rules and regulations, and policies provide a reasonable way to monitor the sale or exchange of properties, we believe the city should do more. As stated in the Audit Results of our report, Pasadena lacks procedures to monitor the sale or exchange of properties. In addition, as further noted in the Audit Results, the city receives updates from the county assessor regarding property transfers, but it has not used this information to monitor property owners’ compliance with the city’s ordinance.

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We stand by our recommendation that Pasadena review its time goals for the residential building record (resale record) program and modify them if necessary. As noted in the Audit Results, the city did not meet its goal from application to inspection for eight of the 20 resale records we reviewed, which we believe warrants a review of its goals and action by the city to modify them if necessary so that property owners have appropriate timing expectations.

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Although Pasadena states that the city council reviews the fees annually, the fees are not always changed. We noted in the Audit Results that the city adjusted its fees periodically based on the consumer price index. However, as we also discuss in the Audit Results, the city was unable to document how the current fee amounts were calculated and how those fees are commensurate with the costs incurred to operate its resale record program.

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We are unclear as to why Pasadena disagrees with this recommendation. As we note in the Audit Results of our report, the interim director of the planning and community development department acknowledged that his department would benefit from its resale record inspectors obtaining International Code Council certification so they would have advanced knowledge of code requirements. Accordingly, our recommendation focuses on ensuring that staff maintain certifications in good standing if the city subsequently decides to require these certifications.






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