Secrets of SFPUC’s Community Benefits Program
Confidential sources sent the Westside Observer a long-sought and long-buried document related to the SFPUC’s Community Benefits Program. Shown above and available here, it’s marked “Sensitive” and “Confidential JV Board of Control Meeting Minutes – for Distribution to JV Board Members Only.” The remaining 2 pages are completely redacted. The mystery is why such records are secret.
The 2/26/19 document summarizes a meeting between officials running SFPUC’s Community Benefits Program and officers from AECOM/Parsons. The latter is a joint venture of 2 major infrastructure consulting firms with a $150 million contract to manage the City’s $6.9 billion Sewer System Improvement Program from 2011 through 2026. This “JV” or Joint Venture Board meets with SFPUC brass at SFPUC headquarters on Golden Gate Avenue - essentially an SFPUC meeting.
Dark Venture Board Meetings
Yet, when SFPUC watchdogs, the SF Labor Council and the Marina Times requested these meeting records, they were stone-walled, told that the SFPUC did not have them, or that AECOM/Parsons said “no.” ”
Yet, when SFPUC watchdogs, the SF Labor Council and the Marina Times requested these meeting records, they were stone-walled, told that the SFPUC did not have them, or that AECOM/Parsons said “no.” The Sunshine Ordinance Task Force was notified in February 2019, but no formal complaint or hearing materialized. Representatives from the Building and Construction Trades Council approached Supervisor Gordon Mar, alleging that SFPUC’s Community Benefit Programs “use construction industry workforce training agendas…for the primary purpose of administering ‘slush-funds’ via ‘pay-to-play’ contract bidding arrangements.” After Mar sent a Letter of Inquiry, SFPUC’s Acting General Manager, Michael Carlin, asked AECOM/Parsons for the minutes of one 2019 meeting. The just-released, heavily-redacted copy has folks wondering what’s being concealed?
Encouraging Community Benefit Plans
When the SFPUC requests bids for contracts worth $5 million or more, applicants are encouraged to submit a Community Benefits Plan along with the usual technical and financial data. That’s because SFPUC’s Community Benefits Policy adopts a “triple bottom line,” balancing economic, environmental, and social equity goals. Submitting such plans show that bidders intend to be “good neighbors” to the communities impacted by their proposed construction projects. For example, contractors can promise to give money to community non-profits, donate volunteer hours to schools, support pre-apprenticeship training programs, or furnish technical assistance to small businesses. For AECOM/Parsons, its $150 million contract included a $1.5 million donation toward community benefits.
Community Benefit Plans are worth 5% of the points in the SFPUC’s scoring system for evaluating bids. Interestingly, the SFPUC uses 2 separate panels to assess bids; technical experts award up to 85 points for the technical presentation while “social impact experts” award up to 5 points for the good neighbor proposals. The remaining 10 points relate to cost controls assessed by top executives.
This system was described at the SFPUC meeting of 11/10/20 (Item 8 at 1:52). Former SFPUC General Manager, Harlan Kelly, opened with an impassioned defense of the Community Benefits Program. Program Manager Tracy Zhu reported amassing $35 million in pledges from 84 contractors who were “invited” to provide community give-backs. Ivy Fine, Director of the Project Administration Bureau, emphasized that offering community benefits is “optional.” However, bidders who don’t offer them lose 5 points.
Fine highlighted “checks and balances to prevent undue influence.” For example, General Managers do not sit on Community Benefit review panels and “no contributions go to the SFPUC, its employees, or other City departments.” Further; “Proposers independently find and solicit the non-profit organizations and schools that they will utilize to deliver their social impact commitment.” Plus, proposers “independently decide their…internal systems to track, report and hold themselves accountable.” Uh…maybe.
SFPUC Influences Community Benefit Plans
SFPUC’s detailed Community Benefits Program Policy (page 10) shows that it exercises considerable control over the proposers’ and contractors’ community benefit pledges. The SFPUC’s External Affairs Division, formerly led by Juliet Ellis, now under Masood Ordikhani, determines the community benefits goals, submits contract language on community benefits, participates in pre-bid discussions with proposers, selects the community benefit review panel, “orients” the panelists, reviews the proposals, “finalizes” the community benefit language in the contract, then meets with the successful contractor to “discuss” its community benefits plan, timeline and reporting. Mandated for AECOM/Parsons, were quarterly reports, quarterly in-person meetings with Community Benefit overseers, plus “stand-alone annual reports.” The Westside Observer requested copies of these reports and awaits SFPUC’s response.
Further deriding the professed “independence” of involved contractors is an 11/28/12 memo from Juliet Ellis to AECOM/Parsons, cc’d to Harlan Kelly. Titled “Scope of Services for Community Benefit Commitments,” it mandates; “AECOM/Parsons JV shall develop the Community Benefits Plan and Timeline in collaboration with the Assistant General Manager for External Affairs (then Juliet Ellis) to ensure that all of the deliverables…are aligned with SFPUC’s priorities and broader Agency-wide community benefits strategy.” Some SFPUC insiders believe this exacting process ensures profits for politically-connected non-profits.
Art of the Deal or Pay-to-Play
Misgivings surround the way community beneficiaries are chosen and how contractors recoup their donation expenses or get rewarded for them.
SFPUC emails obtained by the Westside Observer show that Juliet Ellis and her subordinates prepared a 15-minute presentation for the AECOM/Parsons Joint Venture Board. Their pitch endorsed the SF Housing Development Corporation, a Bayview non-profit that works to prevent foreclosures. SFPUC’s then Community Benefits Director, David Gray and its Manager, Tracy Zhu “answered questions” about this intended beneficiary. “After discussion” the secretive Joint Venture Board “approved” a $100,000 donation. There’s more.
In 2015, AECOM/Parsons surpassed its $1.5 million community benefit pact by adding another $125,000. Of that amount, $50,000 went to the Willie L. Brown Middle School. Perhaps this 8.3% supplement reflected AECOM’s generous embrace of social equity. If so, why was the deal carved into a contract amendment as; “AECOM shall increase AECOM’s current Community Benefit obligations in the minimum amount of $125,000…in addition to the prior commitment.” The “shall” and the $125,000 stipulation suggests that the add-on was extracted rather than gifted. What did AECOM/Parsons get in return?
A clue appears in the role-blurring between contractors and SFPUC Community Benefit officials. This phenomenon is embodied in Julie Labonte, a former SFPUC Manager who became a Senior VP with AECOM. She was hired as “Program Advisor,” serving as liaison between SFPUC and AECOM/Parsons. Labonte had an SFPUC office and email - plus an AECOM email address. Her Linked-In profile extolled how her SFPUC affiliation “guided contract pursuits that resulted in…wins worth nearly $70 million in consulting fees.” In 2018, AECOM/Parsons executives asked SFPUC to boost her billing rate to $318/hour. The SFPUC harbors many such “dual representatives.” What do taxpayers “win” in these cozy collaborations?
Nothing here prevents SFPUC’s favored community groups from reaping the spoils of community benefit arrangements. And nothing prevents contractors from compensating themselves, or being recompensed for going along. Indeed, with all the mutual back-scratching recently exposed within City agencies, it’s unlikely that successful contractors operate “independently” or altruistically.
Deeper Layers of Influence
SFPUC’s Community Benefits strategy and priorities emerge from community engagements. For example, records indicate that SFPUC’s former Community Benefits chief, David Gray, consults weekly with R. Dwayne Jones, founder of RDJ Enterprises and a horde of Bayview entities. Jones’ non-profit Southeast Consortium for Equitable Partnerships received $612,725 from SFPUC’s Community Benefit Program between July 2017 and January 2020. In turn, Jones furnished “administrative support” and “community engagement” staff.
Jones’ newsletters assert that he co-created SFPUC’s 2011 Community Benefits Policy. Previously, he had directed Mayor Newsom’s well-funded but “unfocused” and opaque Communities of Opportunity project. Subsequently, he was implicated in alleged bid-rigging at the SF Housing Authority. Yet, Juliet Ellis praised Jones as her “closest partner in the Southeast community” and a “point of pride for the SFPUC.” As the Marina Times demonstrated, this relationship influenced contractors and Joint Venture Board deliberations.
Will the Controller’s Audit Drill for Collusion?
As the Westside Observer previously reported, the Controller’s Office has unhurriedly assigned an outside firm to audit SFPUC’s Community Benefits Program. Deputy Controller Todd Rydstrom should recuse himself from supervising this audit since he formerly served as SFPUC’s Chief Financial Officer. Unfortunately, in a 11/17/20 email titled; “Community Benefits Audit – Researchable Questions” the Controller’s lead auditor, Mark de la Rosa, thanks his staff for compiling audit questions and states; “ I’ll add to my 1:1 agenda with TLR (Todd L. Rydstrom) today and loop back on next steps.” So Rydstrom kept a conflicted finger in the audit.
Other fingers inserted themselves. As the Controller’s Office was organizing the audit, SFPUC boss Harlan Kelly pre-emptively requested that same audit. That’s one way to control an audit’s trajectory. Similarly, Juliet Ellis, who oversaw the Community Benefits Program, chimed in to limit the audit’s “confusing” scope. That prompted Controller Ben Rosenfield to “discuss” with Rydstrom.
Could Rosenfield’s oversight eliminate Rydstrom’s potential conflict of interests? Maybe not. Records show that in 2018 alone, Harlan Kelly invited Rosenfield and family to at least 3 exclusive events; the “Black American History Gala,” whose Treasurer was Dwayne Jones, at the SF Marriott Marquis, then a “leisurely weekend at Hetchy,” assuring that “Costs are very minimal,” and a screening of the “Black Panther” movie with a feast at the Academy of Sciences. The Rosenfields reserved 4 seats for this “awesome” movie offer. No gifts are reported in Rosenfield’s 2018 Form-700.
Dr. Derek Kerr is a San Francisco investigative reporter for the Westside Observer Contact: email@example.com
April 21, 2021