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HomeMy WebLinkAboutCity of San Diego - Independent Budget Analyst Report 2022 Attachment 1 OFFICE OF THE INDEPENDENT BUDGET ANALYST 202 C STREET MS 3A SAN DIEGO, CA 92101 TEL (619) 236-6555 FAX (619)-236-6556 OFFICE OF THE INDEPENDENT BUDGET ANALYST REPORT Date Issued: June 15, 2022 IBA Report Number: 22-16 REV City Council Docket Date: June 20, 2022 Item Number: 201 Fiscal Impacts Associated with Proposed Surveillance Ordinance On November 10, 2020, the City Council conducted the first reading of two ordinances intended to regulate the City’s use, acquisition, and funding of surveillance technology (Surveillance Ordinance), and to establish a Privacy Advisory Board (PAB Ordinance). At that meeting, Councilmember Campbell requested that our Office conduct an analysis of fiscal impacts that are anticipated to be associated with the proposed Surveillance Ordinance, including any revisions to the ordinance that may occur as a result of the meet-and-confer process. The meet-and-confer process has since concluded with no changes made to the version of the Surveillance Ordinance that the City Council amended at the November 10, 2020 meeting. This report includes a discussion of fiscal impacts associated with the proposed Surveillance Ordinance to help inform Council’s second reading of the ordinance, anticipated to occur on June 20, 2022. Given the approval and annual reporting provisions within the Surveillance Ordnance, which are outlined in the “Background” section of this report, the proposed Surveillance Ordinance will increase staff’s overall responsibilities associated with use of Surveillance Technology going forward. For this reason, staff time and resources are immediately recognizable as likely fiscal impacts. Other impacts that we discuss in this report include potential legal liabilities, consultant costs, and operational impacts that may result should existing technologies fail to receive approval. While this report focuses on the request made to our Office to identify fiscal impacts, it is also important to acknowledge the non-fiscal benefits cited by proponents of the proposal, including added transparency, oversight, and accountability measures to protect civil rights and civil liberties. 2 BACKGROUND The Surveillance Ordnance incorporates into the Municipal Code a process that City staff will be required to follow in order to fund, acquire and use “Surveillance Technology,” which is broadly defined within the ordinance (see right). New Surveillance Technology is differentiated from existing Surveillance Technology depending on whether the City possessed, used, or has a contract in force and effect for the use of Surveillance Technology before the effective date of Surveillance Ordinance. Approval of New Surveillance Technology Once in effect, the Surveillance Ordinance will require staff to complete the following before seeking City Council approval to use or fund new Surveillance Technology: 1) Conduct at least one community meeting in each Council district where the proposed Surveillance Technology would be located; 2) Prepare a Surveillance Use Policy that includes among other requirements, the Surveillance Technology’s proposed purpose and use, and how data will be collected, accessed, protected, retained, and shared; 3) Prepare a Surveillance Impact Report that includes among other requirements, a description of how the Surveillance Technology works, the location(s) where it will be deployed, an assessment of the Surveillance Use Policy and other impacts, fiscal costs, and alternatives; 4) Submit Surveillance Use Policy and Surveillance Impact Report and seek review and recommendation(s) from the Privacy Advisory Board at a publicly noticed meeting; and 5) Seek City Council approval. Following these new requirements, the City Council docketing and approval process is largely unchanged, though the Council will need to take additional actions to: approve the new Surveillance Impact Report and Surveillance Use Policy, determine that the benefits to the community of the Surveillance Technology outweigh the costs; determine that the proposal will safeguard civil liberties and civil rights; and determine that, in the City Council’s judgment, no alternative with a lesser economic cost or impact on civil rights or civil liberties would be as effective. Approval of Existing Surveillance Technology For existing Surveillance Technology, a separate review and approval process is outlined in the Surveillance Ordinance with a one-year grace period allowing for the continued use of existing Surveillance Technology before approval is required. The process that Staff must complete during the one-year grace period is as follows: “Surveillance Technology” means any software (e.g., scripts, code, Application Programming Interfaces), electronic device, system utilizing an electronic device, or similar device used, designed, or primarily intended to observe, collect, retain, analyze, process, or share audio, electronic, visual, location, thermal, olfactory, biometric, or similar information specifically associated with, or capable of being associated with, any individual or group. It also includes the product (e.g., audiovisual recording, data, analysis, report) of such surveillance technology. 3 1) Provide the Privacy Advisory Board with a comprehensive list of Surveillance Technology that is possessed or used by the City; 2) Conduct at least one community meeting in each Council district where each proposed Surveillance Technology would be located; 3) Prepare a Surveillance Use Policy for each existing Surveillance Technology; 4) Prepare a Surveillance Impact Report for each existing Surveillance Technology; 5) Submit at least one Surveillance Use Policy and Surveillance Impact Report per month and seek review and recommendation(s) from the Privacy Advisory Board at a publicly noticed meeting; and 6) Seek City Council approval for each existing Surveillance Technology. Annual Surveillance Report The Surveillance Ordinance requires ongoing oversight of each City Council approved Surveillance Technology in the form of an Annual Surveillance Report. The Annual Surveillance Report is to include information on how Surveillance Technology is being used, any updates or changes that may have occurred, any data sharing, a summary of community complaints, and an analysis regarding whether, and to what extent, the use of the Surveillance Technology disproportionally impacts certain groups or individuals, among other requirements. Staff will be required to prepare the initial Annual Surveillance Report for each individual Surveillance Technology and submit it to the Privacy Advisory Board for review within one-year following City Council approval and annually thereafter. Each Annual Surveillance Report would proceed to the City Council for approval following the Privacy Advisory Board’s review. FISCAL/POLICY DISCUSSION A. Fiscal Impacts related to Staff Time and Resources Potential New Staffing Needs Given the approval and annual reporting provisions within the Surveillance Ordnance described above, increased staff time and resources will be required in order to use Surveillance Technology going forward. Most of this increased staff time is likely to be associated with the preparation of the various required reports and attending community meetings. Since it is unknown how many new Surveillance Technologies will be brought forward for approval after the proposed Surveillance Ordinance is adopted, our review of fiscal impacts focuses on existing Surveillance Technologies. Given that the amount of time to seek approval of existing Surveillance Technologies is limited to one-year under the Surveillance Ordinance, this is also the period during which staff’s resources will be most impacted. To determine the fiscal impacts related to this, a better understanding of the City’s existing use of Surveillance Technology is required. The best information currently available is a list of approximately 400 technologies that was self-identified by individual departments last year. According to the City’s Chief Compliance Officer, this is a preliminary list that has yet to be fully vetted to eliminate duplicate listings that would amount to a single Surveillance Technology (e.g., online meeting platforms such as Zoom or Microsoft Teams, or internet search engines) or exempted technologies. Additionally, the Compliance Department plans to undertake a 4 communications effort to better educate City Departments regarding the technologies that would be subject to the Surveillance Ordinance, which may potentially result in changes to the preliminary list. Within the preliminary list, it is notable that most departments identified less 10 potential Surveillance Technologies that they currently utilize. It is our belief that most, if not all, of these departments should be able to absorb the added responsibilities associated with the Surveillance Ordinance without the need for additional staff. Two departments are notable outliers however: the Police Department, which identified more than half of the overall total potential Surveillance Technologies, and the City Attorney’s Office which identified approximately 50-60 potential Surveillance Technologies. For these departments, it may be reasonable to assume additional staffing of 1-2 positions could be requested to coordinate preparation of the required reports with the various subject matter experts in each of these Departments. We estimate the cost per position to range between $100,000 up to $150,000 depending on the position classification. With that said, there are other factors which will ultimately determine the extent of how much additional time and resources will be required. For example, we understand that the Compliance Department plans to create streamlined document templates to aide staff when preparing the required reports and policies. The Compliance Department also plans to develop standardized processes for other departments to utilize when tracking requirements of the Annual Surveillance Report (e.g., software updates/technology upgrades, PRA requests, community complaints, data breaches, etc.). Depending on the result of these efforts, overall staff time could be meaningfully reduced. Additionally, our Office notes the City Council could consider certain modifications to the proposed Surveillance Ordinance which we believe could further mitigate the fiscal impacts described above. a) Consolidated Community Meetings – Allow the option for consolidated (or Citywide) community meetings in instances when more than one community meeting is required for an individual Surveillance Technology; the City Council could also consider allowing virtual meetings, if measures are taken to ensure broad community access. b) Annual Surveillance Reporting Exemptions – Allow as a part of the City Council’s approval process for new or existing Surveillance Technologies, the ability to exempt from Annual Surveillance Reporting requirements any Surveillance Technologies that, in the judgement of the Privacy Advisory Board and/or City Council, are determined to not impact civil rights or civil liberties (e.g., use of Zoom for video conferencing, or Google Search functions); c) Consolidated Annual Surveillance Reports – Allow the option for Annual Surveillance Reports to be consolidated rather than requiring separate Annual Surveillance Reports for each individual Surveillance Technology. We caution that that this discussion is based on preliminary and unvetted information and is only intended to provide a general idea of potential additional staffing resources that could be required. As discussed above with respect to the approval process for existing Surveillance Technology, the City will need to provide the Privacy Advisory Board with a fully vetted, comprehensive list of existing Surveillance Technologies that are currently in use. More information concerning the need for additional staff resources could be better determined at that time. 5 Existing Resources Budgeted for Surveillance Ordinance We note that 1.00 Program Manger position and $162,000 was added to the Compliance Department in the FY 2022 Adopted Budget to implement and ensure the City’s compliance with the Surveillance Ordinance. The position, which is anticipated to be filled in July, is expected to be the primary point of contact for surveillance matters for City staff, elected officials, and public stakeholders. Currently, this is only budget position that is fully dedicated to Surveillance Ordinance compliance matters. B. Potential Legal Liabilities The proposed Surveillance Ordinance would allow a private party to sue the City to enforce its provisions. If that private party was to prevail in court, the City would be required to pay attorney fees and costs, and actual damages, not less than liquidated damages of $1,000 or $100 per day for each day of violation, whichever is greater. While our Office is unable to estimate fiscal impacts associated with future potential legal actions against the City, the City Attorney’s Office in their report titled “Analysis of Revised Draft Transport and Responsible Use of Surveillance Technology Ordinance,” dated October 30, 2020 (Attachment 1), suggested that the following modifications to the Surveillance Ordinance should be taken into consideration in order to limit the extent of legal liabilities: a) Require written notice of alleged violation – According to the City Attorney’s report, other jurisdictions with ordinance’s similar to the proposed Surveillance Ordinance, including Santa Clara County, Berkeley, Seattle, the BART District, San Francisco, and Davis, require written notice of any alleged violation anywhere between 30 to 90 days before legal actions is pursued to allow them an opportunity to investigate and to cure the violation. b) Exclude Technicalities – The City Attorney’s Office suggests that the right to sue should apply to material violations, and not technicalities, to prevent abuse and protect the City’s General Fund. c) Limit the award of attorney’s fees – Santa Clara County limits the award of attorney fees for violations by capping it at $100 per hour, and not to exceed $7,500 in total. For a recovery of attorney fees, Santa Clara County also requires that any violation of their ordinance be the result of arbitrary or capricious action or conduct of Santa Clara County employees. Berkeley also includes prior written notice before a lawsuit can be brought, and caps attorney fees at $15,000. C. Consultant Costs As discussed within the “Background” section of this report, each Annual Surveillance Report will require an analysis of the corresponding Surveillance Use Policy for that particular Surveillance Technology be conducted to determine whether it is adequately protecting civil rights and civil liberties. The Surveillance Ordinance states further that the analysis shall consider whether, and to what extent, the use of the Surveillance Technology disproportionally impacts certain groups or individuals. While all other components of the required reports and policies appear to be suitable for City staff, this particular analysis may require the expertise of outside professional consultants for certain Surveillance Technologies. With that said, given that the cost is likely to vary considerably depending on the Surveillance Technology in question, and the fact that it is unknown 6 how many Surveillance Technologies would require consultant services, we are unable to estimate this potential fiscal impact. D. Opportunity Costs In economics, “opportunity cost” generally refers to the lost value of something when one alternative is chosen over another. With respect to the Surveillance Ordinance, there may be opportunity costs should the use of one or more existing Surveillance Technologies no longer be allowable. For example, if a City facility’s security camera system failed to receive approval under the Surveillance Ordinance, and the alternative was to contract private security services, the increased cost associated with the latter would constitute the opportunity cost in this example. While opportunity costs are not quantifiable at this time, they could be significant. However, given that fiscal costs and alternatives for each Surveillance Technology are required to be discussed as a component of the Surveillance Impact Reports, any such potential opportunity costs should be known to the Privacy Advisory Board and City Council at the time of their review. CONCLUSION Councilmember Campbell requested our Office conduct an analysis of fiscal impacts that are anticipated to be associated with the proposed Surveillance Ordinance. As outlined above, we identified several fiscal impacts, including staff time and resources, potential legal liabilities, consultant costs, and potential impacts that may result should existing technologies fail to receive approval. However, due to the significant number of unknown variables that would significantly influence a fiscal impact analysis, we are unable to meaningfully quantify all potential impacts. With that said, in this report we do summarize and approximate fiscal considerations to the extent possible. We also offer for Council’s consideration, certain modifications to the proposed Surveillance Ordinance intended to mitigate potential fiscal impacts. However, given that Council’s action on June 20th will constitute the second reading of the proposed Surveillance Ordinance, it should be noted that if Council chooses to include any of our suggested modifications, the City may be required to reintroduce the proposed Surveillance Ordnance and comply with collective bargaining requirements under the Meyers-Milias-Brown Act (MMBA). Given this, the Council may wish to ask for more information from the City Attorney’s Office concerning these requirements. Attachment - Office of the City Attorney report titled “Analysis of Revised Draft Transport and Responsible Use of Surveillance Technology Ordinance,” dated October 30, 2020