San Francisco Government Audit and Oversight Committee Meeting - April 15, 2021
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San Francisco Government Audit and Oversight Committee Meeting - April 15, 2021
The Government Audit and Oversight Committee of the San Francisco Board of Supervisors met remotely on Thursday, April 15, 2021, to review the City's whistleblower program, consider the 35th supplemental COVID-19 emergency procurement and contract actions, and act on a series of litigation settlements. Committee members were Chair Preston, Vice Chair Chan, and Member Mandelman. All votes taken were unanimous 3-0.
Public Comments & Testimony
- David Pilpel spoke on the whistleblower hearing, recommending a future hearing on the Controller's rate-setting process review and asking whether whistleblower complaints inform the prioritization and risk assessment of city department audits.
- John Holden, a former Recology employee and union representative, submitted comments on the whistleblower hearing and the Recology settlement, saying corruption has been 'business as usual' in San Francisco for decades and that the Recology settlement felt rushed.
- David Pilpel commented on the COVID procurement item, thanking the committee for the public discussion.
- During the litigation agenda, David Pilpel asked for more explanation of the rate-calculation error and requested more transparency, suggesting the Recology settlement be continued until the Controller's public integrity review is heard.
Discussion Item: City Whistleblower Program Hearing (Agenda Item 1)
- Chair Preston requested the hearing and praised the program, saying it is crucial for uncovering corruption and improper conduct. He asked whether the Controller's office tracks whistleblower complaints by specific category, such as corruption.
- Controller's Office representatives Mark De La Rosa, Todd Reedstrom, Dave Jensen, and Steven Munoz presented the most recent whistleblower report (Q2 of FY 2020-21, issued March 15, 2021).
- Key statistics provided: complaint volume has risen since July 2012; 186 complaints were received in Q3 of FY 2020-21 as of March 31; 64 cases were open as of March 31 and 68 as of the meeting; in FY 2019-20, 105 were open, 291 received, and 330 closed, leaving 66 open as of December 31. About 75% of cases are closed within 90 days, which was achieved in Q2. Typically just over 50% of reports are investigated, about 11-21% are referred to departments with charter jurisdiction, and 30-40% of investigated complaints result in corrective or preventative action.
- The public integrity tip line, established after the Mohammed Nuru indictment, received 72 tips between February 2020 and the current period.
- Chair Preston asked for better tracking of outcomes after cases are referred to other agencies and discussed the need to consider incentivizing whistleblowers rather than only protecting them.
- Supervisor Chan asked about the consistency of outcomes and the high rate of referrals to the District Attorney and Ethics Commission, noting concerns about whether serious allegations lead to meaningful action.
- Supervisor Mandelman asked whether the increase in complaints tracks with city workforce size and whether the whistleblower program could have detected the corruption cases that later led to indictments. He urged a post-mortem and consideration of incentive structures.
- Controller's Office staff responded that charter-referred cases are not counted in the investigative outcome statistics, but they are exploring ways to capture and report those outcomes. They also mentioned a new case management system and weekly coordination with the City Attorney, District Attorney, and Ethics Commission.
Discussion Item: 35th Supplemental COVID-19 Emergency Declaration (Agenda Item 2)
- Deputy Controller Todd Reedstrom and Acting Director of the Office of Contract Administration Salija Corella presented on the 35th supplement to the Mayor's emergency proclamation.
- The 35th supplement, issued February 19, 2021, allows departments to extend COVID-19-related contracts for an additional 12 months, allows extensions of non-COVID contracts in six-month increments not later than June 30, 2022, and includes provisions for expedited payments to nonprofits for cost-of-doing-business increases.
- Presenters noted that in April 2020, over 10,600 city employees were working as disaster service workers; as of the meeting, about 2,800 remained in that role. The city's typical annual procurement includes over 3,300 written contracts and over 93,000 purchase orders, and the exceptions under the 13th supplement represented less than 1% of that volume.
- Specific numbers reported: 15 written executed contract exceptions totaling about $46 million, 129 grant award amendments totaling about $77 million, 19 direct purchase orders at $2 million, and 25 non-COVID contract extensions totaling about $120 million, as estimated by OCA for Chapter 21 contracts.
- A survey of seven departments identified 127 non-COVID contracts, totaling $578 million, for which extensions might be requested; 46% of those contracts are with nonprofits, and the largest is a $225 million UCSF agreement with DPH.
- Chair Preston questioned the elimination of the 13th supplement's monthly reporting requirement and the three-quote requirement. Presenters said reporting is now provided upon request and that their policy guidance still requires at least three quotes and a standardized list of contracts by August 15, 2021.
- Public comments were brief, with David Pilpel thanking the committee for the discussion.
Discussion Item: Litigation Settlements (Agenda Items 3-13)
- The committee considered 11 litigation matters: lawsuits with Frank Villa, Luis Angel Garcia Valencia, Jennifer Galarza, Recology San Francisco/Sunset Scavenger/Golden Gate Disposal and Recycling, Elena Ruiz-Diaz and Mercedes Arroyo, Armin Abdollahvand, Ramsey Abouremeleh, and unlitigated claims with Shipt, Inc., Katherine Ripley, Luis Hernandez, and Farmers Insurance Exchange.
- The city attorney's office, including Deputy City Attorney Ann Pearson, Yvonne Murray, and Ron Flynn, presented the Recology settlement in open session before closed session.
- The Recology settlement resolves claims that Recology made gifts and behested payments in violation of the Campaign and Governmental Conduct Code and omitted financial information during the 2017 rate-setting process, causing overcharges to ratepayers since 2017. The settlement includes $94,520,000 in restitution to ratepayers, $7,000,000 in civil penalties to the City, and a four-year injunction prohibiting gifts and behested payments, requiring disclosure of certain nonprofit payments and contracts with city officials, requiring lobbyist registration, and requiring public disclosure of financial errors and omissions.
- Supervisor Chan said the presentation helped her think about policy solutions to prevent such relationships. Chair Preston asked about the scope of the release, and the city attorney clarified the release covers claims related to the 2017 rate application and alleged gifts, but not other matters or criminal liability.
- Public commenters raised concerns about the settlement being rushed and asked for more transparency.
- The committee then voted to convene in closed session for the litigation items. After returning, the chair reported that the committee had voted to recommend all agenda items 3 through 13 to the full Board of Supervisors.
Key Outcomes
- The whistleblower program hearing (Agenda Item 1) was filed unanimously (3-0).
- The motion to recommend the 35th supplemental COVID-19 emergency declaration (Agenda Item 2) to the full board passed unanimously (3-0).
- The motion to recommend all litigation settlements (Agenda Items 3-13) to the full board passed unanimously (3-0).
- All recommended items are scheduled for consideration by the full Board of Supervisors on April 27, 2021.
- The Controller's Office agreed to continue discussions with the committee on improving reporting of outcomes for referred complaints and to provide quarterly updates on the whistleblower program.
Meeting Transcript
Mr. Chair, are you there? Now so um good morning. Uh this meeting will come to order. Uh welcome to the April 15th uh 2021 regular meeting of the government audit and oversight committee of the San Francisco Board of Supervisors. I am Supervisor Dean Preston, Chair of the Committee, uh joined by Vice Chair Supervisor Connie Chan and Committee Member Supervisor Raphael Mandelin. Um the committee clerk is John Carroll, and uh thank you to SFGov TV for staffing this meeting. Mr. Clerk, do you have any announcements? Yes, thank you, Mr. Chair. In order to protect the public, board members, and city employees during the COVID 19 health emergency, the Board of Supervisors Legislative Chamber and Committee Room are closed. This precaution is taken pursuant to all various local, state and federal orders, declarations, and directives. Committee members will attend the meeting through video conference and participate in the meeting to the same extent as if they're physically present in their committee room. Public comment will be available for each item on this agenda. Both San Francisco Cable Channel 26 and sfgovtv.org are streaming a public comment call-in number across the screen at this time. Your opportunity your opportunity to speak and provide your comments during any of today's public comment periods will be available to you via phone by dialing 415 65501. Once connected and prompted into the meeting ID for today's meeting, which is 18757161. Following that, press pound twice to be connected to the meeting. When you're connected, you will hear the meeting discussions, but your line will be muted and in listening mode only. When your item of interest comes up, dial star, followed by three to be added to the speaker line. A system prompts will indicate that you have raised your hand. Please wait until the system has indicated that you have been unmuted and that will be your opportunity to begin your comments. Best practices are to call from a quiet location, to speak it clearly and slowly, and to turn down your television, your radio, or streaming device. Everyone must account for time delays and speaking discrepancies that we may encounter between the live coverage and the streaming. Alternatively, you may submit your public comment in either of the following ways. You may email me. My name is John Carroll, and I'm the clerk of the government government audit and oversight committee. My email address is J-O-H-N, period C-A-R-R-O-L-L at SFGOV.org. If you submit your public comment by email, I will include it as part of the legislative file upon which you are commenting. Or you can send your written comments to our office in City Hall. Our office is in room 244 and City Hall's addresses one, Dr. Carlton B. Goodlett Place, San Francisco, California, 94102. And finally, Mr. Chair, items acted upon today will appear on the board agenda of April 27th, 2021, unless otherwise stated. Thank you, Mr. Clerk. Please call the first item. Agenda one is a hearing on the most recent whistleblower report from the Office of the City Controller and to review the status of the city's whistleblower program. Members of the public wish to try public comment on this hearing should call the public comment number and I'll repeat it one more time. 415-655-0001. Following that, enter the meeting ID of 1875 7161. Press the pound symbol twice to connect to the meeting and then press star followed by three to enter the queue to speak. Mr. Chair. Thank you, Mr. Clerk. And um I requested this this hearing today on the most recent uh whistleblower report. I'm very much looking forward to uh to getting the update on this.
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