>> this is being held by teleconference. the local emergency dated february 25, 2020. before proceeding i would like to ask the staff member acting as moderator to explain procedures for our remote

meeting today. >> the minutes of this meeting reflect due to covid-19 health emergency the meeting rooms of city hall are closed. commission members and staff will participate remotely today. this is taken pursuant to local, state and federal orders and directives. commission members will attend through video and participate as if they were physically present. please know today's meeting is live cast on sfgovtv apstreamed live online. once again sfgovtv.org/ethics live. oral comment is available on each item on the agenda. each member of the public is allowed three minutes to speak. you can call 415-655-0001.

access code (187)066-2559. followed by the pound sign, then press pound to join as attendee. you will hear a beep when you are connected to the meeting. you will be automatically muted. when your item comes up dial star 3 to be added to the public comment line. you will hear you have raised your hand to ask a question. wait until the host calls on you. the line will be silent as you wait to speak. ensure you are in a quiet location before you speak, mute the sound of television, radio

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in writing and will be shared after the meeting and included as part of the official meeting file. written comments should be sent to ethics at commission as sfgovtv. written comments should be sent to ethics at commission at sfgovtv. thank you, madam chair. >> thank you, mr. moderator. i would like to call the meeting to order. i will ask you to please proceed with item 1. commission roll call. >> chair. >> present. >> commissioner bell.

>> present. >> commissioner bell is not present at the moment. we expect him to join us today. >> commissioner bush. >> present. >> commissioner chu. >> present. >> vice chair. vice chair lee. >> present. >> thank you. madam chair with four members present you have a quorum. >> thank you very much. i just want to say while we are resuming commission meetings in remote format, i understand that city hall is partially re-opened for some basic city functions, but they will we having board of supervisors meetings in chambers

at least the opportunity to appear in person will commence sometime, i believe, in june. no word about other boards and commissions. we will keep you posted as the city proceeds with its re-opening. in the meantime, i want to give a friendly reminder to fellow commissioners and participants. we request you mute your microphone when not speaking to avoid audio feedback. agenda item 2 on matters appearing or not on the agenda. members of the public dial star 3 to be added to the comment line. please proceed with public comment. >> thank you, madam chair. the ethics commission is receiving public comment on item 2. each member of the public has

three minutes to provide public comment. now is the time to speak. if you have not already, please press star 3. it is important to press star 3 only once to enter the queue. pressing again will move you back to listening mode. when you are in the queue and standing by, the system will prompt you when it is your turn to speak. it is important to call from a quiet location. address to the commission as a whole, not individual members. we are checking for callers in the queue. >> we are currently on agenda item 2. public comment on natures appearing or not appearing on the agenda. you have three minutes and six minutes with an interpreter. a bell will go off at 30 seconds

remaining. press star 3 to be added to the queue. wait until the system indicated you have been unmuted. stand by. madam chair, there are no callers in the queue. >> thank you. with that public comment on agenda item 21 closed. i would like to call item 3. consent calendar. draft minutes of the commission's april 9, 2021

regular meeting. are there any comments from commissioners on the draft minutes? seeing none, i need to get my screen open, i am going to ask you to call public comment on the consent items, mr. moderator. >> thank you, madam chair. the ethics commission is receiving public comment on consent item 3. each member of the public has three minutes. you will hear a bell go off at 30 seconds remaining. if you are listening, now is the time to speak. if you have not already, press star 3. it is important that you press star 3 only once. pressing again will move you back to listening mode. when you are in the queue standing by the system will prompt you to speak. call from a quiet location.

address comments to the commission as a whole and not to individual members. we are checking for callers in the queue. press star 3 to be added to the queue. if you have just joined us we are public comment on consent item 3. draft minutes of the commission's april 9, 2021 regular meeting. press star to be added to the public comment queue. stand by. >> there are no caller in the

queue. >> agenda item 3 is closed. please call the roll. >> motion is made. second. >> motion is made and seconded. commissioner bush. >> yes. >> commissioner chu. >> aye. >> vice chair lee. >> aye. >> chair. >> aye. >> that is four in the affirmative. the motion is approved unanimously. >> thank you, commissioners. i am going to call agenda item 4. presentation by controller's office on the april 14, 2021 report. preliminary assessment, refuse rate-setting process lacks transparency and timely safeguards and discussion and possible action related to report findings and recommendations. over to executive director and

mark from the controller's office. please proceed. >> thank you, and good morning. this is on the agenda as we have with prior reports from the controller's office the integrity reports the office is issuing. the latest after the april 14th meeting. we are pleased to have invited mark and todd to provide an overview. i will turn it over to mark and team. we appreciate your time with us this morning. thank you. >> thank you very much. let me first pull up my presentation.

good morning, commissioners. mark de la rosa acting director of audits. joined by our lead audit manager and deputy controller. we will be presenting to you some highlights of the report that we issued about a month ago on the refuse rate setting process. as you know this is the fifth that we have started in the controller's office as part of the internal control reviews surrounding the investigations. just by way of very quick background. we have covered some of this before, but for context, we started our series of public integrity reports in february of 2020. with the goal of really providing recommendations to

addressing internal control weaknesses, improve transparency and safeguard public fundings. in conjunction with our efforts, the city tore investigations continue as they focus on the various facets of the cases, particularly surrounding current and former city employees and contractors related to the f.b.i. complaints. this report is preliminary as we have issued in the past. really focuses on internal controls on the oversight and approval of the refuse collection and disposal rate setting process. by refuse we refer to waste, compost and recyclables. we provide our report as preliminary and offered for public comment. we may revise certain elements

as we continue our work in the next few months. before we move forward, let me just give one quick note on the related march 4th city attorney announcements of the more than $100 million in refuse rate settlement with recology which we supported through analysis. this provides the ratepayer refunds based on errors related to impound accounts and zero waste initiative revenues and the rate application that was used to set the rates july 2017 through june 2021. update as of this tuesday, may 11th, the board of supervisors has approved the settlement amount of $94.6 million for the ratepayer restitution and additional $7 million in civil penalties.

just quick recap of the various elements of the fbi reports. recology, as you already know, is privately held waste management company to provide refuse services to both residential and commercial customer in the city and county of san francisco. they operate the through three entities, recology san francisco, scavenger and golden gate. the government and community relations manager from february 2012 until june 2020 serving as liaison to elects officials and city departments and community organizations. according to the fbi affidavit issued in november 2020 he was tasked with keeping mr. nuru happy and played a role in if 2017 rate application to increase residential refuse rates. he was praised for minimizing

negative press about the increase. it alleged over six years he bribed mr. nuru and concealed as charitable donations to nonprofit organizations. they provided benefits to mr. nuru and his family and public works in excess of $1 million through nonprofit or directly. on slide four. just another key background is we wanted to emphasize that the recology contract does not include currently as it stands on the agreement does not include service agreements for term limits or ever engage understand the processes for these services. current city agreements with recology was approved by the san francisco voters in 1932. in this ordinance it created a

regulatory scheme and approved 97 permits with no expiration for residential refuse collection in the city. what this has done recology acquired all 97 permits causing it to be the san francisco only refuse collector on the residential side. by way of background, the next few slides will give you an overview of the process that the rate setting goes through every few years. this slide no. 5 really lists all of the different stakeholders in the rate setting process. director of public works is there to ensure there is a fair process, or that was the role that the director plays. also the rate board is comprised of representatives from city administrator, controller and sf

public utilities commission to oversee appeals. the department of environment is part of the stakeholder list to ensure that the city reach the zero waste goals and works for recology programs. there is the ratepayer advocate appointed by the public works director to provide outreach and helps the public convey comments during proceeding. there is the public that can provide comments during proceedings and file formal objections to the rate proposals set forth. the next couple of slides gives you the process that the 2017 rate process went through from the requests from recology to submit an application for the request for changes to the various public hearings that it went through in march and april to the deliberations on the rate

board. during the june months of 2017, the rate board issued the resolution to affirm the director's report. the july 1st date of the refuse rate coming into effect. this is providing additional background how the rate setting goes through. then the various contractors in 2017. i will turn it over to kate to go through the findings and recommendations as well as provide any background on the various conclusions we make. >> thank you, mark. our first finding is around the 1932 refuse collection and

disposal initiative ordinance that led to the arrangement with recology. we recommend for the city to consider whether this provides optimal benefits to ratepayers or whether or not another model should be used. currently it allows recology to hold all residential refuse permits and not compete for the service. to know any changes to the ordinance requires voter approval. our next finding is around the director's role in the rate setting process. mr. nuru had significant influence. it was issued by public works and the director is the only one in the adjustment process whose determination is time in absence of a decision. the weight of the director's determination is substantial. proposition b in 2020 may

transfer to the new director of the department of sanitation and streets. this department will be over seen by five person commission. although the rate board will oversee the rate setting process. the city should codify the roles of the commission director and staff of the department of sanitation and streets and related contractors including the ratepayer advocate consultants and auditors. we recommend to the mayor and board of supervisors to consider whether additional changes to the rate setting process where warranted such as assigning special and financial oversight to a department further removed from the refuse collector. our next finding is the ratepayer advocate if it is fulfilled as it should be. the ratepayer is a public outreach coordinator rather than

advocate which may conflict with the report. as such we recommend the city review the role of the ratepayer advocate and if necessary direct the role be changed in the future so that the role emphasizes advocacy more clearly. our next two slides get into the reason for the 2017 rate increase error that led to the over charges to ratepayers in the years after. the revenue paid for the zero waste incentive and impound accounts were excluded from the application. this resulted in rate increase of 14% when the actual revenues including zero waste and impound supported increase of about 7%. the error was met missed by review ors. to prevent in the future the

city should assess if the operating ratio or another method should be used requiring the follows. submit audited financial statements quarterly and annual reports, a reconciliation, quarterly and annual rate reports should show issuance based and post to the website and filed in a timely manner with the rate board. cost of living should be analyzed based on actual results over the preceding four years. when an error is identified report to the refuse company and file a report with the rate board. lastly, the refuse company should ensure independent rate analysis performed studying comparable jurisdictions to support reasonableness of the proposed rate adjustment and considered in each rate-setting

process. i will pass it back to mark. >> thank you, kate. that was a quick overview of the report that we issued a month ago. we listing as the next steps listing all of the completed reports we have issued. to what size we have a few -- to emphasize a few continue to be in the pipeline for our issuance in the next few months. we have one on the city-wide ethics reporting that is upcoming. department building inspection and one regarding the san francisco public utilities commission. with that we are happy to answer any questions that you have. >> thank you very much for your work on this. i am waiting to see if any other commissioners have a question before i pose mine.

commissioner chu if you want to proceed. >> thank you, chair ambrose. thank you and welcome for the detailed report and summary. in effect, when i read this and listening to you, it seems like the recology functions as a monopoly on residential waste removal services with the city because they have a perpetual, all 97 licenses and permits without expiration date, and the contracting process is such that there is no process. the rates are set by the department head. this lends itself to corruption as we have been experiencing.

the recommendations that you have made, i think, are sound and much needed. beyond changing the process of the rate setting and requiring more transparency and disclosure with regard to erroneous information submitted to the department, what in terms of structurally changing this and creating a competitive bidding process, creating more competition for the services. would that require voter approval? this whole thing needs to be overhauled for the 21st century making transparency, accuracy

and safeguarding against corruption triple goals for the process instead of the current system as it exists? >> yes. i will start, kate. please follow. through the chair, commissioner chu, certainly i pointed out in the report any changes to the refuse ordinance would require voter approval mandates. we also alluded in our report that we provided an example from the 2012 proposition a that went before the voters that was not passed. we reported on the various elements of what that prop a proposed at the time to provide competitive solicitation,

splitting the residential refuse collection contracting process and allowing the city to use operating ratios. certain elements we introduced in the report that referenced the previous effort. yes, to answer your question, it would require. >> second question relates to maybe a culture question at the department of public works. in your work in talking with people, and this may be hard to answer, but was it your sense that the people with whom you interviewed, was this a surprise to them that, oh, the information was inaccurate in 2017 and, you know, it was discovered but it wasn't disclosed because, you know,

sitting here three or four years later, it looks like how could you not know about this? why was it not disclosed? why was it not brought to anybody's attention? was that laziness? culture of silence, accomplice city? were they trying to cover this up? i don't know if you have a sense of that. i want a better understanding, if possible, what were the enabling factors for this rate error to go undetected and unreported for so long? >> i can begin if you would like to add as well. very good question. on the focus of our review, we mostly focused on the review

where we looked at the very supporting documentation surrounding the rate setting process. we did not as part of the scope go beyond just looking at the back up documentation, what is available publicly in terms of the process. we did not as part of this review, we did not conduct interviews on the controller's side of the field work. >> is the ethics commission work you conduct trained in ethics at work? you know, any insight would be helpful from a design standpoint and targeting standpoint to who the appropriate audience would be to help spark the genesis of the culture of compliance.

if you see something, say something. what is wrong? who do i go to? how can i bring this up? thank you. >> if i may, i will add, commissioner, todd with the controller's office. that is helpful and can never be redoubled enough. in this case it is a complex rate setting process, however, as in the recommendations including the appen decks to the most recent report we outlined how to make it less complicated by showing all sources and uses by ratepayer customer type. similar to what happens on water rate setting at the sfpuc. setting up the financial statements so that an external auditor is reviewing, having consistency with the fiscal year period. one is on june 30.

recology financial statements are september 30. there are many other reporting recommendations that could be help to make omissions, errors and explainable variances more easily discovered and sooner to the degree they were to occur. that said, always redoubling the effort as you mentioned if you see something, say something. if you hear something, say something. escalate to our office and/or the city attorney's office or the rate board. that is always the right thing to do. thank you for the question. >> i think that your recommendations should be the blueprint for d.p.w. commission to follow in terms of overhauling and revitalizing public trust in any agency after

the many ongoing scandals. thank you for this important work. >> thank you. i see our other commissions have questions. commissioner bush. did you want to ask a question? >> i do. thank you. i have several questions. the role of paul goostey of the provider of illicit payments is sited in the report. he is also a city official. i am wondering if you can tell us who appointed paul goostey to a city board? how long has he been there? is there a relationship between

his work and his relationship to nuru? >> commissioner bush. we actually as part of our rate setting review did not look into that, the role on the commissions. i would refer to others with more information. >> it raises the question in my mind whether the so-called city family didn't even encourage relationships between city appointees that might not have otherwise come to light. i think it would be worthwhile knowing how that person was appointed and was that appointment reviewed and reappointed and so on. the second question. your earlier report muhammad

nuru noted as a city appointed official he was not required to make disclosures of the payments. that was a requirement of elected officials not appointed officials. has that been changed? >> yes, it has. there has been legislation put forth at the board of supervisors and i know that there is progress in terms of where that is. >> also, part of the mayor's directives. >> is that now in effect or just a proposal at this point? >> i don't know if deputy city attorney andrew will be able to provide an update. >> good morning. update. the mayor's executive director required department heads to

file the reports last fall. the legislation is working through the process sponsored by supervisors haney and peskin and chan as well. that is still pending at the board. in addition to additional reporting, it imposes prohibition for it altogether. we will see if it goes. it is still pending at the board. >> does it go deeper than department heads? in some departments there will be a deputy that has a great deal of authority. >> the current form of that legislation would prohibit solicitation by 700 fillers. the source have business before the department, seeking license, contract and so forth. >> thank you. >> another question. whether any of this was the subject of a whistleblower

complaint since 2017 when all of this began to take effect? does anyone know if there was a whistleblower complaint filed about excessive charges? >> commissioner bush, we don't have the information right now. we can definitely get back to you on that. >> thank you. i have one last question. are the rates for commercial the same as rates for residential? were they all affected by these changes? >> the commercial rate sets is completely separate from residential rate selling. the rates part of this settlement only affect residential. >> i can't help but wonder if a

sharper eye from someone, green eye shade, would have been at work on the commercial rate. they have a great deal of sensitivity. thank you. >> commissioner lee, you had your hand up to ask a question. >> thank you, madam chair. thank you for this really report and the details to explain how we got to this place. i have a couple questions. you mentioned about the rate consultant. can you tell me if the rate consultant falls into the city's

contractors category, which means they have to go through the regular process of being vetted, being screened. because they are given, in this case, the rate consultant was given a powerful job of making recommendations. are they considered a city contractor? second question. do you know how many other similar consultants do we have in the city that have that high of authority reporting to only one person who appointed that contractor or consultant to make the important recommendations involving city money? is there any record of how many

similar consultants we have in the city? what kind of oversight do we have over these folks, aside from them serving the department head or director who appoints them? >> i can start answering that and kate can fill in. from the review we have done, yes, the consultants that was involved in this process was hired through a city contracting process. it falls into that category of city vendor providing professional services to the city. kate, if you have additional information. >> i can speak to the ratepayer advocate was definitely solicited.

that was a competitive solicitation. with our three, we did not review the competitive solicitation on that. we can circle back. >> did you have any further questions? >> if you don't have the answer to my second question how many similar contractors do we have in the city, maybe this is something that we can follow up with others because if we have one person with that kind of power, it would be good to know how many others are out there and who is watching over them. whatsoever sight do we have over them? >> we will follow up on that one. we don't have that handy. >> i am going to follow up on

commissioner lee's question because you referred to the rate fairness board, which i know is a panel of citizens who overlook and i know they overlook water and power rates in the city. i assume they have jurisdiction over garbage rates as well. is that the case? anyone know if the rate fairness board has reviewed the garbage rates as part of their process? >> chair ambrose, i don't have the information on that one. >> i was wondering because we do have. i certainly have not been part of but witnessed the process of garbage rate setting in the city over my 35 years in the office.

i know because there is the provisions for the rate appeals board, which consists of the city administrator, controller and the head of the public utilities. perhaps it doesn't fall within the rate fairness board bailiwick, but i would like to know the answer to that. what i really want to know because i think your recommendations are very comprehensive and sound, but the real question is who is going to lead the charge? is it the city administrator? does the city administrator and the controller and for that matter public utilities, is that board putting together working meetings? you have talked about legislation at the board to implement prop b, which is a whole host of issues much

broader than just the role of the public works director as the rate setter. you have got -- anyway, i would like to hear so we know who to look to in the future to make sure that it is all being implemented. the other thing. when is the next rate setting scheduled for recology? >> if i may start, chair ambrose. todd reached the controller's office. the comments as far as oversight for the refuse setting, the oversight for that is the rate board. which is the refuse collection and disposal rate board as compared to the rate fairness board as noted in the sfpuc charter section regarding the water and sewer rates.

i don't want to create confusion between those two separate bodies. the recommendations in our report could be, for example, taken up by proposals from executive branch may consider them as well as the legislative branch and the public as well. we are actively responding to any questions that policymakers have including commissioners like yourself. those are considerations that could be forthcoming by introduction for voter consideration. i don't have any particular details on that or any proposals. perhaps some city attorney may have other insight into that. in addition, the typical garbage rate setting cycle, i believe they would have gone on four years from starting in 2018,

2019, 2020, 2021. so it would be up for a new rate package in the coming year or years in the event recology wanted to submit a proposed rate increase. i am not aware of them having submitted any proposed rate increase at this point or indicated as such. >> they would be eligible to do that in the coming year. i would imagine coming out of covid quite likely there are some changes in their calculations. to me it seems like there is some urgency in how we approach the process because, as commissioner chu pointed out, there has been a complete erosion of the public trust in the rate setting and recology so

it is important to move quickly. maybe the question indead of directed to you and staff is something we should maybe inquire of the mayor and the city administrator who would, i think, be in the best position to initiate some kind of ongoing working group to just things don't happen unless somebody is pushing it. there is too much day-to-day stuff to deal with around there. anyway, thank you for your very thoughtful review. we appreciate it and look forward to getting our refunds as well in our bills in september, i guess, we have to wait for the court to approve the settlement. it is good work by the city in getting that resolved and getting the rates adjusted.

thanks for your work on that as well. >> thank you, chair. if i may add one additional point. on the commercial and residential regarding what the charter sets for the residential, including the apartment. it is covering both sections. what is not covered are those which are commercial contracted negotiated rates, in particular. those it is outside of the settlement because they are separately negotiated by recology with commercial contract customers. >> thank you. we are going to have to call for public comment on this. i don't know if maybe mark can stick around in case we have questions after public comment. thank you very much for your time and attention to this.

>> commissioner bell, i didn't see your hand up. please proceed. >> i was wondering if you want to do more on the suggestion you made about a statement or something that might become from the commission regarding who takes the lead or the suggestion that you just made. if there in some way to explore making a statement, sending a letter or in some way doing something to express what you have just talked about. >> we could do it informally or formally. i would be in favor. i am trying to scramble to make sure this agenda item that we notice that we might take an action on this. i need to get back to that.

>> i wasn't suggesting an action. i was trying to be able to appropriately follow up on that suggestion in the best way possible. it doesn't mean we have to do it now. >> that we have to vote. okay. >> agenda item now says discussion and possible action related to report findings and recommendations. >> not to get into a lot of detail, but to send just a short statement to the mayor, city administrator, controller, and the head of the san francisco public utilities commission to say the commission strongly

endorses the recommendations of the controller and would like to be advised as to which of those entities would be taking the lead on pursuing implementation and that we would like, also, to be included in regular updates about the process of accomplishing those remedial actions. something along those lines. would that be what you had in mind, commissioner bell? >> yes. i just think that this -- he agree with what you -- i agree with what you said. these fall through the cracks in the daily operations as we come out of covid. i thought it would, you know, i

would like to follow up to see if we would actually do something specifically. >> thank you. we should go to public comment. if we want to make a motion, i would be happy to work with the executive director to draft that endorsement on the part of the commission and request for further updates on the progress from the agencies and individuals who would be most in the best position to implement the controller's recommendations. mr. moderator, do you want to go ahead and ask if there is any public comment? >> yes.

just out of curiosity. todd, i noticed your hand is still raised. >> thank you. madam chair we are checking for callers in the queue. for those on hold please continue to wait until the system indicates you are unmuted. if you just joined we are on public discussion of agenda item 4. presentation by the controller's office on april 14, 2021 report. preliminary assessment refuse rate-setting process lacks transparency and timely safeguards and discussion and possible action related to report findings and recommendations. you have three minutes for comments. six minutes with an interpreter. a bell will go off at 30 seconds

remaining. stand by. >> there are no callers. >> public comment on item 4 is closed. with that i suppose just to move things along. i will make a motion that we send a communication to the mayor, controller, head of the sfpuc, and the city

administrator expressing the commission's endorsement of the recommendations of the controller with regard to the preliminary assessment of the refuse rate setting process and ask that we be kept informed of the progress towards achieving those improvements. if there are any additions to my motion, i would certainly welcome any friendly amendments before the second. >> i would like to make an amendment. it is not directly out of the report. i would like to see a follow-up on how mr. dustey was appointed. what ways did it relate to the work of muhammad nuru. >> that is a separate motion. that is not part of the communications. i think we can do that at the

staff level between the ethics commission investigator staff and with communication with whatever -- do you know what body he was appointed to? >> advisory body. it is on the form 700. >> that wouldn't be part of the letter to the mayor and city administrator. >> only relationship i can see is that the controller's report has to do with oversight and this is a matter of oversight of the relationship of other city officials.

>> it is more operational as opposed to endorsement. no reason we can't do two separate motions. i am in favor much filing out how that individual was appointed and who appointed him. if that is the recommendation to take those motions separately. >> that is fine. >> first on the motion that i made is there a second? >> i second it. >> all right. thank you. any discussion? >> call the roll on that motion and we will entertain commissioner bush's motion. >> that motion is made and seconded. i will call the roll. >> commissioner bush. >> yes. >> commissioner chiu.

>> aye. >> vice chair lee. >> aye. >> commissioner bell. >> yes. >> chair ambrose. >> yes. >> five in the affirmative and zero opposed. the motion is approved unanimously. >> with respect to commissioner bush's motion. this is a motion to request the staff and city attorney to inquire as to the appointment of paul goostey to the city advisory board. who appointed and also in light of the information that is determined whether or not there can be an investigation into how that might relate to the

relationship between mr. goostey and mr. nuru with regard to refuse rate setting. >> i would include whether or not mr. goostey or others in similar situations are required to disclose they arranged that. >> okay. you stated that clearly. with that motion i will second your motion so we can move. any discussion of this motion? >> not a discussion but perhaps clarification. in terms of digging up that information, would i in working with the commission staff, would we report back to you and commissioner bush on those questions? what do you envision the item going back to being? >> i think it depends on getting

back to the commissioners, myself and mr. bush as well as executive director pelham and despending on what we hear we might agendas for further discussion before the full commission. >> thank you. >> disclosure to the public. >> well, let's wait until we hear what it is. it might be part of an investigation, a larger investigation. >> all right. i defer. >> all right. then can i ask for a roll call. >> motion made and seconded. commissioner bush. >> yes. >> commissioner chiu. >> aye. >> vice chair lee.

>> aye. >> commissioner bell. >> yes. >> chair ambrose. >> yes. >> five votes in the affirmative and zero votes approved. motion approved unanimously. >> thank you very much. before we move to agenda item 5. which is a fairly substantial report. i would like to take a five to 10 minute break. is everybody okay with that? i will say 10 to be realistic. see you back at >> we are back into session. i want to call agenda item 5. a presentation of the staff report, report on the san francisco public campaign financing program, november 3, 2020 election and discussion and possible action related to report findings. we will hear from commission

staff pat ford and rob hutch. please proceed. >> thank you, chair ambrose, commissioners, thank you for having me join you today. as mentioned. i will be giving a presentation that ties in directly to the report included with the agenda packet. our annual report on public financing program for the prior election. i will pause a moment. pat, do you have anything to add? otherwise i will jump into the presentation? >> no, go ahead. i will be here to help with questions that might come up. >> thank you. please feel free if any questions come up, i am happy to

pause for a moment to allow for questions or provide additional information or content. this is a presentation on the campaign financing program for the november 3, 2020 election. as you may be aware, following each election cycle the ethics commission prepares a reporter for the mayor and board of supervisors. this should contain a variety of information related to the amount of candidates that seek to participate, are approved, how much funding is provided, as well as additional facts and figures related to the program such as spending by third-parties or any adjustments to the candidate expenditure ceiling. this is a presentation of the highlights and key findings we

had documented in the report prepared in connection with the november 2020 election. quickly to recap and review. prior to the election cycle the commission and board of supervisors did make a few changes to the program. these were intended to encourage more candidate participation, decrease dependency on private contributions and reducing the amount of time candidates spend time raising and increase the value of the smaller contributions, especially under $100. to do this, the initial payment was increased to $60,000. once a candidate was approved to participate in the program, their initial payments were received with $50,000. this was to help give a bigger boost to the smaller grassroot

candidates. we increased per candidate funding to $255,000 for board of supervisors candidate. matching ratios were adjusted to six to one for all eligible contributions. previously we were using a two to one and one-to-one payment system. finally there was $150 cap for all eligible contributions. this capped the total amount of money, funds matched to an individual contributor. in looking at the final figures for the 2020 election, the highest rate of participation since inception. the candidates were approved to receive public funds. previously 48% in 2010. this was remarkable statistics.

the only district without candidates was district nine where we had one candidate running unopposed. otherwise, every election race by at least two candidates approved for public financing. public funds to candidates were 58% of all funds. private and public funds. it does not include nonmonetary contributions candidates received. this is the first time public funds exceeded private contributions raised by candidates. previously we would see 35% in that range public funding for total funds. this is significant that we are able to say public funds represented the majority of

funding candidates were receive receiving in an election. average distribution was $215,000 or $216,000 per candidate. this exceeded the previous $126,000 in 2016. this is due to the significant change in the total amount of funds the candidates could receive going from $155,000 to $255,000. we would expect that increase. this is significant step in achieving goals of the program. our total amount of funds disbursed was a little over $3.4 million acceding the previous high of $1.5 million in 2016. we are looking just at the four general election cycles, no

special elections where one or two offices were listed. in the 2020 election cycle candidate spending totaled $5.4 million. the public funds disbursed represented 64% of the expenditures made by the candidates. first time it exceeded 50%. previous high of 41% which we saw in 2010 and 2012. this is significant. one of the goals of the program is to reduce candidate dependency on private contributions and reducing the time they spend fund-raising and they can focus time engaging with electors and constituents discussing issues, engaging in debates rather than holding

private donation functions. we did see dip in spending. we did see all supervisor races were impacted by third-party spending including supportive funds, funds supporting candidates and opposition spending against candidates. we did see third-party spending more than five to one. as noted in the full report, this report really is just describetive in nature. we try to present information to increase transparency and understanding of the program for both city officials and for the public. public has a right to know how public funds are used within this program. it was difficult for us to come

up with concrete to make the concrete analysis with just one election cycle and the nature of the pandemic affected candidates and third party groups. some future analysis will be necessary to assess changes to the programs and effectiveness of program. is the program achieving the goals that it is set out to achieve? we hope in the future as additional cycles are completed we can compile more data and do a deeper dive. there will be opportunities to reach out to candidates to solicit their opinions to provide a fully assessment of what the program is achieving and what we are trying to accomplish. with that i will pause and i am

happy to take any questions you may have. >> thank you. i appreciate not just the report but the good work you did managing all of the public financing contributions to you and to all of the rest of the staff. for some reason, i got thrown off web ex. i don't know if you noticed i disappeared for a minute and got back on. now, i need to get back to the screen where i can see that commissioner bush has his hand up to ask a question. please go ahead, commissioner bush. >> thank you. in the independent expenditures, those are different committees. some committees are earmarking the funds to a specific office,

either to elect on are defeat someone for that office. do you know how many of the ei's -- ie's go to targeted committees like that? >> i would need to go back to look. that is an analysis we could do to see the committees that were spending money as third-party or independent expenditures. we could go back to see what funds they were receiving, how they were spending the funds. within the report there is -- and we do have charts and tables to show which candidates were on the receiving end of those expenditures. in terms of knowing the specific committees that were spending money, that was not included in the report. that is an analysis we can do.

i can tell you having reviewed those expenditures we did see a variety of committees primarily formed specifically to support or oppose a candidate. we had committees to make a variety of expenditures. they are not to specifically form as supportive or opposition to one candidate. they do spend money in a variety of races so they are a different category. >> there was a mega donor to progress san francisco which gives money to more than one candidate. in making the pitch for contributions they pointed out by giving through the entity like that, their identity would not be disclosed to the public.

furthermore they would be able to give contributions even if they were otherwise prohibited from making contributions to a specific candidate. it becomes a way of gaming the system for people who have business with the city but who cannot contribute to the people who make those decisions. to the extent that your analysis can look at that, that would be helpful. one of the things that is true is that we do not require reporting of nonmonetary contributions such as value of political consultants if it is donated. can you look at expenditures to see to what extent there are expenses that are attributed to people who otherwise would have to disclose they were making

contributions, whether or not for a treasurer or polling or whatever. can your analysis look at that? >> based on the state laws, nonmonetary contributions are treated the same as cash contribution. if anyone were trying to contribute nonmonetary contribution to candidate directly. they would be subject to the same limitation rules that anyone with a cash contribution would be subject to. the difference in the expenditure committee is because they are at-large. there can be be any coordination with any candidate even if you are to oppose candidate a you cannot concernnate with candidate b.

that is how they are designated independent. the prohibition on coordination allows the contributions in excess of our limits on city elected officials. however, we can go back to we would be able to compile information on who has reported and received nonmonetary contribution and individuals who qualify as major donors. they would be required to record it on their major donor reports as well that is 461. there is a way to go through and compile that information to see the people that are reporting and receiving the nonmonetary and other contributors reporting it and we could put that toeing and trace to see if everyone is reporting accurately and is everything reported within

compliance of the law? >> thank you. my last question has to do with the timing of contributions, particularly to ie. it used to be that early money is like yeast so we have the groups trying to get contributionsearly in the process. i have seen significant contribution in the last few days before the votes are cast or even on election day or immediately there after. can your analysis give us a picture whether or not there is heavy donations coming in on election day or there after? for example, in some occasions there will be an la nonprofit who is giving $100,000 for a get out the vote effort.

it is designed to be in certain neighborhoods on behalf of a certain candidate though it is not filled out as clearly as that. i think you guys could look and give us some sense of what is going on because for the most part if it is coming in at the end, it doesn't get reported for a couple of months. it wouldn't show up until the january 30th report. whereas where it made a difference was on november 7th or something like that. >> with the dashboards that our team created and with the resources we have through the e-filing system it is easy for us to compile a timeline when the contributions are coming in. we have added benefit if a

committee would prepare last minute radio ad that goes out two days before the election. once that expenditure is incurred. they are required to report that if the invoices are paid or if they are waiting for money, the public would know under the 24 hour disclosure rules that committee is engaged or has an agreement to have that created and dispersed. we would be aware of that expenditure occurring. even if they are waiting for money later on. it would give an opportunity to go back to see there was a committee incurred $20,000 in expenditures for independent expenditures over the last four days before the election. we could go through to see later on they got $20,000 from some source. the reporting would allow us to

tie that toeing. yes, there is await with year end reporting. they aren't required to report until the money comes in. we might have to wait until january. it may take more time for the disclosure to see what other records might be relevant. >> in the massachusetts you might see an expense -- in the past an expenditure took place. it is accrued expenses. we don't know the donor until much later. in fact, often until after the person is sworn into office and votes are being cast. is that still the case? >> yes, most often with the elections in november we would know by january 31st the next

year. committees wouldn't have to disclose all financial information that happened the last few days. to an election as well as anything that happened after it. it would be a bit of gap in that disclosure but we are finding out within a two month window, two and a half month window when the election would be done. even by the time votes are certified, you are looking at two month window to get that information. we have to work with that date for filing. we can go through through an extensive audited we can compile this information and connect the dots as best we can. >> thank you. it would be helpful to know if

there is a big slug of money coming in we don't know the actual source. >> i want to follow up with commissioner bush's comment. the point that you raised about independent expenditure committees and whether or not donations for the committees is a way for a donor to get around a restricted source. is that something that the commission staff can speak to or look into with the help of some legal counsel, if required? obviously, the ability to form a support committee and have all of the restricted sources

donating to that committee is something that defeats the whole purpose of the restricted source rule. can somebody speak to that? >> sure, i can take that question. you are correct. the rule does not apply this that way. that applies to candidate committees. there are many rules that only apply to candidate committees. the $500 limit to the candidate committees. we are constrained in what rules to apply to the finances of independent expenditure committees. they are not controlled by the candidate. supreme court does not consider the same corruption with candidate committees. if we agree is beside the point. we are subject to that. you will remember recently we

were party to litigation over campaign finance rules we were beginning to administrator. whether or not we agree with the rules we have to follow those constitutional limitations. we explore what those are and explore with the deputy city attorney if you want to apply to source rule to independent expenditure committee that would be challenging. >> i don't want to go into legal issues. i assumed that was underlying this. i know we are up against it in terms of the raw on the books and the concerns about new precedents given the state of the jurisprudence. going back to disclosure, we can

make information more widely available. is there any reason why we can't identify the donors who are restricted sources and put them in a separate listing? by the way, did you know that recology is donating x dollars to the chair or president of the board of supervisors support committee or something to that effect? can we make it known even if we can't stop it? >> i am not sure there is a reason that we can't do it other than exceedingly difficult to do. this is something that campaigns have to do on their own to determine what the contractor is. they have to use information

from the 126, f2 and f4 filings. they are first by city departments and then elected officials when contracts are bidded on and approved. we would have to do analysis for each contributor to determine if a contributor is also a contract or whose contract was approved by the contractor that they oppose or support. it is a complex analysis on a case to case bases. i don't know that we can automate that. >> the last discussion i had with randy riddle when he was at the end of his life. his conclusion was that if the committee states in its purpose that it exists to elect or defeat a particular candidate that you could apply a different

set of rules compared to those that are not tied to a candidate at all. he felt that would be permissible in terms of dealing with disclosures and even prohibition if it was a city contractor or someone with city businesses. we didn't actually draft something to that before he died. >> i actually think that is something that pat and andrew can have a discussion about, but before i lose it i want to go to the point that you made. it seems to me that and this is getting back to the work we need to do about how to better improve our disclosure rules to avoid the problems that we have

encountered with the scandal. in terms of candidates for the board of supervisors and for the mayor, it is not rocket science for somebody to come up with a list of who had a city contract that went to the board of supervisors they are over a million dollars and 10 years in duration. they are not like a pencil purchase. very few contracts go to the mayor for approval. putting aside what we would use that list for purposes of cross tabbing against the donations to ei committees, why doesn't the board already have that so it is easy for the supervisors to look and see who they shouldn't be taking donations from? the idea that each individual

candidate has to go out on their own and figure out which contracts came before the board within their tenure seems unnecessarily sort everypetitive investigation -- of the repetitive investigation. if we don't have the list of the contracts in front of the board or mayor, then maybe that is a different thing we should recommend they do. that is the whole as we move forward with that legislation and are trying to own in on what an interested party is and who is a restricted source, we could focus on making that information easier to get and more useful in terms of determining whether or not recology at all are donating money inappropriately.

>> i can speak to that. that does exist. that is the x4 form i mentioned. 126x4. the elected eofficial has to file the 126f4. they can look at what contracts that elected official has proved. that does exist. from our perspective if we assess which contributor would have been a restricted source had they try to to give to the candidates. for candidates or the contractor contributions they have the 126f4 and f2 data submitted by departments when the bid is received. both the bid and the approval

are relevant to triggering the contract contribution rule. that data is there and the candidates have to use that data to do due diligence to receive contributions. >> in some theoretical future, i think i would be interested in doing some random audit where we actually look at that. if it is commissioner bush that said you have people advertising this is a way to get money in support of your candidate without subject to the restrictions that is a call to action. that is the while point is that while we can't constitutionally restrict their free speech, we sure an as hell can use the information at our disposal to

expose the loophole in their sub version of our public good government laws. i will stop preaching to the choir. i know you would love to make it something that we could regulate directly and go to commissioner lee. your hand was up. if you want to ask a question or comment. >> thank you. i have a couple questions. the report is good information. i hope that we can at least issue a preliminary press statement, so to speak. to let people know how this program is going instead of waiting until the final while the attention is still there.

maybe we should issue some kind of preliminary findings. i would really -- i was intrigued with the third-party opposition funding. i always thought that negative campaigns work. that is why they tell you to go negative. from this report, the candidate who are on the receiving end of the opposition prevailed at least 50%. that would be a really good topic for us to drill into. is it a trend or is it just and

anomaly? i would like to hear your thoughts. is this a san francisco thing or have we been fooled by this opposition negative campaigning? the final question i have is it is great to have all of these people tapping into the public financing pot. i wonder if the resource that we have in there, do you know if it is depleted? i know that it is based on the census numbers. does the money get put in? i wonder if we are going to increase the pot based on the

latest census or lose some money, therefore, we need to look at other ways to keep the pot growing. >> i can speak to your first question. what we have seen it fluctuates election cycle to election cycle. some years supportive spending is 75 to 80%. other years such as this past year where it is almost 50/50 even split. it is difficult to say why committees might choose to go opposition or go supportive or what the rationale thinks is. that is something we could go back to look at and see spending

as it relates to the candidates that were elected. as mentioned before. the edit team has done a great job of making the data accessible to us. i am sure was we do feature analysis review of the program. we could consider that. i will defer to pat on the discussion about the funding level for the public financing program. >> if question about the election campaign fund is important to keep in mind as we do every year during the budgeting cycle. in a year when the city, if the city adjusts the figures based on the prior census, the city's population is part of the formula for what is required to be appropriated to the fund every year. as you know. $2.75 per resident each fiscal

year required under the law to be appropriated to the fund. currently we have population of 875,000. should there be reduction, that would be troubling given there has been such high participation rates. if we see the rates continue and particularly when we look to years coming down the road where there will be mayoral elections. that would be an additional draw on the fund that we haven't seen under these current provisions of the program. it is something we need to keep a close eye on. we don't have an answer as we sit here. it is something to factor in. every year as we do in the budget process we are in communication with controller's and mayor's office what the funding requires, and projections about what we think the future draw might be. that is also a good factor to keep in mind and identify

whether the change rather than later. >> a follow-up question to the director. the formula, $2.75 per resident formula. is it a mandate or flexible? for instance, if with population growth we still need to expand the pot, so to speak. can we go back to say, hey, we need to revisit the formula. how long has the formula been in place? has it been adjusted through inflation or anything at all? >> i can't speak specifically to adjustments to the formula since the inception of the program. that may be when it took effect

in 2000 that was established at the time. i would want to confirm that. i don't have that in front of me. our read of the language is that the ordinance requires that the city receive annual general fun appropriation of $2.75 per resident every fiscal year. if the funds are drawn down, those funds remain in the campaign election campaign fund for the following year. it continues in there. currently the maximum is $7 million fund. whether the $4 million changes or the maximum amount needs to change over time to accommodate potential use. that is part of the purpose of the reports for the databased on what we have seen election year to be election year for a solid basis for the projections. this introduces an unknown at this point. we can reach out to the

controller's office to make sure we are aware of the changes as soon as they know it so we can have more feedback about recommendations if there are some that need to be made. thank you for the question. >> commissioner chiu. >> i had a few questions. first i wanted to say what great results for driving increased participation and higher percentage of public funds versus private in this year's election. it is not a trend but this is the first litmus test of the revised public financing framework that is put into place.

the preliminary results are great. my question relates to the participation rates. it is up to 62% and could be as high as 48%. two questions. of the 26, 10 were not certified for public financing. i would be interested to know why they were not certified. i want to understand the barriers, did not raise enough funds to be certified? to hopefully increase in the future or address more candidates qualifying. second, could we benchmark what the results are in other jurisdictions in terms of public financing participation? instead of just it is great and important to analyze our own results.

how do we compare, if we can, apples to apples and oranges to oranges to la or new york. in terms of participation, 50% is huge over 48%. what does good look like? what should we target is my first question. second, going back to the nonmonetary contributions that were discussed when commissioner bush asked his question. i understand that they are treated the same as cash, but is it the filers who sets the value of the nonmonetary contributions? is there a cap on that? i am blanking on this at the moment. you know, if it is consulting or polling or getting out the vote, is there a possibility that it

could be valued, my contributions at $500. the value at fair market rate would be in excess of that amount. is there a possibility of abuse or underreporting that would go undetected? >> just to your first point about participation rate. out of the 10 that did not receive any public financing, one was incumbent and elected to not participate. off the top of my head, i believe the majority of the other nine that did not qualify did not receive the minimum $10,000. that is what you have to submit.

$10,000 for nonincumbent, $15,000 for incouple bunt from san francisco residents. they didn't reach the $10,000 in total. it may just be a variety of reasons they couldn't reach this fund-raising thresholds. i believe there was at least two or three of those candidates did not file a statement. there is a form called statement of intent to participate or not participate. we did not receive that form by the required deadline. under the law if that is not filed you default to not participating. there are a few factors involved, that is something we can look at to see if any of those requirements for the program are creating a barrier or if we need to continue with the public awareness so

potential candidates are aware of deadlines required to engage in the program. to your question about nonmonetary contributions. state law and provisions stipulate it is the contributor that must notify the committee receiving the benefits of nonmonetary contribution. the nature and value. there is a little bit of protection given to the committee to report in good faith-based on what the donor provides them. there would be -- i do not want to speak too much to something that may fall under the enforcement division's purview. there would be avenues to believe that a contributor is not reporting an accurate value. i would imagine there would be mechanisms or avenues to pursue to investigate or review that.

i can't speak specificallies on that. the committee is allowed to report in good faith what the contributor applied with regard to monetary contribution. >> it would be difficult for the commission to know whether or not that contributor was underreporting the value of their services. we wouldn't have visibility into the get out of the vote work they had been doing? >> yes. reasonable observer could say $500 for a radio ad that went across the city might raise a flag and could be something to look into more. yes, on the surface it would be consult with out further information. that would be something i would just divert to the enforcement

team explanation how to go about looking into that. >> if i might jump in commissioner chiu. as we look through the audit program, one of the things when we do the audits of the committees candidate or noncandidate they require documentation to perform the audit. we look at the audit testing that we do, documentation to review. there may be opportunities to gain information about records and data and to verify the reporting that is done to ensure the reporting is accurate. that is yet another tool we have when we do discretionary audits to verify accuracy of reports filed. >> thank you. just my last request is i don't know if you -- i don't think all of the charts you have included in your presentation were

included in the preliminary agenda items sent out. if you could send that to the commissioners that would be really great. very easy to read and laid out all of the information i would like to take a deeper dive into it. >> i will make sure that the executive director has a copy of the presentation so they can be provided to you. i believe the charts showing the total candidate expenditures versus public financing disbursed is the only chart not provided. some look different because of the color scheme and the format. >> if you could send the two slides, that would be great. >> it is also on the website so the public can have it as well.

>> excellent. thank you. >> i have one small question. it seems to me the chart. for district 5 candidate spending. one of the candidates spent more money than we identify their having total funds. i am not sure why that is. is that because money came in after we were registering it? this is on page 9, supervisor preston is listed as having expended $485,000 but only had

$483,000 as total funds. >> supervisor preston was involved in the 2019 special election for district 5. at the conclusion at that election there was a surplus of funds that he was allowed to carry forward to a future election cycle. that would not show up as a past contribution or nonmonetary. it has a special category. it does look like funds raised even though it would allow him to fund additional funds even though it is not captured in the total funds raise understand the election cycle. >> just a final question. i know your staff are on the front line in dealing with the

candidates and particularly the treasury committee treasures. was there feedback in the stakeholders in using this program about the changes? things they wished they had more clarity on or that they thought weren't working well? >> many that we were working with had been involved in the 2018 or 2019 election cycles. we were working to expand the education and outreach materials we center. our new presentation expended supplemental guides. i personally have heard from several that were appreciating the new materials. they reduced the questions that needed to be asked.

most of the questions were not about the rules specifically of the program. the nature of the documentation and what candidates should provide to streamline applications and ensure higher success rate. it seems like we had a lot of positive reaction to our responses to the questions. we are always -- any questions that come in we keep track of so we can be if we get a lot of questions from multiple candidates is there a gap where we can expand or improve our educational materials so that those questions are answered in the future. >> good. i am going to go to the moderator. >> a point of information. after an election is over, a candidate can continue to raise money from that committee and

spend it for what are considered to be office expenses even though we have banned the creation of office holder accounts. there is a work around that is allowed successful candidate goes to continue to raise money as long as it is not acceding the $500 limit of any specific donor and spend that for whatever office purpose they want. taking staff out for lunches or paying for polling for a future office they might want to run for or whatever else. that is a huge gap in our current law. i wanted to put that out there. >> they don't have to disclose they raised that money?

>> they disclose semi-annual basis. you only see it six months afterwards each time. >> including who the donors were? >> exactly. >> i am going to go to the moderator so he can read a lengthy instruction for public comment. >> we are checking to see if there are caller in the queue. we are on public discussion of agenda item 5. presentation of staff report, report on san francisco public campaign financing program, november 3, 2020 election and

discussion and possible action related to report findings. if you have not done so press star 3 to be added to the public comment queue. you have three minutes, six minutes if you have an interpreter. a bell will go off when you have 30 seconds remaining. please stand by. >> we have no callers in the queue.

you are muted. >> thank you. closing public comment on agenda item 5. i will call agenda item 6. that would be discussion of staff policy report. pat ford, you are back up again. >> thank you, chair ambrose. legislative affairs council. i will make this brief since you have had a chance to read the report. updates. since the report was written the payment ordinance concluded yesterday. you discussed this a little bit. under the cromler's report agenda item. andrew reminded you what is in

that. meet and confer is done. that ordinance can be heard at the board of supervisors. i am working with supervisor haney's office to see when that item might be heard at the rules committee. next step is to schedule a hearing to discuss it and hopefully since two of the three members are sponsors of the legislation they will give a positive recommendation to the full board and soon there after the full board would consider this. we continue to update you on that. on the gift side phase two of the project. we had two interested persons. thank you to those that participated in one of those meetings. they gave us good information to work with. we will continue to update you on that project and how it

proceeds. we have good ideas of folks that they shared with us. after that meeting, michael and i had the opportunity to meet with an attorney from the campaign legal center in washington to talk about some research they might have done on gifts they could share with us and potentially new research they might do as well. phase one is the payment face. campaign legal center offered very helpful research they did about the payment rules in other jurisdictions. we hope they may be able to do something similar for gift rules. they are a very helpful and engaged stakeholder. they offered a couple of very helpful reports during that process. we are glad to have them on this project. the other other thing i will mention is that i did a forum with one of the attorneys from

campaign legal center back on april 28th. we were panelists on a panel that the league of women voters held in alameda talking about creating new campaign finance rules in alameda and asked us to give them a primer on canal pain finance rules. that -- campaign be finance rules. that was an opportunity to engage community engagement and league of women voters as stakeholder and get folks from alameda to engage with us. i will answer any questions you might have. >> thanks, pat. that is good news about the meet and confer process concluded. thank you for undertaking that. when the board does calendar it, whether we have a meeting scheduled timely or not,

director pelham, would you let the commissioners know when that is calendared so that if we choose to individually we could participate by calling in at the board or watching the proceedings there. of course, i understand that the board has independent authority to adopt legislation on that particular subject. it doesn't require, if i recall correctly, the affirmation of the ethics commission. we did make recommendations to them. i am sure we may find ourselves wanting to take a position in between the hearing and rules and before it goes to the full board so keep track of that timing and keep us informed so we have an opportunity to comment if we need to. are there any comments or questions from any of the other

commissioners about the policy report? i don't see any hands up. just waiting. if not i will have the moderator make the announcement for public comment. >> we are checking for callers in the queue. if you are on hold wait until you are unmuted. we are on public discussion of agenda item 6. discussion of staff policy report. press star 3 to be added to the public comment queue. you have three minutes or six minutes with an interpreter. a bell will go off at 30 seconds remaining. please stand by.

>> we have no callers in the queue. >> public comment on agenda item 6 has closed. i am going to call agenda item 7. i believe we will find that it is a discussion of executive director's report. update of the highlights of the staff activities since the commission's previous meeting. if you would, executive director pelham. >> thank you, the report has several items i will get to mow get to.i want to share informatt

developed after the commission meeting materials were produced this week that you may have seen in yesterday's news report. i will defer here to city attorney as well since this item is not on the agenda, it may be advisable to hold off on the discussion until next month when we can schedule it properly for the discussion at that time. as you may have seen yesterday, the city attorney issued a press release announcing the settlement between the city and walter wong who is a central figure in the city's ongoing corruption investigations over the past year. while the settlement agreement issued is one in which our office we are not a named party. our office had a role. i just want to bring that to

your attention today regarding maximum penalties extracted from mr. wong for 12 violations of government code violations. general background the city's laws find that it is important to have greater transparency in the city and county to make sure the permitting process protects public confidence and impartiality of the processes that deal with permitting in the city. the law achieves that with reasonable public disclosure requirements about who is paying permitting consultants, what permits do they seek, what contacts are they may being to obtain the permits they are seeking, and political contributions to city officials over each quarterly period. assetsment document -- there

were 12 violations for failing to disclose those contacts on what matters that were at issue. the maximum penalties that were extracted as part of the settlement is total 3 $17,000 $. following the city attorney's announcement yesterday, the settlement will go the board of supervisors for action. again, this is something that will extract the maximum enforcement penalties for violations of our local laws and determines to hold those accountable who disregard the laws and prevents the public from having the information to have confidence if the city processes. i will defer to the city attorney, but would encourage

the commission that we place this on the agenda in june for a full here briefing at that point. i wanted to make sure to highlight that as the first item of my report this month. let me briefly recap two other brief items then i will answer any questions. we do have annual 700 filings were due across california in april. we have an update for you. as of today, you may recall we had 94% filing rate by the deadline for electronic filers. today we have one outstanding official sunshine and ethics certification training filed. three out standing form 700. the staff is in communication over the past month with those

individuals. we have processes to continue to follow up with those individuals as permitted under the law if those farms are not timely filed. we have made progress in securing outstanding statements since the last meeting. as i mentioned last month we have a very busy april welcoming and on boarding new staff. last month i introduced three new staff. today i am delighted to introduce you to two others. linda fong is the new audit and compliance review manager to lead audit division and to shepard a new chapter for the audit program. not just campaign audits but to focus on lobbying audits and develop procedures for form 700s recommended in the controller's report. linda has experience in the financial services industry

working in the audit area and brings insight and experience to this work. we are happy to welcome linda here with us today for this meeting. also, amy wilson joined as the new investigator in the enforcement division. she has hey strong background. he is a auditor with the california auditor's office for the past three years and public policy background. very familiar with documents and connected the dots. we are glad to have him as part of the staff. look forward for them to meet with you have with information and projects. i am happy to have the opportunity to introduce them to you this morning. finally, we did post one of our

vacant senior investigator and legal analyst in enforcement that was vacated when mclean took another position in late february. it is on the job page. we are hoping to post also the vacant auditor's position vacated when amy lee took a promotional opportunity in the city. we have good progress on that front. no new news on the budget. we hope to hear more in the coming days. no news on that front. we have just had a very busy month with our new staff and on boarding and looking forward to reporting on the progress we were making now that the seats are filled. i am happy to answer any questions. i appreciate linda here this

morning and to acknowledge they are with us as well. thank you. >> welcome to linda and amon. i appreciate your joining the team here. i know that executive director and staff are thrilled to have the additional resources as well. going back to the settlement, thank you for sharing that with us yesterday. i do think we should calendar it for the meeting in june so that, one, we can track the progress through the board of supervisors assuming that it will be been calendared in rules by them. we give an opportunity for commissioners to understand both the violations and the maximum penalties and asking any questions about the settlement agreement. with respect to the budget, remind me the mayor's budget is

due at the board by june 1st or may 31st? >> i believe it is june 1st when the budget would be presented. we will know more in the next couple of weeks. >> you don't get an advance copy? is that what you are saying? >> that's right. >> make sure you put the budget on as action item for the june meeting so that if we need to send something to the board encouraging them to adopt or even chance the mayor's budget we are in position to take action in june before the board has to act by july on the budget. any other comments from commissioners? i see commissioner chiu, you have your hand up. >> thank you. i have a few questions. first i want to say welcome to linda and amon. excited that you are joining the team. your expertise and experience

will be greatly valued and needed in the work going forward. thank you for taking on this opportunity and the challenges. back to the form 700. there are three outstanding. are any of those who have yet to file or complete the training and certification, are any of them elected or appointed members of boards or commissions that have yet to file? first question. second. the late fee is $10 per day after maximum of $100. it is just going to cost me $100 to not file. it doesn't seem to serve as much deterrent or penalty for failing to file because we are now in the six weeks in and counting from the april 1st deadline.

my second question is what would it take to amends these types of penalties? [please stand by]

three individuals who have their annual yet outstanding a member of the board of examiners, a member of the board of education and then a member of the revenue bond oversight committee. each of the individuals have been notified about the late filing have been notified about no file no vote requirements if anybody serving on a board has been reminded of the requirements because it is currently in the law. as for the maximum fines available, because they're

fundamental state requirements, they are based in state law, i think it's worth asking if the city can be restrictive and add on to that. i think as we look through the policy in the ethics arena and reporting, if there are ways to tighten that up, should have that as an open question and recall, if somebody doesn't file, there's potential administrative enforcement action that can be taken with fines up to $5,000 per violation or three times the amount failed to be reported could be considered. those will be the normal course of an enforcement process. there's that additional ramification that could result if somebody didn't file the statement but were required to. >> so those initiative actions result only in financial -- there's no process or mechanism in which it could count removal

from a board or i don't know if there's something short of removal to prevent them from beyond the requirement of the law to say that you have not filed timely filed you should not participate, but if they participate any way, what are the legal consequences of somebody who has failed to file yet participates in a vote and what is the legality of the vote would be my first question. and second, what are the options for the commission to take enforcement actions against the delinquent filer from continuing to participate in procedurings and voting when they're clearly not allowed to. >> i'm going to ask the director

on general responses on what tools are available from enforcement perspective and deputy city attorney to what impact if any there is on the action can be taken while they are disqualified from voting. >> just two responses. if the commission wants to explore the ability to improve fines on non or late filers, we could explore legislative options to address. and the second thing, i would like to point out for the commission, on the last kind of handful of people that haven't gotten the filings submitted, some of them are no longer in office and probably didn't file

leaving forms. for example cooke is no longer on the school board and probably just didn't close the forms per se. another thing to bear in mind. >> that's good to know. if there's a way to flag that -- i don't know if there's a way to flag that in the system and follow up would be different from failing to file as a current officer or commissioner. >> yeah, it's when people leave office, elected office or as a commissioner, sometimes they don't file and it looks incomplete in the system. thank you. >> with respect to the other two individuals board of examiners and bond oversight committee i thought is what -- i can't

recall. if you have somebody who is an active member of a commission, then the staff, we are communicating with that commission or board to advise them that that individual is not eligible to participate in their meeting, correct? >> i don't want to speak for the director but my understanding is pat peterson has been good at notifying people and i try to do the same to let them know about the rule as well. >> and then just to short circuit the question about what are the implications for the vote, i know there was some earlier staff discussion with the city attorney's office about that and recommendation to further clarify the rules so that it's clear what the

consequences are if someone were to slip through the cracks and or aggressively insist on voting when they're disqualified under the provision. so i knew we had been anticipating legislation moving forward a lot sooner this year in terms of the loophole clean-up and had talked about putting something like that in a package and with the kind of slow walking -- but pending the meet and confer, this is not something that requires meet and confer. we do need to keep track of that before the circumstances actually arises and i would say that would be -- could happen by next year anyway. let's make sure we don't lose sight of that. i also see -- i have three

other hands. >> with regard to the fee, we budgeted -- were more lobbyists on our filing? i'm just curious there. and second would be the 32,000 in administrative fines by the commission. i'm not remembering what the fines were. is that because of a larger settlement that we had had. and i guess my third question going back to the registration fees -- is this in the

commission budget or the general fund? >> all of the revenues go to the general fund. i don't have a breakdown for you of the lobbyist legislation fees and if it creates an increase in the number of lobbyists but i'm happy to provide more information at the end of next meeting if that's okay. i think we can do a year look back to see what the numbers mean and if there's something new or different. i'm happy to present that next month. >> thank you. >> was that all of your questions? >> yes. >> then i'm going to go to commissioner bell. you had your hand up to make a comment or question. >> thank you chair. i would like to just put forward

for consideration you mentioned a package. don't know if this is what you were thinking about, i think the form 700 needs to be seen as a cultural piece of being appointed or elected person rather than just this kind of irritant that i have to do. commissioner's questions are right. so like for example, the person that appointed me, there should be notice that the person appointed hasn't filled out the forms or other things. i'm just thinking that i would like to propose that we think about a form 700 package orientation, kind of. i don't want to call it a drive. but something that is much more forward so it's like oh i just got appointed to this position.

here's just another thing to do. but i actually don't know that it means what we have discussed here. anyway, that's just a comment for the future, i would love to meet with the staff to talk about how we could make the form 700 -- i'm thinking about a packet, but a series of materials and things that people have to interact with so that we are building a culture that this means something as opposed to just a form you fill out. thank you. >> i think that's a great idea. i mean, it's part of our concept of changing the city's culture and building ethics at work. using that engagement with 3600 top level city employees in

addition to appointed and elected officials and i think that was something we're hoping to do once we have the staff and resources. but just with respect to elected and appointed officials, there's no reason we can't build around that. an i'm going to ask for commissioner lee, you had a question or comment? >> thank you madam chair. i want to echo what my colleagues have been saying about the form 700.

i have many friends who say i don't want to deal with 700. which is fine. and i would love to have us explore more ways to enforce it. i know the staff has given -- ample opportunities. maybe two should be the maximum. maybe they have forgotten or maybe they thought they need to file. which is fine. it happens to all of us.

there needs to be a time they take it seriously. in addition to the enforcement, the penalty, some people may not think a $1,000 penalty is a problem. maybe do like wall of shame, just out them. let the public know that every april all of these public officials are required to file. here are some of the folks who have not filed despite efforts to remind them.

it seems we do have the authority to let the public know who has been negligent in their responsibility of keeping up the reporting. maybe it would compel them to be more compliant. >> thank you. yeah, i don't see any reason why the name of the person who failed to file can't be disclosed. i do think it would be important that we be very careful and make sure we're right before we do

that. commissioner bush? >> i concur with the points being made by all of my colleagues on the commission. just add a few points. one is that it is my understanding that only the appointing authority can remove an appointtee. if you have a commissioner not filing, it is my understanding the ethics commission cannot have them removed but can ask the appointing authority to remove that person for failing to comply with the requirements. and it might be that we would want to forward a request to the planning authority if a certain amount of time goes by and point out how many times they were

contacted with no response and we urge they removed from the commission. that would certainly create the wall of shame that commissioner lee is referring to. secondly, while april 1st is the deadline for filing, if your financial situation changes in the year, you should update your form. say you sell your house and buy another house some place else, that would be important to know because it might be that the new property fell within the flip limit for passing a vote. so you would need to have that information. and same way commissioner raising the point about a packet of information to remind people of what it is that needs to be

reported. while the form 700 itself doesn't require reporting unless you are on a board with other people who have business before your commission, it is a state law. it could be a requirement that says when you're doing your reporting, you should report as well if you're on the board. say i was on the board of common cause and other members of the common cause board included people who had business before san francisco, i would have to disclose that under state law. we don't have a system that makes that disclosure except as i understand it informs the department head. otherwise it doesn't. i do have a question and that's on the expediter issue we were just discussing. currently they are not created the same as lobbyists.

lobbyists are prohibited from making contributions to candidates that they -- whose influence they seek, who they seek to influence nor prohibited from gifts or other ways act in ways that labbyists can't. should we consider treating permanent expediters as the same as we do lobbyists. there's really not a lot of difference between someone seeking to influence approval of the permit versus approval of a contract. so i want to raise that issue. >> thank you.

i know the controller's next subject is looking at requirements and for our own staff, the policy group taking up the question of gifts. but in that context, you know, looking at extending the gift rules to permanent expediters, i think is well within the scope. so that's something we can talk about when that gets on the agenda. i don't know when the controller is going to, but the staff has interested persons meeting with the larger community a week or two ago and i'm assuming we'll see something more in development of those ideas in the near term from staff and addressing the permanent expediter how they're treated after looking at the settlement

agreement, it's clear that there was a lot of unregulated conduct to say nothing of unreported even when it was required to be reported. we definitely need to look at that. i do want to go ahead and ask the moderator to please read the notice for public comment in hopes maybe there is somebody out there watching our meeting who wants to comment on any of these topics. >> we are checking to see if there are callers in the queue. for those on hold, press 3 to be added to the line.

>> i will call agenda item 8

discussion on items for future meetings. if any member of the public wants to comment, they should dial in now. do any of the commissioners have any matters they specifically want to have on future meetings and i do want to just note we have asked that the matter concerning the settlement agreement with mr. wong be included somewhere for some discussion about permit expediters and the fines and settlement that we will have an update on the budget and opportunity to take action on the budget. trying to think of -- if there is any opportunity to make a

public disclosure about the inquiry in the motion concerning the appointment, we would put that on the calendar. we'll certainly circulate to everyone before that meeting, the statement we forward to the mayor and city administrator and controller concerning our endorsement and follow up on the rate setting process. anything else anyone wants to request? i see one hand. >> i want to time this right for us to take up the form 700 again. i support the suggestion and

would volunteer myself to work with the director and commissioner bell, i think we could do to help take form 700 from have to do to cultural requirement for those who are -- have the honor and privilege to serve and create greater awareness and understanding of the importance and impact of completing the filing. >> okay. actually, with the new staff that the executive director has on board, i assumed she would bring us up to date on how they are able to move forward. i know they did complete the mlu

negotiations on form 700 if i -- or did i dream that, that we're done with that process. >> i don't think you did. i think it would be useful since we're going live with that filing next year to check in on that maybe at the meeting in july if that would be timely. that would be great. and that would give the commissioners a chance to talk and kind of engage with staff on some of the ideas about how we can make it a badge of honor to have been asked to do the disclosure process that make us in compliance with the ethics

code. commissioner bush. >> thank you. on issue of the budget discussion, i'd like to ask that the budget that's presented to us specifically state how much it would cost to implement each of the recommendations that have come from the board budget policy analyst and controller. i would like to see line by line what the recommendations are and what it would cost to implement the recommendations. >> as it relates to the ethics commission, not the large -- >> yes. >> okay. >> start putting in other people's. >> okay. i'm sure that's something they can look at. i don't know the --

>> it may be that somebody on the board would want to take a look and add something in, a specific proposal and its cost. >> uh-huh, okay. that's an optimistic view of the world. we'll try to end on that note. that we have champions for our causes. i am going to ask for public comment on this item. mr. moderator if you could please. >> madam chair, we are checking to see if there are callers on the queue. for those on hold, wait until the system indicates you have been unmuted. we're currently on agenda item 8. if you have not done so, press star 3 to be added to the public comment queue. you'll have three minutes to provide public comment. you'll hear a bell go off when

you have 30 seconds remaining. please stand by. madam chair, we have no callers in the queue. >> thank you. public comment is closed. agenda item 9 is an additional opportunity for public comment for items not on the agenda. if you want to read the instructions for that. and also, just by the way, most commissions have one opportunity for public comment. i long ago noted that the ethics

commission has one at the beginning and end of the meeting. i'm assuming maybe commissioner bush could tell us the history of that, was put in to enhance the opportunity for any general comment about something that might occur to somebody during the course of the meeting. but not now but i do want to follow up with the executive director about why that is and whether or not it's necessary to have the second one or if we could -- if there's nobody commenting on anything up to that item, if there's some reason we couldn't just take that item off the calendar at that particular meeting. so anyway, with that please. >> we are checking to see if there are callers in the queue. for those on hold please continue to wait until the system indicates you have been unmuted. if you just joined the meeting,

we're on public discussion agenda item 9. additional comment for matters not appearing on the agenda. if you have not done so, press star 3 to be added to the public comment queue. you'll have three minutes to provide public comment, six minutes with an interpreter. you will hear a bell when you have 30 seconds remaining. please stand by.

you can also e-mail comments. written comments should be e-mailed to the ethics commission. madam chair, no callers in the queue. >> all right public comment is closed. calling item 10, adjournment. do we have a motion to adjourn the meeting? >> so moved. a motion has been made. can you call the roll? >> (roll call)

the motion is approved. >> all right. with that, the meeting is adjourned at 12:33 p.m. thank you very much to the staff and all the commissioners.

>> candlestick park known also as the stick was an outdoor stadium for sports and entertainment. built between 1958 to 1960, it was located in the bayview hunters point where it was home to the san francisco giants and 49ers. the last event held was a concert in late 2014. it was demolished in 2015. mlb team the san francisco giants played at candlestick from 1960-1999. fans came to see players such a willie mays and barry bonds, over 38 seasons in the open

ballpark. an upper deck expansion was added in the 1970s. there are two world series played at the stick in 1962 and in 198 9. during the 1989 world series against the oakland as they were shook by an earthquake. candlestick's enclosure had minor damages from the quake but its design saved thousands of lives. nfl team the san francisco 49ers played at candlestick from feign 71-2013. it was home to five-time super bowl champion teams and hall of fame players by joe montana, jerry rice and steve jones. in 1982, the game-winning touchdown pass from joe montana to dwight clark was known as "the catch." leading the niners to their first super bowl. the 49ers hosted eight n.f.c. championship games including the

2001 season that ended with a loss to the new york giants. in 201, the last event held at candlestick park was a concert by paul mccartney who played with the beatles in 1966, the stadium's first concert. demolition of the stick began in late 2014 and it was completed in september 2015. the giants had moved to pacific rail park in 2000 while the 49ers moved to santa clara in 2014. with structural claims and numerous name changes, many have passed through and will remember candlestick park as home to the legendary athletes and entertainment. these memorable moments will live on in a place called the stick. (♪♪♪)

>> supervisor ronen: good morning. welcome to the may 14th regularly scheduled meeting of the youth, young adult and families committee. i'm supervisor hillary ronen, chair of the committee. we will be joined by vice chair supervisor safai and supervisor melgar is present.