Go to Site Admin and choose the project you use on the Site Project tab.
Then go to SEQUENCES table in this project.
Instead of "Select * From SEQUENCES" input the following:
set SQ_SEQ_VALUE = 0
where SQ_SEQ_NAME = 'BUG'
Click "Execute SQL" button.
Now you have defect_id counter for the chosen project started with 1.
Vladislav Orlikov, CJSC "Quorum Telecom"
Quality Assurance Department Director