OPENPUBLICA · PUBLIC MEETING RECORD
Record of Proceedings

Government Audit and Oversight Committee Meeting - January 19, 2023: LBE Disparity Study Resolution and Closed Session Settlements

Government Audit and Oversight Committee — Thursday, January 19, 2023
BodySan Francisco, California
SessionGovernment Audit and Oversight Committee
DateThursday, January 19, 2023
StatusFILED
Video Record
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0:09

Good morning.

0:10

This meeting will come to order.

0:11

Welcome to the January 19, 2023 regular meeting of the government audit and oversight committee of the San Francisco Board of Supervisors.

0:19

I'm Supervisor Dean Preston, chair of the committee, joined by Vice Chair Connie Chan and Supervisor Raphael Mandelman.

0:26

The committee clerk today is Stephanie Cabrera, and uh want to thank our team at uh SFGov TV for staffing this meeting.

0:33

Madam Clerk, any announcements?

0:35

Yes, thank you.

0:36

The Board of Supervisors and its committees are now convening hybrid meetings that allow in-person attendance and public comment while still providing remote access and public comment via telephone.

0:45

The board recognizes that equitable public access is essential and will take public comment as follows.

0:50

First, public comment will be taken on each item on this agenda.

0:54

Those attending in person will be allowed to speak first.

0:56

Then we'll take those who are waiting on the telephone line.

0:59

For those watching either channel 26, 28, 78, or 99 and sfgovtv.org, the public call-in number is streaming across the screen.

1:09

The number is 415 65501.

1:14

Again, 415 655 0001.

1:18

Then enter meeting ID 2491 3720218, then press pound twice.

1:26

When connected, you will hear the meeting discussions, but you will be muted and in listening mode only.

1:31

When your item of interest comes up, the public comment is called.

1:35

Those joining us in person should line up to speak, and those on a telephone should dial star three to also be added to the speaker queue.

1:41

If you are on your telephone, please remember to turn down your TV and all listening devices you may be using.

1:46

As already stated, we will take public comment from those attending in person first, and then we will go to our public comment telephone line.

1:53

Alternatively, you may submit public comment in writing in either of the two ways.

1:57

Email them to me, the government audit and oversight clerk at Stephanie STE PHANIE.

2:04

Gabrera, C as in California, A, B as in Bay, R E R A at SFgov.org.

2:12

If you wish to submit public comment via email, it will also be forwarded to the supervisors and included as part of the official file.

2:18

You may also send your written comments via U.S.

2:20

Postal Service to our office in City Hall at one Dr.

2:24

Carlton B Goodlit Place, room 244, San Francisco, California, 94102.

2:31

Finally, items acted upon today are expected to appear on the Board of Supervisors' agenda of January 31st, unless otherwise stated.

2:38

Thank you, Chair Preston.

2:39

That concludes my announcement.

2:40

Thank you, Madam Clerk.

2:41

And please call item one.

2:43

Item number one is a resolution urging the city administrator's office to conduct a local business enterprises LBE disparity study to analyze disparities in the city and county of San Francisco's contracting to women-owned minority-owned and disabled veteran-owned businesses.

2:58

Members of the public who wish to provide public comment on this item should call 415-655-0001.

3:05

When prompted, enter meeting ID 2491 3720218, then press pound twice.

3:12

If you haven't done so already, please dial star three to line up to speak.

3:15

The system prompt will indicate that you have raised your hand.

3:18

Please wait until the system indicates that you have been unmuted and you may begin your comments when we go to public comment.

3:24

Thank you, Madam Clerk.

3:25

And this item is sponsored by Supervisor Mirna Melgar, who is here uh joining us today.

3:31

I want to thank you for your leadership on this.

3:32

And uh Supervisor Melgard, the floor is yours.

3:36

Thank you so much, uh Chair Preston, and thank you uh uh supervisors Mandelman and Chan for uh hearing this item as well.

3:45

Um so this is a resolution uh requesting that the city administrator conduct a disparity study for our LBE program.

3:54

And what that is is um a report, a measure of uh uh how our LBE program is doing in uh providing opportunities for certain types of businesses.

4:08

Um, you know, as as compared to their representation in the general contractor population.

4:15

So for example, if uh 50% of contractors uh in San Francisco are women-owned, but only 20% are participating in the LBE program.

4:26

We know that we have you know an area of growth in the program.

4:30

So backing up as to why this is needed at this time.

4:34

You know, we have going been going through tremendous efforts to um recover from the pandemic.

4:40

And we know that during the pandemic, our small businesses suffered particularly.

4:45

Um and there are some businesses within the general small business population that suffered even more.

4:50

We know that women-owned businesses uh you know had lower rates of access to PPE loans to lending all kinds of things.

4:56

So we have not, we have never conducted a disparity study since the program started.

5:02

You may remember that we used to have a program to advantage women-owned businesses and you know minority-owned businesses, and then proposition 209 did away with all of that.

5:14

So we quickly pivoted to what is a local business enterprise program.

5:20

This is an LBE, but we have never measured it.

5:23

We have never seen whether you know the program is working as we had intended, or if it even reflects the general population of small businesses in the city demographically.

5:36

I am interested in women-owned businesses, minority-owned businesses, and disabled veteran-owned businesses in particular, because we know that those are the business categories that tend to have less access to capital, less facility with dealing with a bureaucracy.

Discussion Breakdown — Share of Meeting
Procedural███████████████████████████████████35%
Local Business Enterprise███████████████████████23%
Public Comment█████████████13%
Pending Litigation█████████████13%
Procurement██████████10%
Economic Development██████6%
Summary of Proceedings

Government Audit and Oversight Committee Meeting – January 19, 2023

The Government Audit and Oversight Committee of the San Francisco Board of Supervisors met on January 19, 2023, at 10:15 a.m. (local time) to consider a resolution urging the City Administrator to conduct a disparity study of the Local Business Enterprise (LBE) program and to discuss 11 settlement and litigation items in closed session. The committee voted unanimously to recommend the resolution to the full board and to forward the closed‑session items with a positive recommendation.

Public Comments & Testimony

  • Hanley Chan (disabled veteran, San Francisco native) expressed strong support for the study, noting that the state has a Disabled Veteran Business Enterprise (DVBE) program and asking why the city cannot do the same. He urged the committee to "make history."
  • Courtney Ellington (Veterans Affairs Commissioner, woman‑, minority‑, and service‑disabled veteran‑owned business) supported the research but questioned whether the study would address the real problem of contracts not being fulfilled. She cited personal experience of being listed as a subcontractor but never contacted after the prime contractor won the bid.
  • Omar Farmer (veteran, black male, San Francisco entrepreneur) fully supported the disparity study, stating it would bring more aspiring small business owners into the fold and lead to more equitable outcomes.
  • Ann Travantes (San Francisco Latino and Black Builders Association) recommended not conducting a full‑blown disparity study, noting that existing data from the SFTA disparity study could be used. She reported a 78% drop in African American‑owned businesses and a 75% drop in Latino‑owned businesses in the city since 2004. She also stressed the need for enforcement and for departments to resume tracking data as they did before Proposition 209.
  • Alex Chu (President, San Francisco Coalition for Economic Equity) strongly supported the study, calling it long overdue, and noted that minority‑owned businesses have struggled even before the pandemic.
  • Bruce Giron (President, National Association of Minority Contractors, Northern California chapter) supported the study with urgency, stating that Proposition 209 has been "more effective psychologically than it ever was envisioned to be" and that a disparity study is a necessary first line of defense against an unfair infrastructure.
  • Dr. Matthew Ajra K (President, San Francisco African American Chamber of Commerce) warned that a disparity study could confirm the decimation of African American businesses caused by Proposition 209, thereby showing no availability and leading to a circular argument. He urged the city to create programs to ensure businesses exist before the study confirms their absence.
  • Lamar Heisteck (President, Asian Inc.) stood shoulder‑to‑shoulder with other organizations, thanked Supervisor Melgar for sponsoring the resolution, and noted that LBEs hire locally and are a workforce development solution. He also mentioned that the Contract Monitoring Division already has utilization data and that a disparity study has been long overdue.

Discussion Items

  • Resolution 221209 – Urging the City Administrator to Conduct an LBE Disparity Study
    • Sponsor: Supervisor Mirna Melgar introduced the resolution, explaining that the LBE program has never been measured since its inception following Proposition 209. She emphasized the need to analyze disparities for women‑owned, minority‑owned, and disabled veteran‑owned businesses, particularly in the context of pandemic recovery. She noted that small businesses, especially those owned by disadvantaged groups, had less access to capital and bureaucratic support.
    • Presentation by City Administrator’s Office: Deputy City Administrator Rachel and Project Manager Ann Tan presented an overview of what a disparity study entails. Key points:
      • A disparity study compares business utilization (contracts awarded) to business availability (businesses ready, willing, and able).
      • Typically includes legal review, utilization analysis, availability analysis, qualitative research, and recommendations.
      • Many jurisdictions have conducted such studies; costs range from $400,000 to $1 million, and completion takes one to three years.
      • The City Administrator’s Office already started internal research to prepare for the study and can begin developing the solicitation immediately to save time once funding is available.
    • Committee Discussion:
      • Supervisor Chan asked about immediate changes that could be made without waiting for the study. Deputy City Administrator Rachel cited low‑hanging fruit such as centralizing information and outreach to small businesses.
      • Supervisor Mandelman asked about common themes from other jurisdictions’ findings. Ann Tan mentioned unbundling large contracts, networking, mentoring, and addressing upstream issues like access to capital.
      • Supervisor Mandelman also asked about the one‑to‑three‑year timeline. Ann Tan explained that data harmonization across departments and thorough qualitative research take time. The committee encouraged parallel work on immediate improvements.
      • Chair Preston, Vice Chair Chan, and Supervisor Mandelman all added their names as co‑sponsors of the resolution.

Key Outcomes

  • Vote on Resolution 221209: The committee voted unanimously (3‑0) to recommend the resolution to the full Board of Supervisors. (Vice Chair Chan aye, Member Mandelman aye, Chair Preston aye.)
  • Closed Session (Items 2–12): The committee convened in closed session to discuss 11 settlement and litigation items (settlements ranging from $0 to $1,399,196, including claims by SEIU, Margarita Herrera, Dante King, Michael Oakes, Jo‑Theresa Elias‑Jackson, Cassandra McQuaid, Osterweis Capital Management, AT&T Mobility, A2Z Development USA, AmerisourceBergen, and a tolling agreement for the Sir Francis Drake Hotel).
    • Vote to Forward: The committee voted unanimously to forward items 2–12 with a positive recommendation to the full board.
    • Vote to Not Disclose: The committee voted unanimously (3‑0) not to disclose the closed session discussion.
  • Next Steps: The resolution and the settlement items will appear on the Board of Supervisors’ agenda on January 31, 2023.

Meeting Transcript

Good morning. This meeting will come to order. Welcome to the January 19, 2023 regular meeting of the government audit and oversight committee of the San Francisco Board of Supervisors. I'm Supervisor Dean Preston, chair of the committee, joined by Vice Chair Connie Chan and Supervisor Raphael Mandelman. The committee clerk today is Stephanie Cabrera, and uh want to thank our team at uh SFGov TV for staffing this meeting. Madam Clerk, any announcements? Yes, thank you. The Board of Supervisors and its committees are now convening hybrid meetings that allow in-person attendance and public comment while still providing remote access and public comment via telephone. The board recognizes that equitable public access is essential and will take public comment as follows. First, public comment will be taken on each item on this agenda. Those attending in person will be allowed to speak first. Then we'll take those who are waiting on the telephone line. For those watching either channel 26, 28, 78, or 99 and sfgovtv.org, the public call-in number is streaming across the screen. The number is 415 65501. Again, 415 655 0001. Then enter meeting ID 2491 3720218, then press pound twice. When connected, you will hear the meeting discussions, but you will be muted and in listening mode only. When your item of interest comes up, the public comment is called. Those joining us in person should line up to speak, and those on a telephone should dial star three to also be added to the speaker queue. If you are on your telephone, please remember to turn down your TV and all listening devices you may be using. As already stated, we will take public comment from those attending in person first, and then we will go to our public comment telephone line. Alternatively, you may submit public comment in writing in either of the two ways. Email them to me, the government audit and oversight clerk at Stephanie STE PHANIE. Gabrera, C as in California, A, B as in Bay, R E R A at SFgov.org. If you wish to submit public comment via email, it will also be forwarded to the supervisors and included as part of the official file. You may also send your written comments via U.S. Postal Service to our office in City Hall at one Dr. Carlton B Goodlit Place, room 244, San Francisco, California, 94102. Finally, items acted upon today are expected to appear on the Board of Supervisors' agenda of January 31st, unless otherwise stated. Thank you, Chair Preston. That concludes my announcement. Thank you, Madam Clerk. And please call item one. Item number one is a resolution urging the city administrator's office to conduct a local business enterprises LBE disparity study to analyze disparities in the city and county of San Francisco's contracting to women-owned minority-owned and disabled veteran-owned businesses. Members of the public who wish to provide public comment on this item should call 415-655-0001. When prompted, enter meeting ID 2491 3720218, then press pound twice. If you haven't done so already, please dial star three to line up to speak. The system prompt will indicate that you have raised your hand. Please wait until the system indicates that you have been unmuted and you may begin your comments when we go to public comment. Thank you, Madam Clerk. And this item is sponsored by Supervisor Mirna Melgar, who is here uh joining us today. I want to thank you for your leadership on this. And uh Supervisor Melgard, the floor is yours. Thank you so much, uh Chair Preston, and thank you uh uh supervisors Mandelman and Chan for uh hearing this item as well. Um so this is a resolution uh requesting that the city administrator conduct a disparity study for our LBE program. And what that is is um a report, a measure of uh uh how our LBE program is doing in uh providing opportunities for certain types of businesses. Um, you know, as as compared to their representation in the general contractor population. So for example, if uh 50% of contractors uh in San Francisco are women-owned, but only 20% are participating in the LBE program. We know that we have you know an area of growth in the program. So backing up as to why this is needed at this time.

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