Minutes of June 26, 2019 Enforcement Committee Meeting

  1. Call to Order. The meeting was called to order by Chair Scharff at the Elihu M. Harris State Office Building, 1515 Clay Street, Room 2, Oakland, California at 9:06 a.m.
  2. Roll Call. Present were: Chair Scharff and Members Gilmore, Ranchod, and Vasquez.

    Not present was Member Techel.

    Staff in attendance included Executive Director Larry Goldzband, Regulatory Director Brad McCrea, Chief Counsel Marc Zeppetello, Staff Counsel Karen Donovan, Chief of Enforcement Adrienne Klein, Enforcement Analyst Matthew Trujillo, and Legal Secretary Amitabho Chattopadhyay.

    Also in attendance was David Lewis of Save the Bay.

  3. Public Comment. Chair Scharff called for public comment on subjects that were not on the agenda.

    David Lewis of Save the Bay addressed the Committee. He highlighted an enforcement issue involving Middle Harbor Shoreline Park within the Port of Oakland.

    Lewis noted that BCDC issued a permit for appropriate use of the park. It is a public access point in the Bay that receives heavy use, especially from the west Oakland community that for many years had no Bay access.

    Lewis stated that the Port of Oakland has allowed large-scale private events in the park without receiving appropriate permission from BCDC. These events result in the park being unavailable for public use for extended periods of time, as well as extensive damage to the park that is not being repaired.

    Last year, Save the Bay requested the Commission to notify the Port of Oakland that they may not close off the park for private use unless they abide by the terms of the permit, and to repair the damage and maintain the park as required under the permit – essentially a Cease and Desist order. Lewis said that staff responded that they would monitor the situation.

    Lewis said this is a special opportunity in light of the audit because it is not a minor permit violation – it is a place that many people rely upon for public use and should be a priority for attention from staff as the program is being revamped. In addition, the Port of Oakland is a major customer of BCDC with a large amount of business – past, present, and future – before the Commission. The Port needs to take BCDC’s responsibilities and obligations seriously.

  4. Approval of Draft Minutes and Transcripts for the May 16, 2019 Meeting. Chair Gilmore asked for a motion and second to adopt the minutes and transcript of May 16, 2019.

    MOTION: Member Vasquez moved approval of the May 16, 2019 meeting minutes and transcript, seconded by Chair Scharff. The motion was adopted by a voice vote with no objections or abstentions.

  5. Upcoming Meetings and Enforcement Program Development. Ms. Donovan introduced the item. She stated that the present meeting was intended to set the schedule going forward. She indicated the upcoming meeting schedule. There is a Commission meeting on August 1; the August 15 meeting may be canceled because of the move to the Beale Street facility.

    Ms. Donovan asked if the committee members would like to move up the August 28 meeting; they agreed to the afternoon of August 14.

    They agreed to start the July 11 meeting at 10:00 a.m.

    They agreed to move the November 27 meeting to November 20 at 9:30 a.m.

    Ms. Donovan proceeded to review the recommendations and the topics schedule, and discussed topics to cover outside of the specific audit recommendations.

    Policies & Regulations

    Recommendation: Create a penalty calculation worksheet and create formal policies, procedures and criteria to provide guidance on applying the worksheet. Ms. Donovan explained that staff is anticipating that this would be a penalty policy. BCDC has been looking at how other agencies provide guidance on enforcement. There would potentially be some regulatory overlap.

    This will be a topic at multiple upcoming meetings; it will include discussion of specific issues particularly as they are laid out in the McAteer-Petris Act section addressing penalty factors.

    Recommendation: Create and implement regulations that identify required milestones and time frames for enforcement. Staff are not necessarily thinking it will be appropriate to have these milestones and time frames in a regulation. BCDC does want to develop some procedural improvements and anticipates that each case would have a management plan specific to the case.

    Member Vasquez asked how the Enforcement Committee would be involved; if they were engaged earlier as to how these cases are moving, it would probably help us in their understanding. Ms. Donovan responded that staff are exploring how to keep the committee updated on the caseload. They might enhance the information in the regular reporting but not have a specific report on each case closed.

    Member Vasquez responded that for staff to report on each case may not be the best use of their time; staff is seasoned enough to know repeat violators, and could give a heads-up on them. Ms. Donovan agreed. She said that staff often spend a lot of time trying to work things out cooperatively with violators. These case management plans could state when staff will step it up. She noted that establishing regular reporting might help in moving cases. Showing the case backlog might give data to discern whether the case management plans are really working.

    Chair Scharff commented that many years ago most court systems in the Bay Area had a similar issue: litigation cases took two or three years. Most court systems instituted a fast track stating that you had to finish your case within a year unless there was dispensation from the judge. BCDC could come up with a similar regulation that once a case opens, it must be closed within a certain period or it will have to go before the Enforcement Committee for an extension. Ms. Donovan liked the idea; her only hesitation was ensuring that staff had the bandwidth to carry this out.

    Member Gilmore liked the idea of adding fines because it provides certainty not just for the staff, but also for the permittee. Staff can develop a form letter to send. We can then move many of these cases forward without requiring staff bandwidth that we do not have. Ms. Donovan stated that the standardized fines regulations are designed to work in exactly that manner: you get a 35-day notice to correct the violation; moving forward, the regulations establish exactly what your fines will be. The fines accrue daily until they cap out. (Some of our backlog represents entities that have not yet even received the 35-day notice.) For violators who are not going to move through the standardized fine process, staff would still have it set up similarly so that they know the ground rules – the longer they ignore a violation, the more the penalties will accumulate.

    Member Ranchod commented that the sooner the case management plan concept can be instituted, the sooner staff will begin learning what is working and what is not; it would be best instituted between now and December 12. For the permittees who have allegedly violated their permit conditions, there needs to be visibility with the permittee when the case is opened so that they understand the plan. Member Ranchod also noted the difficulty for some permittees in meeting their timeline.

    Ms. Donovan explained that for procedural fixes, they have established December 12 as the date for an update on all of the process changes that they have managed to implement – to get cases moving and iron out improvements to the whole enforcement program. They will be working on these process improvements prior to December 12, and hope to report that some are being implemented successfully.

    Ms. Donovan stated that for those who have violated the McAteer-Petris Act, there is tension in deciding how much leeway should be given to them to negotiate the resolution. Staff grapple with how long the grace period should be. She agreed with Member Ranchod that the management plan should be transparent to the violator. She stated that they are continuing to discuss internally how to institute the plan for moving a case forward. The tension always involves the very limited staff BCDC has and the fact that each case is unique.

    Member Vasquez asked when the clock starts for the potential violator. Ms. Donovan answered that it varies based on how the violation is working – it will be very case-specific.

    Recommendation: Create and implement regulations to allow BCDC to use limited monetary fines to resolve selected minor violations that do not involve substantial harm to the Bay. Staff feels that the standardized fine regulations are intended to address limited monetary fines for minor violations.

    Recommendation: Create and implement regulations that define substantial harm, and specify a process to handle any necessary exceptions to the criteria. Staff is looking at doing this through guidance – potentially an amendment to the standardized fines regulations. They are going to be exploring that.

    Recommendation: Create and implement regulations that provide explicit criteria for calculating the number of violations present in individual enforcement cases, and specify a process to handle any necessary exceptions to the criteria. Here, staff can see doing this either through a new regulation (what the audit is suggesting) or having it as an element of the penalty policy. They will discuss how to calculate violations – what constitutes a distinct violation. One of the ultimate decision points will be: Does this issue fit within the penalty policy, or does this move as a standalone issue, where we will have either guidance or regulations?

    Member Gilmore noted that violations to our sign policy apply here. Sometimes we end up counting each violation separately, but when staff does the penalty calculation, they put the signs into one violation and give the permittee a break that way. Member Gilmore was in favor of this. Ms. Donovan responded that this is exactly what they would like to discuss: signs, benches, and so on. How do those violations get treated? She noted that in discussing this they have recognized that there is a distinction between the distinct conditions of a permit that are not being complied with and how that dovetails with what is considered a single violation.

    Process Changes

    Recommendation: Develop and implement procedures to ensure that management adequately reviews staff enforcement decisions. Procedures should document and substantiate violations, case resolutions, and rationale for imposing fines and procedures should require proactive enforcement, such as site visits, as resources allow. Staff sees two elements in this:

    1. Come up with a formal surnaming process (without too much bureaucracy).

    2. Improve the file management process, ensuring that the file for each case reflects the decision-making that went into the actions.

    Member Gilmore commented on file documentation, asking whether, at the meetings could staff simply take their notes and put them in the files, or does it have to be a longer procedure? Ms. Donovan confirmed that it could be that simple, and noted that the permitting process does have a more formal surnaming structure built into it.

    Recommendation: Develop and implement procedures to ensure that staff open, investigate, and close cases in a manner that is consistent with state law and encourages responsible use of staff time. Right now staff feels that they are doing this, and that they can improve the process – particularly in making the most efficient use of staff time.

    Recommendation: Develop guidance that enumerates the violation types that the commissioners deem worthy of swift enforcement action, those that staff can defer for a specified amount of time, and those that do not warrant enforcement action or that can be resolved through fines. Ms. Donovan saw this as a topic, in terms of a case management plan, to be scheduled for a specific discussion. She also wanted to have a discussion on resolving cases determined not to warrant enforcement action. This recommendation dovetails in part with the topic of prioritization.

    Recommendation: Simplify its system for prioritizing enforcement cases. Besides the November briefing, staff will also be handling this as part of the briefing for the Committee on procedural improvements in December.

    Recommendation: Develop a procedure to identify stale cases and seek appropriate settlements. This is scheduled for an upcoming briefing; staff are doing ongoing case review and trying to move enforcement cases to resolution.

    The following Recommendations require additional resources and depend on the budget process.

    Recommendation: Conduct a workforce study of all its permit and regulatory activities and determine whether it requires additional staff, including supervisors, to support its mission.

    Recommendation: Implement a permit compliance position to support the efforts of enforcement staff and implementation of process changes. If necessary, seek additional funding.

    Recommendation: Update its existing database or create a new database. A detailed briefing is scheduled in October.

    Member Gilmore asked for clarification on the database. Ms. Donovan answered that we are talking about the two “universes”: the enforcement cases already existing, and the permits being granted that need to be tracked for compliance. Right now those two universes do not interact very well together with the existing tools. The current database tracks enforcement cases and has been significantly improved with a GIS-based system, but it is still lacking. There are better platforms that would enable BCDC staff to do their job more efficiently.

    The next Recommendations involved evaluating and updating the permit fees, reviewing local agency compliance with the marsh program, and appointing a new citizens’ advisory committee.

    Chair Scharff asked what we are going to tell the legislators regarding the new citizens’ advisory committee. Executive Director Goldzband answered that the Commission reviewed this and decided that it was not required given previous outreach over the past five years.

    The last Recommendation involved creating a policy for disbursing Bay Fill Cleanup and Abatement Fund money.

    Ms. Donovan commented that we would very much like to explore the Bay Fill Fund recommendation, but without another source of funding for enforcement staff, it is very difficult to change our existing process (which has been approved by the Legislature and the Department of Finance).

    Chair Scharff asked the percentages of funding used for enforcement and for cleaning up the Bay. Executive Director Goldzband answered that BCDC does not use the Bay Fill Fund to clean up the Bay; those dollars are used 100% to pay for enforcement staff. They are authorized to do that up to a certain level; for an increase, BCDC would have to go to the Department of Finance, request an authorization increase, and have it put in the Governor’s Budget.

    Executive Director Goldzband continued that it is the policy of every Administration that Executive Branch agencies do not discuss with Legislators, staff, or anyone outside the Department of Finance, the programs or policy changes those agencies are requesting through the Governor’s Budget process.

    Ms. Donovan reviewed the topics scheduled for the upcoming meetings.

    Member Ranchod asked about the July 11 topic regarding “other agency penalty policies” – are those limited to state agencies, or do they also include other coastal zone management agencies? Ms. Donovan answered that they include agencies outside the state. Beyond just coastal management, they are looking to the Water Board for penalty policies, to the EPA, and to the DTSC.

    Chair Scharff asked if each of the meetings will have a deliverable for some staff change in policy which the committee will vote upon. Ms. Donovan answered that the initial meetings will be more like study sessions. Later there will be more of a product in the form of a draft. Chair Scharff paraphrased for clarity that we will have the meetings; staff will take back committee comments; staff will develop a policy that they will bring back to the committee. Ms. Donovan confirmed. Staff will present the practices of other agencies for the purpose of shaping product. In December, staff will provide a briefing of all of the process improvements we have done, successes achieved, and changes that have not worked. Prior to that, there will be action items and specific items to be approved.

    Member Ranchod suggested that staff should make clear in advance if there are particular issues and policy questions for which they want feedback. Chair Scharff added that it will be helpful for staff to highlight the decisions they want from the committee. Ms. Donovan agreed and said that staff will have a mailing packet to go out; they want the public to know the issues being discussed and to be able to provide input. They are seeking to make this as transparent as possible.

    Chair Scharff emphasized that the more BCDC makes progress on actual deliverables, the more it feels like they are accomplishing something rather than just talking about it. The meetings should consist less of talking endlessly than of decision making and resolving issues. This will be facilitated by having staff highlight issues for resolution.

    Ms. Donovan noted that for November 14, the goal is to have an actual penalty policy up for discussion. Staff will make sure that the meetings are not just endless briefings and presentations. She also mentioned that staff’s eventual plan is to have the first meeting of the month to be hearings on cases. For September 12, the Committee will have its next discussion of Richardson’s Bay and a few other cases.

    Member Vasquez commented that the audit is just a snapshot: a different group of people looking at an operation. As they go through this, they can be building blocks by consensus, and giving staff direction on things they need to implement, or have already been implementing but have now identified. Ms. Donovan confirmed that this is exactly the intent. For each of these briefings or discussions on substantive issues, if staff and the Committee come up with new ideas, they will incorporate them into the plan and work them into additional product sooner rather than later.

    Staff also recognizes that the audit is not an exclusive list of the changes BCDC should make; internally staff and the Committee have their own ideas. Ms. Donovan had started with the issue of regular reporting on cases. They can have regular updates for the committee and maybe quarterly updates for the Commission.

    Member Vasquez spoke regarding economic benefit. Is staff looking for people taking unfair business advantage by not getting a permit? Ms. Donovan confirmed that that scenario is a major part of it; the Water Boards policy counts it as a major component in assessing penalty. The EPA has specific models that staff will be looking at.

    Member Gilmore noted that this had come into play when BCDC was dealing with Scott’s Seafood: they had received an economic benefit from having the pavilion in the location where they had extra square footage to rent out for all sorts of events. The Commission ultimately reached a settlement with fines and penalties; the economic benefit went into those. The problem that BCDC has is that nothing in the process talks about that kind of benefit. In terms of being transparent and enabling applicants and permittees to know what is expected, having a policy would be very beneficial. Ms. Donovan agreed and stated that staff will be exploring that. Chair Scharff pointed out that businesses may be looking for the spot where the fines are less than the value of the noncompliant economic benefit.

    Next, in response to the earlier discussion, Mr. McCrea provided some brief comments on the Port of Oakland case that Mr. Lewis had discussed.

    • He explained that other groups have come forward complaining about maintenance and overuse of the park. The park holds public festivals that people must pay to attend. However, the permit has an authorization requirement that these events must be reviewed and approved by BCDC design analysts each time.
    • BCDC has advised the Port of Oakland that if they want to streamline their event process, they can expand the authorization to have a certain number of events with criteria and parameters to follow.
    • BCDC has been working with Port staff over the last two weeks to address the violations and has told them that they are preparing an Executive Director’s Cease and Desist Order.
    • Over the coming weeks and months, staff will be working with the Port. Mr. McCrea noted that the park is a spectacular space worthy of the maintenance it deserves and some maintenance issues exist.
    Chair Scharff commented that much of the thrust of the audit was that we are too amenable to violators taking too long. We need to be tougher.

    Member Gilmore commented that this happens a lot: there are issues of public access and of maintenance, and the two should not always be lumped together. BCDC can be tougher on the maintenance aspect, and negotiate on the use aspect – anything to get them moving along. The hammer is the maintenance. Ms. Donovan stated that the Committee should talk about the matter in the upcoming meeting on milestones.

    Member Gilmore stated that if BCDC can get the permittee to start doing the maintenance, it might take pressure off staff and they can start working on the use component. Chair Scharff strongly agreed.

    Ms. Donovan addressed Chair Scharff’s concern about making the Commission process more efficient. BCDC currently holds administrative hearings at the committee level; per the regulations, committee recommendations then go to the Commission for approval.

    Chair Scharff noted that staff regularly mentions their limited resources. Streamlining the process for administrative hearings will make both staff and the committee better off. He would like staff to identify the roadblocks for getting rid of the backlog completely. How can BCDC do more with the limited resources? How can we not spend a lot of time on things with known outcomes?

    Executive Director Goldzband said that inherent in the audit analysis, but extensively discussed, is the tension between efficiency and amicability. Chair Scharff asked if we are going to change the culture – to move the needle further away from amicability. Executive Director Goldzband asked if the committee feels it necessary for staff to move the needle as such. As BCDC and the Committee work through the process over the next months, they will need to explain to the auditors and the public about any move they decide upon.

    Member Gilmore commented that presently, permittees view BCDC as having a culture where it is better to ask for forgiveness than for permission. Further, if you end up having to ask for forgiveness, it is an open-ended, long process in some cases. Member Gilmore did not feel this is acceptable. BCDC needs to move the needle the other way. Permittees should feel that it is better to ask for permission.

    Chair Scharff agreed. If we’re not planning on moving the needle, why are we here? He noted that with the existing process, thinking of how an attorney would defend a permittee, obfuscation, delay, and not following through would be the best strategies. He thought the intention of these policy discussions was to determine where to move the needle. Ms. Donovan said she would embed that element in the policy discussions.

    Member Vasquez stated that it is about due process for the individual coming before BCDC. How long is the due process? BCDC needs to establish a policy. Does the permittee drive the compliance or does the Enforcement Committee drive it? Ms. Donovan stated that for the standardized fine process, there is the 35-day limit spelled out in the regulations. (There will be a detailed discussion on whether to change the regulations in the future.)

    Member Vasquez described how the “creep” pertaining to permits happens in permitting agencies of every sector.

    Ms. Donovan stated that she could add a discussion on compliance – using available resources more efficiently and whether that would help BCDC control the case backlog.

    Member Gilmore emphasized the importance of setting clear boundaries with clear expectations and consequences. When letters go out, staff could attach BCDC’s violation fee schedule with clear dates.

    Mr. McCrea stated that the state auditors had mentioned a gap between working with violators and giving them too much lead time, then hitting them hard with a letter that seems to come out of the blue.

    Mr. Trujillo stated that staff does attach a violation fee schedule with their letters. They try to forecast for the violator the consequences of noncompliance. The part that tends to fall off is the follow-through.

    Chair Scharff felt that the real issue is the culture of being amicable to working it out with the violator – a real resource drain. The Commission can only be as amicable as its staff resources allow. The culture needle is partly driven by the amount of resources BCDC has. He also pointed out that in Santa Clara County, people settle cases right before they are scheduled to go to alternative dispute resolution, or they settle at the settlement conference five days before trial. People will settle with BCDC when a deadline is set; staff needs to set it earlier.

    Member Ranchod felt that regarding the permission versus forgiveness concept, on the enforcement side violators are asking for forgiveness, and BCDC is being very accommodating because violators give what seem to be legitimate reasons or excuses. However, the BCDC enforcement program does not have the staff resources to consistently apply that level of forgiveness. It is resulting in a massive backlog that cannot be cleared unless that approach is changed.

    Member Ranchod felt that regarding the changing expectations issue, the case management system and clearer and more frequent communication with the permittee are important. The auditors’ recommendations are the context for changing BCDC’s approach. Staff needs to be proactive in communicating this, not just on a case-by-case basis – but to apply the new processes and time lines consistently to new cases going forward and to the backlog. If people do not believe there is accountability, there will be no action.

    Mr. Olsson pointed out that in some cases, our limited resources can make it more efficient to not go to the Enforcement Committee. Staff may know that the violator will resolve the case within a few months.

    Ms. Klein spoke about considering the severity of the violations at the outset and the time involved. The violators may be working to resolve the issues identified; staff does need a solution for the point at which the scope of the issues has decreased but not resolved. Staff does not know if the last item may take a year. Some mechanism for shortening the life of a case is a beneficial idea.

    Member Gilmore commented on the difference between a permittee who is actually working with staff and it is taking some time, versus the permittee who says they will do it but in actuality does not. There needs to be a distinction between the two kinds of cases.

    Mr. Trujillo noted Mr. Olsson’s point about the efficiency of keeping cases that are in motion at staff level. Streamlining the process for that type of case would help staff.

    Member Gilmore liked the Consent Calendar idea. Ms. Klein suggested building in a practice for staff to have an opportunity to recommend a reduction on the total fine amount.

    Chair Scharff felt that BCDC should be careful about giving extensions.

    Member Gilmore pointed out that fines are the major tool in the enforcement program’s toolbox. However, there may be mechanisms other than fines. Mr. McCrea noted that the Commission has the ability to revoke permits, but have not done so in the last 20 years.

    Ms. Donovan liked the idea of providing other tools. Would someone be more amenable to closing out their violation if they could apply their penalty money to a beneficial project, for example?

    Ms. Klein pointed out that for the future, the permit compliance piece is very important because about half of the allegations BCDC receives are for permit violations and half are for unpermitted development. Many of the permit violations are for failing to fully implement permit requirements. If full permit compliance can be achieved at the outset, then when a maintenance issue is found, all the documentation would be in place, and the scope of the violation would be much smaller. Some kind of incentive for permittees to proactively contact enforcement staff after they get their permits and make sure that they are voluntarily achieving compliance would be a huge benefit to the public and to staff.

    Member Vasquez commented that for a city project, it is not complete until the city signs off on everything. Ms. Klein responded that staff has talked about making a change along those lines.

    Ms. Donovan commented that for some permitted projects, there is an ongoing reporting requirement. A part of the compliance discussion should include improvements BCDC can make to ensure that compliance cannot lag.

    Member Vasquez commented that for a city, documents are not given until everything is done. Member Gilmore suggested that this could be another tool for the toolbox.

    Ms. Donovan stated that in advance of the next meeting, she would recirculate the meeting schedule with the new dates as well as a list of the meeting topics. This pre-meeting communication will be ongoing.

  6. Report of the Chief of Enforcement.

    Ms. Klein introduced new Legal Secretary Amitabho “Amy” Chattopadhyay.

  7. Adjournment. There being no further business, the 24 meeting adjourned at 11:09 a.m.