Lavish Dinning on the Public Dime
SFPUC’s Posh Tours, Parking Perks and Executive Churn
Government agencies tend to become loyal to themselves rather than to their proclaimed mission or the taxpaying public. Hence, we rely on internal whistleblowers and external watchdogs to expose organizational deviance. The Westside Observer has seen a surge in tips since the City’s corruption scandal detonated in 2020.
Pursuant to a tip about lavish spending on SFPUC tours, we obtained records about an expansive “business tour” in May 2019. As we previously reported, many such tours and retreats are scheduled every year, so the costs mount. Among the 15 such tours in 2019, a “General Manager Convening Group” was arranged for May 1st and 2nd by Juliet Ellis, SFPUC’s then-Assistant General Manager for External Affairs. Harlan Kelly was then General Manager.
The itinerary covered SFPUC headquarters, Moccasin Reservoir and Powerhouse, Hetch Hetchy Recreational Area, O’Shaughnessy Dam, City Hall, and a banquet at the Old Skool Café. Among the 23 guests (21 attended) were SFPUC Commissioner Sophie Maxwell, former Planning Commissioner Myrna Melgar (now D-7 Supervisor) and SFPUC executives Harlan Kelly, Juliet Ellis, Barbara Hale, Steve Ritchie, Emily Lam, David Gray, and Ronnie Versher. The other 12 guests represented non-profits, government agencies, foundations and consulting firms.
Records show that this tour cost the SFPUC $10,123, about $424/person. It included $2,603 for bus fare, $800 for lodging, $1,752 for 3 catered meals, $351 for a “specialty lunch,” plus a whopping $4,617 for the Old Skool Café dinner. The SFPUC explained; “Please note that the SFPUC owns the facilities at Hetch Hetchy and utilizes them for tours and businesses purposes, such as for this tour. The SFPUC does not charge the attendees of its tours for use of the accommodations and meals.” So, these provisions were gifts – subsidized by taxpayers.
The SFPUC routinely provides a breakdown of the costs of the goods and services for tour guests who are required to disclose the value of gifts received. Many government officials are required to file an annual Form 700 Statement of Economic Interests, with the Ethics Commission and the state Fair Political Practices Commission (FPPC). These income disclosures serve to identify and deter potential conflicts of interest, pay-to-play deals and bribes. For this tour, the value of the freebies were compiled in an SFPUC file titled; “FPPC Form 700 Calculation.” When given this data, each guest knows how much to report. But something was omitted – the lavish cost of the banquet at the Old Skool Café.
Shindig at the Old Skool Café
Located in the Bayview, the Old Skool Café is a laudably creative and altruistic non-profit restaurant. It hires and trains at-risk, disadvantaged and formerly incarcerated youth to cook and serve American comfort food. Some of the menu is derived from their own families’ recipes. These young people also manage the premises and provide musical entertainment to complete the ambiance of a 1940s supper club. The Old Skool Café’s program has drastically reduced recidivism, reportedly keeping 90% of its employees out of trouble. Also, the Café is one of the beneficiaries of SFPUC’s controversial Community Benefits Program that “invites” SFPUC contractors to donate 1% or so of their contract awards to preferred community charities and nonprofits – a pay-to-play hazard.
For the Old Skool Café shindig, the SFPUC splurged on a “full restaurant buyout,” for its 25-member tour group. Although, the SFPUC informed the Westside Observer that: “…we were unable to locate a record with the names of the guests that attended the dinner at Old Skool Café,” they were the same folks who took the tour, give or take.
Invoices show that the SFPUC was billed $3,500 for food, $150 for a jazz trio, plus an 18% service charge and 8.5% tax. No discount noted, except for waiving an “admin fee,” thereby saving $146. The grand total was $4,617 for 25 guests or $185/person. That was pricey. Currently, the same 3-course meal plus beverage, including 18% service charge plus tax, would cost between $34 and $58. So, 25 people could be charged $850 for the least expensive menu options, up to $1,450 for the most costly, averaging $1,150. But the Café’s bill tripled that amount. That’s because the SFPUC reserved the entire 65-seat restaurant rather than seats for 25 guests.
Gift Disclosures and Omissions
...income disclosures serve to identify and deter potential conflicts of interest, pay-to-play deals and bribes ... But something was omitted – the lavish cost of the banquet at the Old Skool Café.”
Intriguingly – the cost of the Old Skool banquet was excluded from SFPUC’s Form 700 gift calculations for the tour – even though that dinner was on the tour itinerary. The reason for this omission is unclear. Perhaps disclosing the steep cost of this banquet to the guests would have drawn queries. In 2019, government officials were prohibited from accepting more than $500 in gifts from a single source. The whole tour bestowed $424/person, close to the forbidden limit.
Omitting the $185/person Old Skool banquet from SFPUC’s Form 700 calculations made it likely that some guests would also omit it from their Form 700 gift disclosures. For example, SFPUC Commissioner Sophie Maxwell’s Form 700, viewed on the SF Ethics Commission website, shows no gifts for 2019. Similarly, Myrna Melgar, then-President of the Planning Commission, reported no gifts for 2019.
SFPUC executives get tremendous parking discounts, not available to other employees ... 60 parking spaces for its fleet at the Civic Center Garage ... SFPUC paid $6,274,166 for a 75 year lease.”
Although a business tour could be considered “informational material” rather than a gift, the cost of any associated meals and lodging, and sometimes transportation are reportable. Since this tour was sponsored by a City agency, the attendees were not getting a prohibited gift from a restricted non-City entity. Importantly however, the City’s Conflict of Interest Code specifies that Commissioners and department heads are in “Disclosure Category 1” and that “Persons in this category shall disclose income (including gifts) from any source…” Note the “any source.”
A bountiful tour provided by the SFPUC General Manager could influence decisions by a Commissioner who oversees the SFPUC, or by a Planning Commissioner who makes decisions relevant to the SFPUC. As the Westside Observer recently reported, the Ethics Commission has identified many lapses in gift disclosures. This may be another one.
Another tipster reports that SFPUC executives get tremendous parking discounts, not available to other employees. In January 2011, the SFPUC and the Rec & Park Department signed a Memorandum of Understanding whereby the PUC would get 60 parking spaces for its fleet at the Civic Center Garage. Rec & Parks owns the garage and it’s administered by the SFMTA. SFPUC paid $6,274,166 for a 75 year lease.
Some of these parking slots are allotted to SFPUC executives’ personal vehicles. Nowadays, the monthly parking fees are $91/month for SFPUC brass, while a regular monthly pass costs $300/month. The discrepancy was explained in a SFPUC file titled “Perquisite-Parking-Packet.” Parking fees for SFPUC senior staff equal “The price of a Municipal Railway monthly pass plus $10.00” in accordance with Administrative Code Section 4.24. A monthly Muni Clipper pass costs $81. In sum, the SFPUC subsidizes parking costs for its most highly-paid employees.
Such perks are common for top executives, but regular employees wonder about “equity.” They point to the Mayor’s Office Policy Instructions & Controller’s Technical Instructions for the 2021 Budget. Page 26 recommends that fees be “analyzed through an equity model.” For example, does the fee “impact some people harder than others” or “exacerbate existing racial or socioeconomic disparities” and “is it an equitable means to achieve the policy goal?”
Herrera Era Shake-Up
When new directors are installed in troubled City departments, they often bring in their own team to replace the old regime. That’s happening now that former City Attorney Dennis Herrera runs the SFPUC. He brought in Ronald Flynn, his former Chief Deputy City Attorney, to serve as Chief of Staff. John Coté, the City Attorney’s former Communications Director, now serves in that role at the SFPUC. Brittany Feitelberg, formerly the City Attorney’s Director of Executive Affairs, is now a Special Assistant at the SFPUC. Tyrone Jue, the Mayor’s Senior Advisor on the Environment, is now Herrera’s Associate Deputy General Manager.
On October 5th, SFPUC Chief Financial Officer Eric Sandler announced he was retiring “at the end of this calendar year.” On October 29th, the axe fell on the agency’s Human Resources Division; “Chief People Person,” Justine Hinderliter, and her deputy, Derek Kim, both left suddenly.
Interestingly, as the Westside Observer reported this May, Eric Sandler and Justine Hinderliter had decamped to Michigan and Minnesota respectively, working remotely from out of state. Their sojourns were condemned by rank and file employees who were stuck in the City with extra tasks as Disaster Service Workers. More churn is expected as more SFPUC job openings are posted. Besides replacing executives, Herrera could install an internal Whistleblower Hotline to investigate employee complaints now flooding local media outlets.
Dr. Derek Kerr is a San Francisco investigative reporter for the Westside Observer Contact: email@example.com