Report knocks city administrator for inefficiency, lack of transparency

‘A culture that allows corruption to take place’

The city administrator, commonly acknowledged as the most powerful unelected official in San Francisco, presides over a bloated fiefdom that lacks accountability to the rest of city government, according to a new report from the budget and legislative analyst.

While the report does not explicitly reference the ongoing corruption probe into City Hall, it identifies a lack of oversight and transparency within an office whose two dozen divisions — which for now include the Department of Public Works — have been at the center of the scandal.

“The city government as it’s currently structured creates a culture that allows corruption to take place,” said Supervisor Connie Chan, who requested the report. “Now we have pinpointed some of the problems we have within that structure, and we need to fix those problems.”

The report comes at a time of major change at the Office of the City Administrator. A new department head, Carmen Chu, took over in February after City Administrator Naomi Kelly resigned following corruption charges against her husband, Harlan Kelly, the former general manager of the San Francisco Public Utilities Commission.

Chu has already embarked on a major restructuring of the OCA, which will include turning the Department of Public Works into two standalone agencies, each with its own oversight commission. Voters approved that change in 2020 by passing Proposition B, which was written partly in response to the corruption charges against former DPW director Mohammed Nuru.

The report describes how the city administrator has come to control a huge range of city government programs. Its 26 functions have a combined annual budget of $923 million,and include nearly 3,000 full-time positions. Its constituent parts range from Animal Care and Control to the Department of Cannabis; Transgender Initiatives to The City’s 311 help line.

The Department of Public Works and the Department of Technology have their own line items in the budget, but are still overseen by the city administrator. That will change next year, as Proposition B is put into effect, and DPW and a new Department of Streets and Sanitation are spun off into their own separate agencies.

Chu says the mix of functions in her office is the result of historical circumstance. “There was a whole host of reasons why all of these different divisions eventually came to be within the organization,” including staffing capacity and a desire to create efficiency by centralizing the administrative and support services for small initiatives. The sprawling nature of the organization is also related to another one of city administrator’s mandates: coordinating major initiatives across city agencies. Chu says her office has been closely involved with The City’s COVID response, as well as efforts to boost the economic recovery and bring city employees and contractors back to work.

Carmen Chu, who took over as City Administrator in February, is reorganizing the department into four parts corresponding to related city services. (Sebastian Miño-Bucheli/Special to The Examiner)

Carmen Chu, who took over as City Administrator in February, is reorganizing the department into four parts corresponding to related city services. (Sebastian Miño-Bucheli/Special to The Examiner)

Many of the programs, initiatives, and departments overseen by the city administrator came under its authority on a de-facto basis, according to the report. Almost half (12) of the functions overseen by the administrator have never been formally codified as such in the City Charter or municipal codes.

The lack of formal chains of command can translate to a lack of transparency. Eight of the functions of the OCA “do not have specific mandated performance objectives or annual reporting requirements,” the report finds. And while 17 OCA functions have some reporting requirements to outside city or state officials, “the reports are not collectively tracked and catalogued by the City Administrator’s Office” and are not easily available online, according to the report.

These issues also apply to the OCA writ large, not just its hyper-specific functions. It’s not clear based on the City Charter and municipal codes “(t)he extent to which the city administrator functions independently or takes direction from the Mayor and Board of Supervisors,” according to the report. That stands in contrast to other big cities in California, whose city administrators have more explicit reporting requirements and chains of command.

Different OCA divisions have historically reported their progress in different ways, Chu says, with some directly issuing reports, some reporting through the budget process, and others doing so at hearings. “Some of the things that we need to be thinking about, given the budget analyst’s report are… engaging with policymakers to say, is this the kind of tracking and information that you find valuable, and then really trying to figure out a way to make sure that the reporting is consistently shared.”

The BLA initially intended to recommend reorganizing the department under three deputy city administrators, but ultimately walked back that proposal in light of the reorganization Chu is already undertaking by splitting the department into four parts under four deputies. The intent, which Chu says is “in line with” the BLA report, is to create a more logical division of labor among related programs, including asset management, contracting, technology and community services.

Another recommendation from the report is to merge some of OCA’s 10 programs or divisions that have 10 employees or fewer. It also recommends merging larger related programs like the Contract Monitoring Division and the Office of Contract Administration. While Chu says she’s open to those kinds of changes, she’s wary of “quick fixes” that neglect the long-term needs of The City. “The first step that we have is to pull these divisions together in this organized structure, so that we can start to see where the real connection points are.”

In addition to the internal reorganization already underway at the OCA, Chan is contemplating further legislative changes. “While it’s so great for The City to have someone like Administrator Chu, we cannot as a city, structurally, allow these changes to be dependent on one person.”

“If this city government, as we reopen the economy and move forward, does not function well, that’s going to be detrimental to our recovery,” Chan added. “This is not going to be months and months of conversation, this is going to happen rather quickly. We’re working very hard to identify those legislative solutions.”

Clarification: A previous version of this story misidentified the number of employees at San Francisco’s Contract Monitoring Division and the Office of Contract Administration have. Both departments have more than 10 employees.

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