Government Audit and Oversight Committee Regular Meeting: July 20, 2023
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Government Audit and Oversight Committee Regular Meeting: July 20, 2023
The Government Audit and Oversight Committee met on July 20, 2023, at 11:15 AM PDT to consider four agenda items, including a major proposal for a public bank, oversight of public housing management, and two items continued to a future date. The committee also convened in closed session to discuss five litigation settlements. Key actions included accepting a public bank plan and continuing a hearing on property management failures.
Public Comments & Testimony
- Item 1 (Public Bank): Over 15 public speakers expressed strong support for the public bank plan, including representatives from the Council of Community Housing Organizations, San Francisco Public Bank Coalition, Lawyers Committee for Civil Rights, 350 San Francisco, and the San Francisco Tenants Union. Speakers highlighted the need for affordable housing, small business support, and green infrastructure, citing the failures of private banks and the success of the Bank of North Dakota.
- Item 2 (Eugene Burger Management): Residents of Sunnydale and Potrero Hill testified about poor conditions: excessive trash, rodent infestations, unresponsive maintenance, and safety concerns. Speakers called for accountability and resident hiring. One resident noted that the trash situation is “the final black eye” after decades of neglect.
Discussion Items
- Item 1: Hearing on the Reinvestment Working Group’s Final Governance Plan, Business Plan, and Viability Study for a San Francisco Municipal Financial Corporation (MFC) and a San Francisco Public Bank
- Chair Preston opened with thanks to the working group, LAFCO, consultants, and advocates. The plan proposes a two-phase approach: first a Municipal Financial Corporation (MFC) for lending, then a full public bank after proving concept and obtaining FDIC approval.
- Presenters detailed the governance structure, community engagement findings, and financial projections. The MFC would start with $20 million capital, growing to $90 million in assets by year 3, with $60 million in loans. The public bank would have $319 million in assets and $247 million in loans by year 8.
- Federal funds of $27 billion (including $6 billion for lending entities) are available, with up to $10 million per application. The Bank of North Dakota was cited as a model: over $10 billion in assets, $200 million annual profit, and twice the PPP loans per capita as California.
- Community engagement revealed challenges with outdated underwriting, lack of small loans under $150,000, and language barriers.
- Item 2: Hearing on SFHA’s Report of Quality of Services Provided by Eugene Burger Management Corp. at Sunnydale and Potrero Hill Hope SF Sites
- Supervisor Walton, sponsor, described disturbing reports of neglect. SFHA Executive Director Dr. Letaju outlined the transition from HUD-mandated privatization, staffing shortages, and efforts to improve. EBMC reported hiring 16 staff per site, auditing trash bins, and towing 75 abandoned vehicles (35 more in process). Enhanced trash services cost $1 million.
- Bridge Housing and Mercy Housing described their roles in redevelopment and resident services, acknowledging ongoing challenges. Mercy Housing noted that conditions remain unacceptable, with work orders not timely and trash issues.
- Committee members questioned EBMC’s performance, contract metrics, and resident hiring. Supervisor Walton criticized EBMC for presenting a photo of trash cleanup as a positive, calling it indicative of a disconnect. He also referenced a fatal fire at a Potrero Hill unit.
- Item 3: Strategies for Fire Prevention in Residential Apartment Buildings – Continued to the call of the chair because the Fire Marshal was unavailable.
- Item 4: Audit of the Public Utilities Commission’s Water and Wastewater Enterprises, Rate Setting and Oversight – Continued to the call of the chair at the sponsor’s request. Public commenters urged a broader audit of the PUC’s drought planning and water management.
Key Outcomes
- Item 1: The committee voted unanimously (3-0) to prepare a resolution accepting the Reinvestment Working Group’s plans for introduction to the full Board of Supervisors.
- Item 2: The committee voted unanimously (3-0) to continue the hearing to the call of the chair. Supervisor Walton requested quarterly status reports from SFHA and developers.
- Item 3: Continued to the call of the chair (3-0).
- Item 4: Continued to the call of the chair (3-0).
- Closed Session (Items 5-9): The committee voted unanimously (3-0) to recommend five settlement ordinances and resolutions to the full Board, and to keep the closed session deliberations confidential.
Meeting Transcript
Clerk, do we have any announcements? Yes, thank you. The Board of Supervisors and its committees are 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 we'll be taking 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. When your item of interest comes up and public comment is called, those joining us in person should line up to speak, and those on the telephone should dial star three to be added to the speaker queue. If you are on your telephone, please remember to turn down your TV and all listening devices that you may be using. Alternatively, you may submit written public comment by email to the government audit and oversight clerk, might me, Stephanie Cabrera at Stephanie STE PHANIE. Cabrera, C as in California, A Biesm Bay, R E R A at SFgov.org. 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. If you submit public comment in writing, it will be forwarded to the supervisors and included as part of the official file. Finally, items acted upon today are expected to appear on the Board of Supervisors Agenda of September 5th, 2023, unless otherwise stated. Thank you. Thank you, uh Madam Clerk. And um let's go ahead and uh well actually before we call the first item. Uh I'd like to make a motion to excuse Supervisor Chan. Please call the role on that. And on the motion takes to use Supervisor Chan, Vice Chair Stephanie. Stephanie I, Member Mandelman, Mendelman I, Chair Preston, Preston I, you have three eyes. Thank you. That motion passes, and uh please call agenda item one. Item number one is a hearing to consider the reinvestment working groups, final governance plan, business plan, and viability study for San Francisco Municipal Financial Corporation, and final governance plan, business plan and viability study for San Francisco Public Bank. And recommend that that the Board of Supervisors accept the RWG's proposed plan and requesting local agency formation commission to report. As noted on the agenda, the chair may entertain a motion to prepare a motion in committee to accept the proposed subject plan. Members of the public who wish to provide public comment on this item and are viewing remotely should call the public call-in number scrolling across your screen and enter the meeting ID when prompted. If you are already on hold, please dial star three to be added to the speaker line. Thank you. Um and uh let me uh before we hear from presenters, I I want to say a few words about this. Um this has been quite a road to get here. Um, and uh very excited um that the reinvestment working group has completed its work, that we are here today with the long-awaited much discussed and analyzed um plan for uh public banking in San Francisco. Um so I want to say say some thanks to some folks. Um and uh before we get started and maybe uh give a little context and then we'll hear from presenters um and and uh have a discussion about some of the details. Um so let me start by thanking the reinvestment working group members led by Chair Kristen Evans, who is here at the mic. Welcome. Uh Vice Chair Fernando Marti Um and members of the reinvestment working group, uh Sylvia Chi, Michelle Pierce, Rafael Morales, uh Jennifer Finger, Elizabeth Dwyer, uh Anna Van Degna from the controller's office, and Amanda Freed uh from the Treasurer's Office. Um I I cannot overstate uh the amount of time and energy and brain power that these folks have dedicated to this task over the last 18 months to create the governance plan, business plan and and uh viability study around uh San Francisco Municipal Finance Corporation, um otherwise known as an MFC and a San Francisco public bank, and we'll hear more details on that soon. Um but the thanks go beyond the reinvestment working group members, um, and I want to specifically acknowledge um the crucial role uh that LAFCO has played um in developing these plans and with us today uh from LAFCO, Jeremy Pollock, executive officer of LAFCO, and Khalid Samurai policy analyst uh to the reinvestment working group. Thank you both for your tireless work on that. Um the San Francisco Public Bank Coalition, uh, who really has led efforts here in San Francisco for uh to get us on track, not just to change state law and work with the California Banking uh public banking coalition, uh, but also to move things forward locally. Um the they're uh have really been an incredible uh resource to the city and advocacy uh group uh to get this moving. Um the reinvestment group working group, and uh they may acknowledge folks themselves, um, but I I want to acknowledge the exemplary work of uh HRA advisors that that provided a lot of the technical expertise uh to the working group, particularly uh Yacomo Bagarella and Andrea Batista Schlesinger, um the consultants who've been who've been working on this and also Gary Finley of the Finley Group and uh Susanna uh Razo with uh Contigo Communications. Um these folks brought a lot of expertise to the table in really looking at how other jurisdictions around the world have successfully launched public banks and how we could do it here in San Francisco, and um also want to acknowledge the clerk's office, particularly Angela Cavillo, um uh Alisa Semera and uh Stephanie uh Cabrera for all of their support along the way. And and last but not least, I just want to acknowledge that this you know, politicians come and go, and sometimes we um hand the baton from one to the next, and that is certainly the case with a long-term project like creating a public bank. So I want to acknowledge uh former supervisor John Avalos, who really got things rolling in City Hall around public banking, um, followed by former supervisor Sandy Fuhr, uh, who worked tirelessly on this with the public bank coalition, uh, and also our current city attorney, David Chu, who, when he was wearing a different hat in the California Assembly, uh was actually the lead author on the legislation uh which paved this exact path for creating under state law a public bank, uh, the path that we are now on. Um add to that list Ben Rosenfield at the controller's office uh for all his assistance, um, and also specifically want to recognize our treasurer, Jose Cisneros, who's been an essential partner in thinking through how we can do this, not just through uh his staff's participation on the reinvestment working group, uh, but through his direct engagement with our office. Um, and there is obviously uh when if and when we have a public bank, uh, the treasurer of City and County of San Francisco is absolutely essential to uh to to implementing that work and making this a success.
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