Advancing Open Government in San Francisco

Allen Grossman
Retired lawyer Allen Grossman, who won twice at court against the Ethics Dept.
for Sunshine violations

Four Major Sunshine Victories

In a democracy predicated on the principle that citizens have inherent rights to know what their government is doing on their behalf, a City Librarian shouldn't be permitted to commit perjury by concealing violations of laws regulating disclosure of financial conflicts of interest. Nor should an Ethics Commission be permitted to hand itself a blanket exemption to avoid hearing complaints brought against its own staff and its Commissioners.

Nor should a Public Health Commission be permitted for over two decades to omit meaningful agenda item descriptions of discussions and actions it plans to take during its meetings. Nor should the same Ethics Commission be permitted to flout orders to produce public records required by State and local laws, and in the process rack up hundreds of thousands of dollars in wasted expenses during preventable Superior Court lawsuits.


Grossman's two Superior Court lawsuits have cost the City nearly $100,000, and mounting — all because of St. Croix's and Herrera's needless battles … in the name of government secrecy."

These four open government violations represent the epitome of utter contempt of voters, contempt for open government, and clear contempt of the public's right to know. These four violations — although not a whole host of other San Francisco government secrecy — have been stopped in San Francisco by another small group of dedicated citizens.

All four of the open government victories were against three Department Heads — at the Public Library, Department of Public Health, and the Ethics Commission — who all report to Mayor Ed Lee, and against the full Health Commission. The three department heads appear to collectively believe they're allowed to brazenly violate State and local laws, or are above the law. There will always be Sunshine Ordinance violators, because some City employees believe they may have something to gain from secrecy and obscuring the truth, and are motivated to do so.

Citizen's shouldn't have to file costly Superior Court lawsuits to assert their rights, and then be told by Deputy City Attorney's in court filings that San Francisco voters are powerless to adopt laws requiring that our local government officials disclose public records when the records merely involve communications with the City Attorney. That's a novel legal proposition, but it's thought to be unfounded and untenable.

The four open-government victories recently won occurred due to combined efforts of ten members of San Franciscans for Sunshine, including Peter Warfield, Executive Director of the Library Users Association; James Chaffee, a democracy advocate and former chair of the Sunshine Ordinance Task Force; Ray Hartz, Jr., Director of San Francisco Open Government; this columnist and Dr. Maria Rivero, a former senior physician specialist at Laguna Honda Hospital; Bruce Wolfe, a former Vice Chairperson of the Sunshine Ordinance Task Force; Derek Kerr, MD, the former LHH physician terminated for filing multiple whistleblower complaints involving the Department of Public Health and Laguna Honda Hospital; others; and most significantly, by Allen Grossman, a retired lawyer and prominent expert on San Francisco's Sunshine Ordinance and State records law who is being represented by lawyer Michael Ng, another expert and full-time litigator.

The chain of recent Sunshine victories presented below chip away at the secrecy preferred by career politicians in San Francisco's "City Hall Family" that is driven in large measure by the flawed legal advice provided by City Attorney Dennis Herrera and his top-heavy team of approximately 176 Deputy City Attorney's — who cost taxpayers a staggering $27 million in salaries alone in 2012, excluding fringe benefits of 30% to 40% — and who all too often appear to be struggling mightily against open government, and by extension, against San Franciscans.

City Librarian Fined by the FPPC

During its regularly-scheduled meeting on September 19, 2013, California's Fair Political Practices Commission (FPPC) accepted a written admission of guilt by San Francisco City Librarian Luis Herrera for his failure "to report gifts received from the Friends of the San Francisco Public Library on Annual Statements of Economic Interests [known as Form 700's] for calendar years 2009, 2010, and 2011."

The filing regulations for the Form 700 reports and accompanying statements stipulate the forms shall be signed under penalty of perjury, verified by the filer that they have used all reasonable diligence in preparation of the statements, and that to the best of their knowledge are "true and complete" financial statements.

Government Code §87300 — which resulted following adoption of California's Political Reform Act of 1974 — states, "Every person who signs and verifies any report or statement required to be filed under this [act] which contains material matter which he knows to be false, is guilty of perjury." Herrera was fined just $200 for each of three counts of violating disclosure laws, for a total of just $600, a small slap on the wrist for having failed to accurately report financial conflicts of interest he was required to report on the Form 700's under penalty of perjury.

Mr. Herrera — who serves as department head of a City Department and earned $218,387 in calendar year 2012 — was forced to formally acknowledge that he had unlawfully failed to report financial contributions he received from the Friends of the Library. Why have we heard not one peep about Luis Herrera's fine and unethical behavior out of his boss, San Francisco Mayor Ed Lee?

The FPPC complaint, filed by public library watchdog James Chaffee in April 2013, alleged that Herrera had repeatedly filed Form 700's declaring he had no donations to report on his Statements of Economic Interest when, in fact, research by whistleblower Ray Hartz and James Chaffee revealed Mr. Herrera had received at least $130,000 from the Friends in two of the three reporting periods. Both Chaffee and Hartz are long-time library advocates. Peter Warfield also provided research assistance, and widely publicized the FPPC case against Herrera.

It's not known why Mr. Herrera needed to augment his $218,387 City salary by accepting, but failing to report, significant gifts from the Friends of the Library. But it illustrates that city contractors and non-profit "Friends of" City department organizations are all too willing to buy influence at City Hall.

The FPPC's order against Herrera — referred to as a "stipulation" — didn't state how much in unreported gifts he received, but research by Hartz showed that the Friends of the Library had provided Herrera $66,000 in 2008–2009 and $65,000 in 2009–2010 for a "City Librarian's Fund."

Chaffee's previous research of the Friends of the Library's IRS non-profit tax reports and official reports of donations posted on the library's website, reveals that the Friends of the Library raised $36 million in the decade between fiscal years 2000–2001 and 2009–2010, but only donated a paltry $4 million to the library during the same period.

Mayor Lee's silence on Herrera's FPPC fine is as troubling as the Mayor's refusal to remove Library Commission president Jewelle Gomez, who was found by both the Sunshine Ordinance Task Force and the Ethics Commission in July 2011 as having violated the Sunshine Ordinance. The Ethics Commission recommended to Lee that he remove Gomez, a recommendation that our Mayor has studiously refused to implement for now over two-and-a-half years. Perhaps the Mayor is counting on seeking political support from Friends of the Library, Luis Herrera, Ms. Gomez, and other helpful library employees when he seeks re-election to a second term.

Preliminary research of just 12 of the approximate 60 City Departments reveals that just 611 (barely 5%) of 12,082 City employees are required to file Form 700's detailing potential financial conflicts of interest, but only 34 (5.5%) of the 611 are required to file their Form 700's with the Ethics Commission that the FPCC and citizens can access easily on the Internet. [Editor: The City had 36,761 employees in 2012, of which the 12,082 only represent roughly one-third.] The remaining 577 of the 611 employees (94.5%) are only required to file their Form 700's with their employing City Department — where they are harder to uncover, since not required to be posted on departmental web sites. It's unknown how many other Form 700 filers under-report financial interests on their Form 700's, as Luis Herrera so blatantly did.

But FPPC complaints can, and do, lead to fines against miscreant Department Heads such as City Librarian Herrera.

Ethics Tried Anointing Itself Sunshine-Exempt

Four days after the FPPC ruling against Luis Herrera, San Francisco's Ethics Commission blatantly attempted to exempt itself from a key provision of our local Sunshine Ordinance, but its proposal was stopped dead in its tracks on September 23 following testimony from members of a small group of thoughtful committed citizens known as San Franciscans for Sunshine, previously referred to affectionately as the "Sunshine Posse."

On Wednesday, September 18, an "interested persons" e-mail notice was sent by the Ethics Commission, announcing proposed changes to the Commission's Regulations for Violations of the Sunshine Ordinance ("Regulations") that Ethics staff claimed suddenly required modification just nine short months following implementation of the new Regulations on January 25, 2013.

The provision Ethics staff desperately wanted to suddenly alter involved referrals of complaints to the Ethics Commission that allege Ethics staff, Ethics Commissioners, or its Executive Director, John St. Croix, may have violated provisions of the Sunshine Ordinance.

Brazenly, St. Croix — who earned just $144,288 in 2012, as one of the lowest-paid City department heads — tried to muscle through the Ethics Commission's approval process on September 23 changes to its regulations that would have granted blanket immunity and an open-ended exemption for any complaint alleging that Ethics Commissioners or Ethics staff had violated the Sunshine Ordinance, along with a provision to simply return any referred complaint against the Ethics Commission to the originating referral entity, and take no further action on any such complaint.

St. Croix also wanted to change Ethics' rules that if a complaint is filed directly with the Ethics Commission (as opposed to a formal complaint being referred from the SOTF for enforcement) alleging violations of the Sunshine Ordinance by Ethics staff or commissioners, that the staff would simply inform the complainant of other legal remedies under State and local law — such as to the District Attorney, State Attorney General, or costly Superior Court lawsuits — and would also take no further action.

St. Croix's lame rationale was that "it has been a challenge to find other Ethics agencies that are willing to handle them in the Commission's stead. To avoid imposing such work on other Ethics agencies and to avoid any appearance of possible conflict, staff believes that informing the Complainant to pursue other available remedies would be the best measure."

Under questioning from his own five-member Ethics Commissioners, only four of whom were present on September 23, St. Croix admitted that there have only been "three or four" complaints alleging that Ethics Commission staff had violated the Sunshine Ordinance in the 20 years since it was adopted by the Board of Supervisors in August 1993 and amended by voters in November 1999. Given the low volume of complaints referred to Ethics alleging Sunshine violations by Ethics staff, there is rarely any "burden" imposed on other Ethics agencies, and Ethics has only had to face the "challenge" of finding other jurisdictions to hear complaints involving our own Ethics Commission just a handful of times.

Three Cases Against Ethics Commission Outsourced

One complaint against Ethics staff was filed jointly by Ethics Commission staff members Kevin De Liban and Oliver Luby in early 2004 against the Ethics Commission's then Executive Director, Ginny Vida, and Deputy Director Mabel Ng. Vida and Ng had ordered Luby — in violation of State law and San Francisco's Sunshine Ordinance — to destroy public records that had been mistakenly submitted to Ethics by the 2004 Newsom Mayoral Swearing-In Committee.

The documents involved campaign finance issues potentially damaging politically to newly-elected Mayor Gavin Newsom and his campaign treasurer, Jim Sutton. The documents revealed large payments under the heading "San Francisco 2004 Swearing-In Committee" to more than two dozen individuals, most of them then-salaried employees of Newsom's mayoral campaign, several of whom reportedly worked for Newsom's initial administration. They also showed a $54,000 payment to Newsom's mayoral campaign.

Ms. Vida eventually deleted the documents from Luby's computer, which most likely amounted to a misdemeanor or felony, never pursued against her.

The Ethics Commission forwarded Luby's complaint to the Oakland Public Ethics Commission's executive director for investigation, who eventually ruled against him. Five years later, Luby filed a Whistleblower complaint in May 2009 on an unrelated matter, which the City Controller eventually upheld; he had filed two other whistleblower complaints. But subsequently, Luby faced retaliation and was terminated in June 2010.

A second complaint against Ethics staff thought to have been outsourced to another jurisdiction was an anonymous complaint also filed in 2004 against Ethics' Deputy Director Mabel Ng, alleging that Ethics had proceeded with a special meeting of its Commission in violation of Sunshine Ordinance noticing requirements. The illegal special meeting appears to have paved the way for former City Supervisor Tony Hall's appointment as director of the Treasure Island Development Authority, which in turn allowed the Mayor's office to appoint Sean Elsbernd to Hall's former seat on the Board of Supervisors — and allowed Elsbernd to register for the November 2004 election as an incumbent, shortening the deadline for other candidate's to challenge Elsbernd, which effectively cleared the field for Elsbernd's first election.

A third complaint against Ethics staff outsourced to another jurisdiction involved a Sunshine Ordinance Task Force complaint filed on March 6, 2011 titled Patrick Monette-Shaw vs. Ethics Commission (Case 11014), which sought to obtain the Ethics Commission's closing memo of the Laguna Honda Hospital patient gift fund whistleblower complaint and the Ethics Commission's investigative file. The complaint also involved the failure to release correspondence between the City Controller's whistleblower program and the Ethics Commission, since Ethics and the City tried to assert that a so-called "official information" privilege applied to the entire file they wanted to keep totally secret.

But when the SOTF ruled in my favor on May 18, 2011 and referred the case to Ethics for enforcement, it was then outsourced not to an Ethics Commission or Sunshine body in another jurisdiction, but to San Jose's City Attorney's Office, which ruled against my complaint on September 6, 2012, 18 months after the complaint was filed in 2011.

All three of the Sunshine complaints filed against Ethics staff were found by the Sunshine Ordinance Task Force to have had merit, and each case was referred to Ethics for enforcement, but each of the three cases were outsourced to other jurisdictions. This illustrates that Ethics previously had not had a conflict-of-interest accepting referrals that alleged misconduct by Ethics' own staff, and illustrates there is rarely any "burden" imposed on other Ethics agencies, since it has occurred just three times.

Ethics' Sought Get-Out-of-Jail-Free Card

During public testimony on September 23, it became clear that St. Croix's proposal to grant a blanket exemption to Ethics to refuse accepting Sunshine complaints involving Ethics staff would have amounted to a get-out-of-jail-free card, but only for Ethics as the sole City department awarded an exemption from Sunshine. Former Laguna Honda Hospital physician Dr. Derek Kerr — who was eventually awarded a $750,000 wrongful termination settlement award regarding his dismissal for exposing the raid of LHH's patient gift fund — testified "Sunshine complaints against Ethics staff are rare. There's no need to dodge them." Kerr also noted there have only been three complaints made against Ethics' staff since the Sunshine Ordinance was adopted.

Former Sunshine Ordinance Task Force (SOTF) member Bruce Wolfe testified that the proposal to exempt Ethics staff would create a slippery slope, the Ethics Commission should not cherry pick which Sunshine complaints it will accept, and should not exempt Ethics staff, since no other City employee and no other City department is granted the same privilege.

Retired lawyer Allen Grossman testified that there is no exemption in the Sunshine Ordinance for the Ethics Commission, its Director, or its staff to be granted a blanket waiver. Grossman stated that the California Constitution governs, and the Ethics Commission could not adopt this exemption without violating both the Sunshine Ordinance and the State Constitution.

For my part, I testified that it is Ethics' responsibility to investigate Sunshine referrals sent to Ethics for enforcement involving cases against their own co-Commissioners.

Following thoughtful testimony from members of San Franciscans for Sunshine, the Commission sheepishly took no action and rejected St. Croix's proposed changes, quietly agreeing on September 23 not to adopt the proposed blanket waiver, handing St. Croix an embarrassing public defeat.

St. Croix has been the public face of the City's gluttonous attempts to scuttle open government ever since his appointment as Executive Director in 2004. During the past decade, he has been perceived as being instrumental to the City's efforts to thwart Sunshine and protect high-ranking City employees, often working hand-in-glove with City Attorney Dennis Herrera to implement government secrecy, rather than government transparency.

So it really comes as no great surprise that after the Ethics Commission went in to closed session on September 23 — to conduct St. Croix's annual performance review following its rejection minutes before of his bald attempt to hand Ethics broad blanket immunity from hearing complaints against Ethics staff — the meeting minutes indicate that when the Commissioners reconvened in open session, they attempted to smooth St. Croix's ruffled feathers.

Ethics' Vice-Chair, Paul Renne — husband of former City Attorney Louise Renne, who by report despises San Francisco's open-government Sunshine Ordinance even more than her successor, Dennis Herrera — stated that "it had been a rough evening on staff," apparently including on poor Mr. St. Croix. Renne stated on behalf of other Ethics Commissioners that he didn't want staff or St. Croix to take the public criticism to heart, and it isn't the way Ethics Commissioners feel. Renne suggested that the accusations [made during public comment] "were all unfounded comments." Ethics Chairperson Beverly "A Deer Caught in the Headlights" Hayon agreed with Renne; she congratulated St. Croix on his hard work and stated he shouldn't "take the comments personally or to heart."

Would that be St. Croix's decade of hard work blocking access to public records, his hard work dismissing all 39 Sunshine cases the Sunshine Task Force had referred to Ethics for enforcement, and his hard work protecting City department heads found violating the Sunshine Ordinance?

As Paul and Beverly tried to re-fluff St. Croix's mottled feathers, both of them more than likely had to have known (unless St. Croix hadn't shared news with the pair) that just five days earlier, lawyer Allen Grossman had filed his second Superior Court lawsuit on September 17 naming both St. Croix and the Ethics Commission as respondents for their failure to produce public records requested on October 3, 2012 that St. Croix appears to have improperly withheld, discussed below.

To be fair, when Hayon and Renne sought to reassure poor Mr. St. Croix on September 23 following closed session, although they may have known Grossman had filed his second lawsuit against Ethics, they had no way of knowing that a month later the Superior Court would rule on October 25 in Grossman's favor, largely over the same issue of improper withholding of records raised in Grossman's 2010 lawsuit. So much for St. Croix's "hard work" of withholding records, hard work rightfully overturned by a second Superior Court judge, who ignored St. Croix's disheveled feathers.

Superior Court's First Rejection of St. Croix's "Hard Work"

When Allen Grossman's first Superior Court case — Allen Grossman vs. San Francisco Ethics Commission, John St. Croix, and Richard Mo — was settled in Grossman's favor in February 2010, it represented a reversal of the Ethics Commission's assertion of exemptions for its investigative records and future Ethics Commission investigative files. His case in 2010 had asserted that none of the citations offered by the City Controller and the Ethics Commission had provided a valid exemption to the California Public Records Act permitting the withholding of previous records then sought by Grossman. Grossman was awarded $24,900 in legal fees and costs, likely because if the amount had surpassed $25,000, it would have required Board of Supervisors approval, which "negative publicity" the City wanted to avoid at all cost.

The City Attorney spent an additional $13,062 fighting Grossman's first Superior Court case in 2010, pushing the tab to nearly $40,000. In the end, the Ethics Commission was required to provide Grossman with approximately 150 documents that had been improperly withheld, most of which were the Ethics Commission's un-redacted and complete investigative files on approximately 14 cases referred by the SOTF to Ethics for enforcement, which Ethics had simply dismissed as unsubstantiated and refused to release, until Grossman filed suit in Superior Court, which concluded St. Croix had to cough up the records.

It's clear Paul Renne, Bev Hayon, and Herr St. Croix all need to be replaced at once, clueless about the abhorrent blanket exemption St. Croix attempted to cram through, stopped by citizen activists. Unless this trio wants to invite another Superior Court lawsuit challenging blanket Sunshine exemptions potentially granted to Ethics to skirt the law.

Health Department Finally Ordered Into Sunshine Compliance

Another open-government victory occurred on October 2 for two concerned citizens who had filed a Sunshine complaint against Department Head-level staff: Health Commission President Sonia Melara and Director of Public Health Barbara Garcia (who earned $259,921 in calendar year 2012). Melara and Garcia, per the Health Commission's By-Laws, are responsible for generating the agendas for Health Commission meetings. The complaint also named the full Health Commission as Respondents.

The Sunshine Complaint — Case # 13021, Patrick Monette-Shaw/Maria Rivero, MD vs. Public Health Commission, et al. — was filed on April 18, 2013, alleging that for two decades, the Health Commission had violated both San Francisco's local Sunshine Ordinance and the State's Brown Act, both of which laws require that meaningful agenda item descriptions be provided for each agenda item in order to alert members of the public of important policy discussions and proposed actions that may be discussed during any given meeting, so citizens can decide whether an agenda item is of sufficient interest that they might want to attend a scheduled meeting.

The basis of the Monette-Shaw/Rivero complaint featured a deficient agenda notice for the Health Commission's April 2, 2013 meeting, at which former LHH physician Derek Kerr was scheduled per a court order to receive a public apology for his wrongful termination and retaliation lawsuit, but which agenda had lacked any notice whatsoever that Kerr's public apology was to take place on April 2.

As egregious and unprecedented as it was for DPH to violate terms of Kerr's legal settlement agreement by failing to provide adequate agenda notice of the public apology mandated by Court order, thousands of agenda items over the past two decades have also contained only agenda topic titles. Lacking meaningful agenda descriptions, thousands of San Franciscans were deprived of knowing what their government via the Health Commission was doing, and to decide whether they might want to attend any given Health Commission meeting.

The Sunshine complaint should have been considered and heard by the Sunshine Task Force within 45 days from April 18; instead, the hearing never occurred until October 2, fully 167 days after it was first filed. Just 12 days before the Task Force hearing, Ms. Melara finally got around to providing a response to the complaint on behalf of the Health Commission on September 20 — fully five months after the complaint was filed.

"The Way We've Always Done It"

Comically, Melara tried to assure the Sunshine Task Force that the reason the Health Commission had failed to comply with both the Brown Act and the Sunshine Ordinance was because "that's the way we have always done it," as if past practices of how the Commission had always been done it could excuse violating the clear intent of both laws, and as if "past practices" can "trump" City and State laws to the contrary.

Melara hedged her bets, however — apparently with Ms. Garcia's tacit approval — saying in her response that if the Task Force ruled that the Health Commission had to begin including meaningful descriptions of proposed legal settlements, the Health Commission would certainly consider changing its past practices, but only by cherry-picking among agenda items it was willing to disclose.

What Melara didn't seem to understand was that both laws are very clear that every agenda item — not just legal settlements — have to contain a meaningful agenda item description. Melara, Garcia, and each of the Health Commissioners sign annual statements under the penalty of perjury that they have read the Sunshine Ordinance, which clearly states the requirements for meaningful descriptions for each agenda item. Ostensibly, the intent is that they not only read, but fully comprehend, the laws they are required to read under penalty of perjury, and incorporate while performing their official duties.

In an "instructional memo" sent to the Task Force on September 26 just four working days before the October 2 Task Force hearing, Deputy City Attorney Celia Lee — assigned to provide legal advice to the Sunshine Task Force — appeared to support every allegation that had been raised in this complaint.

Of the 108 agenda items listed on the Commission's 13 meeting agendas between January and October 2, 2013, 69 percent contained just agenda titles, with no meaningful descriptions at all. Of those 108 items, 22 were action-only items, 12 were discussion-only items, and 55 items involved discussion with possible action. Among agenda items since January that were never provided a meaningful description were topics addressing "Community and Public Health Committee," the "Community Health Improvement Plan," the "Community Independence Project," and "Proposed Amendments to San Francisco Health Code," all weighty topics, among others lacking any meaningful agenda descriptions.

Given notice in April 2013 of the Sunshine complaint against them, Melara, the Health Commission, and Director of Public Health Garcia made no effort during the intervening five months to begin correcting the problem. They just kept following their "past practice" behavior with impunity, even after having been placed on notice they were violating State and local law, apparently unwilling to change past practices unless ordered to do so by the Sunshine Ordinance Task Force.

After the SOTF ruled unanimously on October 2 that Garcia, Melara, and the Health Commission had violated, and were continuing to violate, the Sunshine Ordinance and Brown Act, the Health Commission finally started publishing agenda item descriptions. Unfortunately, the new agenda descriptions are weakly-worded and may remain ineffectual.

Second Superior Court Victory: Grossman vs. St. Croix

The Westside Observer's November 2013 editorial, "Court to Ethics' St. Croix: Cough Up the Records," announced Mr. Grossman's second Superior Court victory against St. Croix and the Ethics Commission. The editorial noted that the Court ruled Grossman, not Ethics, was right on the law. This was the second time Grossman prevailed in Superior Court against St. Croix and the Ethics Commission.

This time, the withheld records involve the Ethics Commission's Regulations for Violations of the Sunshine Ordinance ("Regulations"),which it adopted in November 2012 for implementation on January 25, 2013,

The Sunshine Task Force issues what are known as "Orders of Determination," ruling on the facts in Sunshine public access disputes brought before it. The Orders of Determination are frequently forwarded to the Ethics Commission for enforcement (although the Ethics Commission has very rarely enforced them, and instead, wrongly re-adjudicates the Sunshine Complaints all over again, and has dismissed nearly 100% of all referrals for enforcement, the referral of Library Commission president Jewelle Gomez to Mayor Lee being the rare exception).

For years, Ethics had used its separate Ethics Commission's Regulations for Investigations and Enforcement Proceedings" — regulations that were developed to address campaign finance and disclosure laws — to rule on access to public meetings and access to public records violations. Grossman and other Sunshine advocates had long argued that those regulations didn't govern Sunshine Ordinance open meetings and open records enforcement violations, and that the Ethics Commission needed new, separate regulations tailored to Sunshine matters, since the latter deal with public meeting access and public records issues, not campaign finance issues.

In 2009, the Ethics Commission finally agreed, and began drafting new stand-alone regulations to address referrals for enforcement from the Sunshine Task Force and complaints filed directly with the Ethics Commission alleging willful violations of the Sunshine Ordinance's public access provisions.

Four years later, the Ethics Commission still won't release related records, including draft versions of the proposed regulations and communications with the City Attorney's Office. Ethics initially worked with the Sunshine Task Force and held several joint meetings between the two bodies, seeking input to the new regulations. But that suddenly changed in September 2012 when the Ethics Commission published notice that its September 24, 2012 meeting would discuss yet another revised draft of the proposed regulations that had not been vetted with the Sunshine Task Force. Sunshine advocates objected to many of the proposed changes on September 24, but the Ethics Commission eventually adopted its new regulations in November 2012.

In an effort to seek additional information about the September 2012 final draft, Grossman placed a records request on October 3, 2012 seeking all prior drafts and the final version of the September 14 draft, and also requested the Ethics Commission's staff report. When the Ethics Commission responded to the records request on October 12, Grossman was notified that the Commission was withholding an untold number of other documents in their entirety, citing attorney-client privilege and two types of attorney work-product protections.

Because St. Croix had failed to identify each of the withheld public records, failed to provide a written citation to justify each withholding, and Ethics' assertion of privilege, Grossman filed a formal complaint with the SOTF on November 19, 2012. In response, during a SOTF hearing St. Croix again claimed the attorney-client privilege and attorney work-product protections, and asserted that merely citing the relevant code sections on a blanket, not case-by-case, basis was sufficient to satisfy compliance with requirements to provide written justification for each record withheld. But St. Croix was wrong on the law.

The Task Force held an extended hearing on Grossman's complaint during its June 5, 2013 meeting and issued its Order of Determination on June 24, ruling that St. Croix had violated two sections of the Sunshine Ordinance by improperly withholding records subject to disclosure. The Task Force ordered St. Croix to produce the records to Grossman. To date, St. Croix has failed to comply with the SOTF's Order of Determination.

Forced Into Superior Court

So Grossman was forced to sue St. Croix and the Ethics Commission for a second time in Superior Court to gain access to the improperly withheld records. In his initial 16-page Verified Petition for Writ of Mandate filed in Superior Court on September 17, 2013, Grossman asserted that none of the records he had requested were exempt from disclosure under either the California Public Records Act (CPRA) or under San Francisco's Sunshine Ordinance. [Note: A Writ of Mandate is a court order to a government agency to follow the law by correcting its prior actions or ceasing illegal acts. When a Writ is ordered, they are typically effective immediately.] St. Croix's refusal to provide the requisite justification for withholding and his misguided assertion of "privilege," also constituted a violation of law, since he and the Ethics Commission had a nondiscretionary, mandatory ministerial duty to comply with Grossman's records request, and to comply with the Sunshine Task Force's lawful Order of Determination.

In its Superior Court response, the City Attorney's Office submitted a 20-page Respondents Opposition to Petition for Writ of Mandate, on October 9, 2013 authored by Deputy City Attorney Andrew Shen.

It's the worst legal filing this columnist has ever had the displeasure of reading, since it starts out indicating Grossman's case "raises the question of whether a municipality's voters acting in their legislative capacity may, by ordinance, override the laws of attorney-client privilege and work product doctrine set forth in state statues and rules of professional conduct incorporated into a City charter."

That's complete rubbish — of course voters can! — but Shen's Opposition brief quickly went downhill from there. He painted a picture that the City Attorney couldn't fulfill his obligations to protect client confidentiality if a "mere" ordinance could bar City officials from asserting attorney-client privilege or from asserting attorney work-product privilege in a "broad swath" of unrelated legal matters.

Shen wailed that the City Attorney's ability to fulfill his mission of advising City officials would be seriously compromised. Shen wasted 10 of his 20 pages addressing attorney-client privilege and attorney work-product privilege issues to argue that voters can't enact restrictions on the City Attorney, ignoring that seven states have already abolished government attorney-client privilege, particularly when it only involves communications between a government attorney and his government client.

The reason these states have abolished government attorney-client privilege is due in large part to the diminished expectation of confidentiality in the public sector, and democratic values disfavoring secrecy in government. There is strong evidence — as St. Croix and Herrera must surely know — that suggests attorney-client privilege is not a necessity for effective communication between government officials and their attorneys, undermining any rationale that invoking this privilege in a government context is ever justified.

When the "client" is a government body, bestowing this privilege to it appears particularly perverse, since the privilege is then used all too often to withhold information from the very citizens the government body represents.

The strong public interest in seeking honest government and exposing wrongdoing by public officials is ill-served by allowing attorney-client privilege in inquires into actions of public officials. Many believe allowing City Attorney's to use attorney-client privilege as a shield against production of public records is a gross misuse of public assets.

Shen admitted that St. Croix had withheld 28 documents from Grossman for over a year, and announced that upon further review, four of the 28 — 14.3 percent — were "determined not to be subject to" either attorney-client privilege or attorney work-product privilege. The four documents were provided to Grossman on the same date Shen filed the City Attorney's response to Grossman's lawsuit in Court. Had Grossman not sued, St. Croix would have gotten away with withholding the four documents that weren't even legally privileged.

The "Work-Product" Canard

Indeed, Shen's separate Declaration effectively admits that none of the withheld records involved work-product; it appears they are simply attorney-client communications. Of the remaining 24 documents withheld, 15 documents, mostly e-mails, involve requests from the Ethics Commission staff to the City Attorney's Office for legal advice on the proposed Ethics regulations. The remaining nine appear to be City Attorney responses to those requests providing advice regarding the proposed regulations, including one dated May 6, 2010 that analyzed legal issues implicated by the Commission's proposed Sunshine regulations.

And Shen's Declaration — separate from his Respondents Opposition brief — says nothing about the work product doctrine, even though he goes on and on about work product in the Opposition brief. Shen's Declaration impliedly admits that the 24 documents that remain in dispute are subject to the attorney-client privilege, so none may be subject to work-product privilege.

Then Shen launches into an all-out attack on Sunshine Ordinance §67.24(b)(1)(iii), which simply states that any City Attorney communications providing "advice on, compliance with, analysis of, or an opinion" concerning CPRA, the Brown Act, San Francisco's Ethics Code, or the Sunshine Ordinance are public records subject to disclosure. Shen claims this section "purports to bar," the City from asserting attorney-client privilege and wrongly claims the City Attorney would be prohibited from providing legal advice to City officials, when in fact, this section only stipulates that any such legal advice to City officials are, by definition, public records that must be disclosed. It doesn't prohibit the City Attorney from anything — other than prohibiting withholding the records from disclosure.

But Shen twisted §67.24(b)(1)(iii) into something it is not, and railed throughout the remainder of his Opposition brief that the section attempts to "alter or limit the provisions of" the City Charter, and that this section of the Sunshine Ordinance cannot be enforced. In the Court Order handing Grossman his second victory against St. Croix, Judge Goldsmith denied Shen's request to strike down §67.24(b)(1)(iii), noting that this issue was not properly before the Court in Grossman's motion for writ of mandate.

Attorney Ng to the Rescue

In stark contrast to Shen's misguided and rambling Opposition brief, Grossman's lawyer Michael Ng submitted a brilliant rebuttal in his 14-page Petitioner's Reply in Support of Verified Petition for Writ of Mandate.

Ng began by noting Shen's claim that voters are powerless to adopt laws requiring that public officials disclose public records involving communications with the City Attorney, is unfounded, and untenable; Ng notes voters are the ultimate authority and can exercise plenary power over the City's legislative affairs. It's clear that Sunshine §67.24(b)(1)(iii) says City Attorney communications — from the outset — are not confidential, and that communications that were never confidential cannot be subject to the attorney-client privilege.

Ng then noted CPRA expressly authorizes local governments to adopt requirements like §67.24(b)(1)(iii) providing greater access to public records in order to shrink the islands of privacy [in a sea of government secrecy], by precluding San Francisco from invoking exceptions when the public records concern a narrow set of law relating to public records access itself. He also notes San Francisco voters expressly approved these "enhanced rights of public access to information and records."

Ng observed that the City — by extension City Attorney Dennis Herrera and St. Croix — has not challenged other provisions of §67.24 that also preclude San Francisco agencies from asserting other CPRA exemptions. It's clear to most observers that St. Croix and Dennis Herrera are not so concerned with §67.24 overall, as they suddenly are with the implications of §67.24(b)(1)(iii). Ng rightfully asserted Shen's contention that the latter citation would prevent Herrera from carrying out his City Attorney duties is a gross exaggeration, since that section merely provides that City Attorney communications regarding open government laws remain accessible to the public.

Why the City is suddenly seeking to strike §67.24(b)(1)(iii) from San Francisco's administrative code 20 years after it was added to the Sunshine Ordinance in August 1993 and adopted by voters in November 1999, isn't known. Observers suspect the City now wants it struck down simply because Grossman appears to be the first San Franciscan to have successfully sued for its enforcement in Superior Court. As long as nobody had sued for enforcement, the City appears to have let §67.24(b)(1)(iii) stand for 20 years.

St. Croix and Herrera brazenly asked the Superior Court to strike it down when Grossman found the chutzpah — referred elsewhere to as the "audacity of hope" — to challenge the shameless pair of Herrera + St. Croix in court.

Specifically, §67.24(b)(1)(iii) is "no more an attack on the attorney-client relationship than the Brown Act's mandate public meetings be conducted in the open," Ng declared. Indeed, the Brown Act mandates that most attorney-client communications with a local legislative body take place in open session, Ng observes. The Brown Act acknowledges the relationship between a local body and its attorney does not require secrecy when it is outside the context of pending litigation.

Dennis Herrera's Public Spanking

Ng acknowledged that St. Croix and the City Attorney had, in effect, asked the Superior Court "to create new law by carving out an exception to the express terms of the Sunshine Ordinance." San Francisco voters had decided such City Attorney advice must be provided in the open.

Ng notes that the City Attorney's blanket repeated assertions of privilege without providing any substantive rationale, may be evidence of the City's strategy of stonewalling and evasive responses. Individuals seeking public records under CPRA or the Sunshine Ordinance should not have to burden the Court to obtain compliance with either law.

At issue here is that the drafting of procedural regulations — such as the Ethics Commission regulations in Grossman's second lawsuit — is a legislative function. As such, it's a process that should be open to members of the public, including candid, honest, and complete legal advice in connection with the regulations, unimpeded by objections to disclosure.

When voters speak through the ballot box, any power to waive "privilege" dissolves, since City Charter §14.100 grants voters the power to enact initiatives, and the power to nullify measures involving legislative matters by referendum. Witness the November 5 election in which — by referendum — voters nullified the legislative decision of the San Francisco Board of Supervisors to grant the 8 Washington project a height exemption when voters rejected Prop C. And witness the voter's adoption of the Sunshine Ordinance as a valid exercise of their authority to enact an ordinance restricting the secrecy permitted at City Hall.

St. Croix's argument that the City Charter's designation of the City Attorney as his counsel somehow trumps the voters' specific adoption that certain records must be made public holds no water, Ng noted. Whatever relationship exists between a general provision of a City Charter and a detailed specific enactment by voters, the fact that the pertinent section at issue was authorized by express State law renders the debate of no significance.

Both St. Croix and Dennis Herrera had to have known that State law expressly permits adoption of stricter open records rules supersedes local law, since State law appears to supersede even City charters. The SOTF's Order of Determination against St. Croix and the Ethics Commission was a lawful, binding order, which the Superior Court had authority to enforce. So it did, handing St. Croix and Dennis Herrera an embarrassing public spanking.

Ordered to Comply, the City Appeals Instead

Judge Ernest Goldsmith's Order Granting Petitioner's Writ of Mandate in Grossman's favor, dated October 25, 2013 states that "the record shows that Respondents [St. Croix and the Ethics Commission] had not met their burden [proving] that the withheld documents are exempt under the [CPRA] and the San Francisco Sunshine Ordinance" [emphasis added]. Goldsmith reached the same conclusion that the Sunshine Task Force had reached on June 5 almost five months earlier, nearly a year after Grossman had been forced to file his Sunshine complaint.

Goldsmith noted that under the Sunshine Ordinance, public records regarding advice on CPRA and the Sunshine Ordinance are, in fact, subject to disclosure, citing §67.24(b)(1)(iii) as the basis. This had to have disappointed Mr. Shen and City Attorney Dennis Herrera. The judge noted Shen had conceded the 24 documents withheld from Grossman consist of requests from Ethics Commission staff for legal advice and the City Attorney's responses analyzing the legal issues.

Goldsmith ordered St. Croix to deliver the remaining 24 documents to Grossman. Goldsmith also denied Shen's request to strike §67.24(b)(1)(iii) from the City's Administrative Code.

Clearly desperate to stop Allen Grossman's victory due to potentially far-reaching implications should he prevail, the City filed a Motion to Stay the Superior Court's order in the Court of Appeals First Appellate District on Friday, November 22. The Appeals Court granted the Stay pending resolution of the writ proceedings on the same date, despite the fact that Superior Court Judge Goldsmith had ruled in the "trial court phase" that the City and St. Croix had not met their burden of proof that additional records St. Croix had withheld are exempt under the CPRA or under San Francisco's Sunshine Ordinance. It's somewhat surprising that the Appeals Court didn't give Grossman a chance to respond to the Motion to Stay before it granted Shen the stay.

The City's request for the stay of enforcement was unavailable at the deadline to submit this article to the Westside Observer for its December issue. So it's not yet known what new, creative legal theories the City and Mr. Shen may have introduced in their Stay to fight Grossman's Superior Court victory.

The Appeals Court may potentially dismiss the writ summarily, but it may also wait for a full briefing before deciding whether to dismiss the Superior Court's Writ. Hopefully, the Court will wait for a briefing. Grossman's court briefs responding to the Motion to Stay are due December 23, and the City's reply to Grossman's response is due on January 7, so it will take another two months before the Appeals Court rules on the City's appeal.

Meanwhile, St. Croix's Superior Court costs continue to balloon. A subsequent public records request has revealed that in Grossman's second Superior Court case, the City Attorney's Office has already racked up 213.5 hours of time at the Superior Court level, at a cost of $51,178 plus $145 in expenses, fighting Grossman over a mere 24 documents. Just through the Superior Court phase, that's $2,138 per withheld document — and growing, since it is not yet known how much Grossman's lawyer may request from the Court in attorney's fees, nor is it yet known how much the City will eventually rack up in costs fighting Grossman during the Appeals process.

Courts have noted the unique responsibility of government attorney's such as Dennis Herrera to not only serve the government entities he represents, but also the public interests of citizens he serves. Herrera appears to hold no obligation to the voters who elected him, or to his duty to provide transparency and openness in San Francisco's government. He appears to believe his sole responsibility is protecting City officials from exposure of wrongdoing.

To date, Grossman's two Superior Court lawsuits have cost the City nearly $100,000, and is mounting — all because of St. Croix's and Herrera's needless battles against access to public records. The wasted money — significant and unnecessary costs — is an obscene amount for City Attorney Herrera to spend in the name of government secrecy.

Dennis Herrera — who sought re-election on November 5 unopposed — just doesn't seem to get it that San Franciscans want more Sunshine and transparency from City Hall, not more secrecy from our City Attorney.

Monette-Shaw is an open-government accountability advocate, a patient advocate, and a member of California's First Amendment Coalition. Feedback:

December 2013

SF General Hospital rebuild showing progress
Progress at SF General's new Hospital and Trauma Center
does not include a dialysis center

Committed Citizens Changing the World

A Victory for SFGH’s Dialysis Patients

American cultural anthropologist Margaret Meade’s famous dictum — “Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it’s the only thing that ever does” — played out when citizens sought suspension of an RFP to privatize the Health Department’s outpatient dialysis center at SFGH by outsourcing it to a private company that would be required to build it out in a current “shell” in Laguna Honda Hospital’s (LHH) old, and questionably seismically-safe, buildings.


it was decided outpatient dialysis wasn’t considered an “essential” service.  The Health Department appears to have forgotten that dialysis is essential to the continued lives of its dialysis patients."

When the suspension of the RFP to outsource DPH’s dialysis services occurred unexpectedly during a Board of Supervisors hearing on October 17, it occurred because a small group testified why outsourcing dialysis to the private sector was a really, really bad idea.  Members of the Board of Supervisors opposed to privatization listened, and stopped the proposal.

Dialysis Privatization:  Dead on Arrival

The 40-plus citizens who attended the Board of Supervisors Neighborhood Services and Safety Committee hearing on October 17 presented compelling testimony regarding why dialysis services should remain on SFGH’s campus, rather than being privatized and outsourced to LHH, echoing many of the concerns first reported in the Westside Observer’s October article “Department of Public Health’s Dialysis Crisis.”

The group included family and patient caregivers, SFGH Renal Center staff, dialysis patients themselves, and other patient advocates.  No one spoke in support of relocating dialysis services to LHH other than hospital administrators. 

During the hearing called by Supervisor David Campos, SFGH’s Chief Operating Officer Roland Pickens asserted that dialysis services were not included in the plans for the replacement acute care hospital building now under construction because it was decided outpatient dialysis wasn’t considered an “essential” service.  The Health Department appears to have forgotten that dialysis is essential to the continued lives of its dialysis patients.  Supervisor Campos asked Pickens who had made that decision; Pickens indicated the decision had been made by the Mayor and Health Commission at the time planning for the SFGH rebuild bond measure was being developed.

In response to a direct question from Campos about whether the RFP to move dialysis had been discussed and voted on by the Health Commission, Pickens stated unequivocally that “Yes, it was” voted on by the Health Commission, which is a complete fabrication, since Pickens was fibbing.  Campos pushed harder, and asked again if the Health Commission had voted on an RFP to privatize dialysis services, and Pickens again claimed that from his recollection, it had been voted on.  More fibbing.

But as the Observer reported last month, the discussion to outsource dialysis to LHH was only discussed in the Health Commission’s subcommittee — the SFGH Joint Conference Committee (JCC) — in the Spring of 2012, with only the barest subcommittee “report back” to the full Health Commission.  The full Health Commission did not discuss the “report back” in any depth, and the full Health Commission has not scheduled a distinct agenda item regarding outsourcing SFGH’s dialysis services during the past two years of its meetings.

Before Pickens chose to fib, a records request for any vote of the Health Commission had already resulted in a response that there are no responsive records, indicating the full Health Commission never debated merits of the RFP and took no vote on whether to approve the dialysis privatizing RFP before it was issued.

Admission:  Not All Options Were Studied

When Campos asked Pickens whether the $5 million it will cost to build out dialysis at LHH could be better spent on renovations of SFGH’s campus to keep dialysis there, Pickens openly admitted SFGH had not looked at an option to spend that money on renovating space at SFGH.  When Campos asked whether any options had been considered to stay in the current vicinity, if not on the SFGH campus itself, Pickens claimed the City’s Real Estate Division had explored leasing space elsewhere, but none met requirements.  When asked if Real Estate had prepared a report about other options, Pickens said he would have to go back and look for that.

As the Observer reported last month, Director of Public Health Barbara Garcia had been asked by the Health Commission to submit a report of all viable options to keep dialysis services at SFGH.  According to a records request, it appears Garcia never provided the Health Commission — let alone the Board of Supervisors — with a report that had investigated all possible options to prevent moving dialysis services off of SFGH’s campus.

When the hearing explored the burdens of increased transportation times for vulnerable, sick dialysis patients who would have to travel further to get to LHH, Campos asked Pickens if the patients had been surveyed about the impact to their care.  Pickens answered “No, we did not.”  Campos asked “Why would you not talk to the [patients] who are going to be … the most impacted by moving” dialysis to LHH.  Pickens admitted that in hindsight, DPH should have done that, and that it was a mistake they made not surveying patients.  Pickens stated DPH will make sure they survey dialysis patients regarding transportation issues.  Pickens agreed with Campos that if a survey of patients reveals that moving dialysis to LHH is not the right move, DPH would “absolutely” reconsider its decision to move dialysis to LHH.

Campos noted how disrespectful it was to patients who were not consulted prior to release of the RFP.  Near the end of the hearing, Pickens apologized to patients that “we have not had a conversation with you.”

Even though Health Commissioners David Sanchez and Edward Chow had indicated in 2012 that transportation would be addressed in the RFP, Pickens admitted to Campos that transportation had not been addressed in the RFP, but that DPH “can go back and make [transportation] a part of the [RFP] process.”

Campos appeared incredulous that DPH had not performed any analysis of a potential decrease in revenue from other medical services if patients outsourced for dialysis then choose to receive other services — for example, vascular surgery, radiology, etc. — by obtaining those services from other providers, rather than returning to SFGH to obtain other primary and specialty-care services.  DPH is fully aware that it will be “competing” in the managed care arena for patients, so why it didn’t perform a cost-benefit analysis of potential unintended consequences of losing additional revenue is rather shocking.  In addition to the millions of dollars in lost dialysis revenue that benefits SFGH, DPH would also run the risk of losing additional millions from other medical services, but this appears never to have been studied.

Sadly, given DPH’s many highly-paid bean counters, it’s even more shocking that it didn’t occur to any of DPH’s or SFGH’s administrators and hospital administrators that they should ask the bean counters to run a lost-revenue “what if” scenario to estimate how much potentially-lost revenue might be at stake.

The “Fib” LHH Is Seismically Safe

Pickens also testified that DPH considers the space where dialysis would have been placed in LHH as seismically safe, despite the fact that the only seismic remodeling of LHH’s old buildings included replacing an unknown number of hollow-clay walls with concrete walls, but no lateral bracing for lateral shift during an earthquake.

When the hearing was opened for public testimony, the first speaker was Vivian Imperiale, a 10-plus-year former employee at Laguna Honda Hospital, who rhetorically asked who had decided that LHH was a suitable place for dialysis patients, given that voters were told much of the old buildings would be demolished as being seismically unsafe.  She noted a lawsuit may be waiting to happen if a patient receiving dialysis turns out to be a “sitting duck” injured (or killed) in LHH’s old buildings during an earthquake.  Speaking against moving dialysis services to LHH, Ms. Imperiale testified “Let us remember that change is not synonymous with improvement.”

Following testimony from a staff member of the Dialysis Center that showed life-safety regulations for fire sprinklers were relaxed in 2012, grandfathering buildings built before January 2008 to operate without them, Campos inquired whether that permitted DPH more flexibility.  Mr. Pickens replied that if that proves to be the case, SFGH might pursue it as an option to keep the facility right where it is currently located at SFGH.

In effect, should Mr. Pickens finds that this proves to be the case, the inescapable conclusion is that DPH didn’t consider, Barbara Garcia didn’t “explore” or report back on this potential option, and the Health Commission may not even have known of this option, given Garcia’s non-existent repot back concerning “all” options.

It was clear by the end of the hearing that Pickens understood that the Board of Supervisors wants to keep dialysis services on SFGH’s campus.  It also appeared clear that Pickens got the message that the Supervisors do not want DPH to come back with a replacement RFP now or anytime soon to move dialysis elsewhere.

Campos noted that the proposal to move dialysis to LHH appeared to conflict with the Health Services Master Plan that the City just adopted, noting that Master Plan Recommendation 1.1 meant to address social and environmental factors that impede or prevent access to optimal care, as the increased burden of transportation surely would.  Campos also noted that the RFP appeared to violate Master Plan Recommendation 3.1 meant to increase access to appropriate care for San Francisco’s most vulnerable patients.

At the end of the hearing, Supervisor Campos summed up by asking Mr. Pickens that, “In terms of clarity, does it mean that right now, the dialysis services will stay at the current center until a decision is made otherwise,” to which Pickens responded “Yes, we will suspend the [current] RFP process.” 

For further clarity, Campos then asked “So the process is suspended and you will not be making a decision to privatize [dialysis] services at this point?” to which Pickens replied, “That is correct.”  Campos then asked if a decision is made in the future to go down the route of privatization, whether there would be a separate and new RFP process, to which Pickens responded, “This is correct, absolutely.”

[Editor’s Note:  On October 22, shortly before the Observer was going to press for this November edition, DPH’s Contracts Office responded to a records request, announcing the dialysis outsourcing RFP was suspended as of October 22.  Patient advocates, and patients, would feel more comfortable if DPH’s announcement had indicated the RFP had been cancelled completely, not just suspended.]

Ms. Imperiale commends Supervisor Campos’ and Mar’s decision not to outsource and relocate the SFGH dialysis center off campus.  “The conduct of both Supervisors during the hearing demonstrated their ability to analyze proposals, ask very relevant questions, truly listen to impassioned testimony, and respect those who came forward to give public comment,” Imperiale says.

“Their professionalism, concern, and sound judgment were the epitome of what we like to expect from our elected officials,” she adds.

It was clear as the hearing was formally “filed” before adjourning, that any dialysis relocation plans have been put on hold and that the current RFP to move dialysis to LHH was completely dead on arrival.

At that point, a cheer went up in Board Chambers from the small group of 40 thoughtful, committed citizens who had just changed the world of dialysis patients treated at SFGH.

Monette-Shaw is an open-government accountability advocate, a patient advocate, and a member of California's First Amendment Coalition. Feedback:

November 2013

Department of Public Health’s Dialysis Crisis

’Round the Circle-Game We Go

PUBLIC NOTICE: Annual Meeting of the Public Health Commission at Laguna Honda Hospital

Adoption of LHH's annual report • Tuesday, October 15, 2013, 4:00 p.m.

Included: public discussion of the use of the former old buildings at LHH. Initially slated for demolition, there may be a discussion of reuse of the old "finger wings" for other uses rather than demolition.

The meeting will be held in the John Kanalry Meeting Center in the new new hospital's Pavilion Building; seating is limited..

For more than 46 years, dialysis services have been admirably provided on the campus of San Francisco General Hospital.  But in a move to privatize every public service it can, the City is making a dire mistake outsourcing dialysis to the private sector, and placing it at Laguna Honda Hospital.


The vast majority of dialysis patients treated
at SFGH are African-American, Hispanic, or
Asian/Pacific Islanders, most of them already
facing disparities in access to medical care."

Although the Department of Public likes to boast that it is “integrating” patient care between SFGH, LHH, and it’s many community-based clinics throughout the City, DPH is about to fracture the delivery of services for dialysis patients who have been treated on SFGH’s campus for nearly half a century, after the State of California first awarded a grant to UCSF’s Medical Center to establish the UC Renal Center at SFGH in 1967.

woman getting dialysisFollowing the dialysis center’s opening shortly after receiving the State’s grant, it has faced a growing circle of licensing and financial-loss problems, and then faced chronic indecision regarding its fate from UCSF, SFGH, the Department of Public Health, and mostly from San Francisco’s governing Health Commission.

Coming full circle, the decision to outsource dialysis services to an outside contractor and place a 30-chair outpatient dialysis center in Laguna Honda Hospital’s seismically unsafe old main buildings is extremely troubling, when not potentially dangerous to patient safety, as the Observer first reported in our September issue ("Squished Together: Misery Visits Company").

The Licensure Circle

After operating the UC Renal Center at SFGH for 33 years, the broader UCSF Medical Center notified SFGH in 2001 that it would no longer license the Renal Center at SFGH.  A year later, UCSF’s Department of Medicine at SFGH luckily stepped in and became independently licensed to operate the UC Renal Center at SFGH.  But a year following that, in 2003 UCSF’s Department of Medicine unsuccessfully tried to sell the facility, or partner with a private company, due to its financial losses.  So in 2003, the facility and its license were transferred to SFGH, and the unit was renamed the SFGH Renal Center, where it has operated for the past decade.

And during that same past decade, since Katie Worth published several articles in the San Francisco Examiner in 2004 about the chronic shortage of dialysis services all over San Francisco in both the public and private sectors, debate — and constant indecision and delay — has raged about placing dialysis services at LHH, despite initial plans to rebuild both LHH and SFGH without any dialysis services in either of the replacement hospitals.

A current Request for Proposals to outsource SFGH’s dialysis services specifically requires that the entity who is awarded a ten-year contract will be responsible for obtaining licensure to operate outpatient dialysis services at LHH.  As far back as 2007, the State agency that issues licenses for dialysis services prohibited long-term care nursing facilities from operating a dialysis center on site.  But in early 2007, the State Assembly quickly authored AB 214 to permit long-term health care facilities to provide chronic dialysis clinic services to residents of their facilities.  Notably, AB 214 did not authorize the skilled nursing and long-term facilities to operate outpatient dialysis centers, just services for inpatient residents.

By 2009, the State Assembly introduced AB 1544, to expedite approval of new outpatient clinics without a prior onsite survey, but the bill initially would have prohibited acute care hospitals, psychiatric hospitals, and specialty hospitals from providing new outpatient services for chronic dialysis treatment.  As AB l1544 wound through the State Senate, amendments to the bill on September 4, 2010 struck out the prohibition restricting outpatient dialysis services from the bill.

To our knowledge, LHH has never tried to obtain any license to provide dialysis services, and indeed, its current license and menu of “clinics” does not include inpatient dialysis.  Notwithstanding its lack of license for dialysis services, change orders were eventually approved during construction of LHH’s new facilities, adding a six-chair dialysis center that was built out on the promenade in LHH’s new Pavilion building, and dialysis chairs and equipment were purchased and delivered, although the small inpatient dialysis clinic has not opened in the three years since LHH moved into its new digs.  Many of LHH’s current and former staff were never informed the six-chair dialysis unit was even there waiting to be opened, but never was. As a result, LHH’s dialysis patients still endure being transported to SFGH’s Renal Center for treatment.

Sources report that despite the construction of a six-chair inpatient dialysis center in LHH’s new Pavilion building, former Director of Public Health Mitch Katz would not allow LHH to open it, for fear of taking away business from SFGH.  “Doctors don’t like losing dialysis patients because the business is very lucrative, and competition for Medicare patients is fierce,” a former LHH physician speaking on condition of anonymity notes. 

Similarly, LHH’s expansion of its acute physical medicine rehabilitation beds to 15 never panned out, as this reporter previously predicted might fail, because competition for acute rehab patients is also cut-throat among private hospitals.  LHH’s share of the acute-care physical medicine rehab patient pie typically hovers at an average of no more than two at any given time, given the fierce competition for Medicare Part A acute rehab patients. 

After receiving an additional $1.5 million or more annual budget increase to increase staff for a 15-bed acute rehab center planning to compete for Medicare Part A revenue that LHH’s Chief of Rehabilitation Services Lisa Pascual, MD asserted would occur —and which budget increase was approved by a beguiled Mayor and Board of Supervisors — LHH hasn’t been able to fill up more than half of its currently-licensed five acute rehab beds (not 15) at any one given time.  LHH has failed so far to increase its grasp of the acute-care rehab reimbursement pie.

Lamely, a presentation to the SFGH Joint Conference Subcommittee on February 14, 2012 presented by SFGH’s CEO, Sue Currin and others, claimed on the “Funding Plan” slide that the six-chair inpatient dialysis unit was dropped from LHH’s rebuild plans in 2008 due to the projected high operational costs.  But why would they have built out the six-chair unit and had the equipment delivered in 2010 if it had already been dropped in 2008?  Knowledgeable sources believe it was never dropped from the plans, but that Dr. Katz refused to let it open and Currin was merely spouting spin control in 2012.

The Really-Bad-Location Circle

There are a number of reasons why moving SFGH’s dialysis center to Laguna Honda is a really bad location.

First, and foremost, it will fracture the care of dialysis patients, who attend multiple primary- and specialty-care appointments at SFGH each month, in addition to their weekly dialysis sessions.  SFGH’s dialysis patients are among the most vulnerable in the City, suffering from ESRD, diabetes, congestive heart failure, cancer, HIV/AIDS, heroin addiction, and tuberculosis.  Many patients require multiple SFGH-based clinic appointments, along with their three- to four-hour dialysis treatments three times a week.

The vast majority of dialysis patients treated at SFGH are African-American, Hispanic, or Asian/Pacific Islanders, most of them poor people already facing well-known disparities in access to medical care.

SFGH is the only dialysis unit in the city that accepts patients on gurney’s and from other community skilled nursing facilities who cannot ambulate due to quadriplegia, stroke, and vascular disease.  It is also the only dialysis unit that accepts patients with aggressive behavioral issues who have failed at, or have been terminated by, other dialysis units in the City, and it is the only dialysis unit that accepts incarcerated patients needing dialysis who have lost medical insurance once in jail.  It is the only unit in the City that dialyzes behavioral health patients (e.g., schizophrenia) and those requiring 24-hour care at SFGH’s secure facilities, since attempts to dialyze them at other units were unsuccessful, disruptive to other dialysis patients and staff, and costly, incurring both transportation costs and costs of safety “sitters” to accompany patients.

SFGH’s Renal Center dialyzes patients who can’t be referred to private centers, including those with paralysis, those on breathing tubes, and those who are ineligible for insurance.

In December 2011, SFGH’s Renal Center received additional funding to staff a fourth evening dialysis shift specifically to address the problem of uninsured patients who are kept in the hospital at huge expense, because no other units in the City will accept them and the Renal Center did not have open chairs.

What will happen to all of these patients, since there is nothing in the RFP that stipulates that the vendor awarded the contract to operate a dialysis center at LHH will be required to accept these types of patients?

Moving the service to LHH will require these patients to obtain care at multiple locations, fragmenting their care between locations, and increasing the odds that they may end up admitted to SFGH’s emergency room.  Many dialysis patients see multiple providers at SFGH during their dialysis visits, so they may end up making multiple trips to different campuses each week to receive fragmented care.

Second, the current Renal Center at SFGH formerly used ambulance transport when patients experience a medical emergency during dialysis treatment.  Then, Renal Center staff learned they could use SFGH’s “Medical Emergency Response Team” (MERT), to use wheelchair transports from Ward 17 in Building 100 where the Renal Center is located, to transport patients by wheelchair quickly to the SFGH's E.R. along hallways in SFGH’s current main hospital in Building 5.

But there is no MERT at LHH, and the best LHH may offer be able to offer is use of its medical-staff Code Blue Team, who will have to travel a long distance on LHH’s campus from the new buildings were they see patients, over to the old main building where the outpatient dialysis center is proposed to be placed on the third floor.  Alternatively, should patients Code Blue during dialysis treatment at LHH, following a delay in calls to 9-1-1, not only will there be an increase in fire alarms going off, the Fire Department station on Olympia Way behind LHH has no access road to LHH, and fire engines will be a three-minute ride away, barreling down Clarendon Avenue sirens ablaze, then along Laguna Honda Boulevard, before they can turn onto the grounds of LHH.  If a Code Blue patient needs transport to the E.R. at SFGH, factor in at least a 10- to 15-minute trip to Potrero Avenue, causing further delays in care en route

It is thought that SFGH’s MERT team is summoned to its Renal Center an average of three to four times a month for emergency transport, and Code Blue’s occur about six times annually.

Third, moving dialysis services to LHH will exacerbate transportation burdens.  Studies have long documented that patients have poorer outcomes the farther they have to travel to a dialysis center.  MediCal no longer reimburses for van transportation, although MediCare does (and it is thought about 40 percent of SFGH’s MediCare patients are quickly referred to other off-site dialysis centers, and aren’t in SFGH’s on-site dialysis patient mix).  Anthem Blue Cross, which provides managed MediCal, does not reimburse for transportation, nor does it reimburse for some dialysis-related medications.  It is not yet known whether the San Francisco Health Plan or the separate Healthy San Francisco programs cover transport costs.

Presentations made by DPH to the full Health Commission in February and April 2012 document that of 97 dialysis patients being treated at SFGH, 33 rely on public transportation, only 40 had an “entitlement van,” 4 rely on gurney transport in an ambulance, three walk, 12 have private cars, one is transported from jail by the Sheriff, and 4 were behavioral health patients presumably at SFGH’s Mental Health Rehab Facility at SFGH. 

Worse, DPH’s presentation also noted that of 33 dialysis patients treated at SFGH who rely on public transportation, fully 26 (79 percent) reside in five zip codes in the Inner Mission, Bay View-Hunters Point, South of Market, Outer Mission, and Tenderloin neighborhoods, who will face an increase of 2.3 to 3.8 miles in public transportation to LHH, presumably with longer transit times, particularly from the Inner Mission and Bay View-Hunters Point.

As far as that goes, of the 97 dialysis patients seen at SFGH, fully 86 (89 percent) are from these same five neighborhoods, plus Bernal Heights and the Excelsior.  Of SFGH’s additional 132 patients treated off site in the community, fully 98 (74 percent) are from these seven neighborhoods.  Whether the 132 use public transit or other transportation, they will all face longer transportation times, in addition to their three- to four-hour dialysis treatments — assuming there are no delays in treatment that may affect missing scheduled van transport times for return home. 

Patient advocates fear SFGH’s dialysis patients may not be able to endure two-hour bus rides, three times a week for dialysis.

Data in the presentation to the Health Commission is echoed by dialysis caregivers throughout the City.  SFGH Renal Center staff have testified at Health Commission meetings that 90 percent of their patients live on the East Side near SFGH.  They testified that the Laguna Honda site will pose access issues for Renal Center patients, all of whom receive primary and specialty care at SFGH.  They don’t believe any SFGH outpatient services should be moved to LHH. 

They note moving the Renal Center to LHH will mean increased van, car, ambulance, and pedestrian traffic in the LHH neighborhood.  With just 99 dialysis patients treated three times each week (assuming that dialysis patients currently treated at community sites will remain where they are, despite DPH’s hope to move them to LHH, which likely won’t happen), there would be fewer than 198 round-trip transports three times each week, but there will still be a high number of vans running through the LHH neighborhood daily, which increase in traffic may not have even been considered when the Environmental Impact Report was prepared prior to construction of LHH’s replacement facility.  This excludes SFGH’s 132 patients who are currently served off-site, and may or may not be forced to switch from community-based dialysis clinics, to LHH, which may exacerbate their transportation problems, and who may also be forced to change their nephrologists.

During testimony at the SFGH Joint Conference Subcommittee meeting of the Health Commission February 14, 2012, one member of the public testified that LHH was too far away, which may deter patients from getting the appropriate care; he read a letter into the meeting minutes from a medical transport company who stated that it can’t afford to transport patients to LHH due to lower reimbursement rates from MediCare.

The Chronic Indecision Circle

There has been little to no public discussion of the pros and cons of outsourcing SFGH’s dialysis services to LHH.

There has been no substantive discussion of the RFP to move dialysis to LHH at the full Health Commission.  In response to a records request placed by this columnist on September 14, 2013, Health Commission Executive Secretary Mark Morewitz responded that there were no responsive documents to a records request for any “Resolution” adopted by the full Health Commission authorizing DPH to issue an RFP to outsource and privatize the Renal Center at SFGH and relocate those services to LHH. 

Nor were there any responsive records for meeting minutes of the full Health Commission in which it formally approved DPH’s proposal to relocate the dialysis services to LHH.  Morewitz also noted that there were no responsive documents to a request for any DPH budget initiative forms to eliminate dialysis services; he indicated no reductions have been made to the DPH outpatient dialysis budget.  At least not yet.

Mr. Morewitz creatively tried to assert that DPH’s “outpatient dialysis services located at SFGH are currently  ‘outsourced’ to UCSF.”  But it is thought that he’s stretching the truth, because the license for SFGH’s Renal Center resides with SFGH, not with UCSF.  Although the Renal Center is staffed with UCSF employees, so are large areas throughout the SFGH medical center campus, and the employees are staffed under a so-called (and financially lucrative) “Affiliation Agreement” with UCSF, which is typically afforded cost-of-living and cost-of-doing business budget increases each year funded by DPH’s budget through the City’s General Fund.  Unlike the Affiliation Agreement now in place to staff the SFGH-licensed Renal Center, the pending RFP will actually outsource the entire operation, including licensure, to an outside entity, even though the UCSF Department of Medicine’s Nephrology Division will retain control of “medical direction” for any outpatient dialysis center at LHH.

Morewitz did, however, send along minutes of the Health Commission’s SFGH Joint Conference Subcommittee meetings on held on February 14, 2012 and April 10, 2012.  Scattered throughout both SFGH JCC minutes, Health Commissioner Sanchez, PhD and Commissioner Ed Chow, MD, repeatedly requested that DPH “explore all possible options and postpone the release of the RFP [to move dialysis to LHH] until Director [of Public Health Barbara] Garcia reports back to the SFGH JCC regarding this issue.” There’s no indication Ms. Garcia ever reported back. 

For his part, Sanchez requested on February 14 that “DPH consider exploring other options so that outpatient dialysis services could remain on the SFGH campus, and another unit could be located at LHH” in order to continue serving safety-net patients if outpatient dialysis is moved to LHH.  Despite postponing release of the RFP, it appears to have been issued, apparently without the requested report back from Garcia.

The minutes of the full Health Commission on April 17, 2012 report the SFGH JCC was “hopeful” a solution could be found regarding appropriate transportation to the new site for [dialysis] patients” at LHH.  This followed Dr. Chow’s helpful “suggestion” to ensure patient transportation be “part of the plan” in the SFGH JCC’s minutes of April 10, 2012.  Unfortunately, the RFP to outsource dialysis to LHH mentions not one word about transportation issues, and the issue appears to have never crossed the lips of Barbara Garcia and the Health Commission before the RFP was issued, unless such conversations occurred behind closed doors, out of ear-shot and oversight of members of the public, and the very dialysis patients DPH purports to serve.

For her part, Health Commission President Sonia Melara said not one word about the issue on February 14, 2012, unless Morewitz elided her oral remarks from the “Commissioner Comments Follow-Up” section of the JCC’s published minutes.  Melara, employed by St. Francis Hospital, may fully understand not wanting to divert lucrative MediCare dialysis patients from private sector providers vying for the fierce competition for dialysis revenue.  She also holds an appointment as the Health Commission’s representative on the Board of Directors of the San Francisco Public Health Foundation, which also may be eager to preserve lucrative business for private-sector hospitals.

Fast forward to the SFGH JCC’s meeting on April 10, 2012.  Once again, SFGH CEO Sue Currin presented a PowerPoint presentation to the JCC about outsourcing SFGH’s Renal Center.  The April 10 minutes also report in the Commissioner Comments/Follow-Up section show that Commissioner Chow asked for “clarification on the reason for the timing of the review” of the [outsourcing] issue.”  Chow asked if DPH and SFGH had spoken “with UCSF about the Mt. Zion option or about the RFP [to outsource to LHH].”  Cathryn Thurow, a UCSF Assistant Dean reported there had been no direct conversation with Mt. Zion, but indicated another UCSF Associate Dean — Dr. Sue Carlise —  had spoken to UCSF administration and had “heard favorable feedback about it [UCSF] applying for the [LHH dialysis] RFP.”

Commissioner Sanchez again stated he was “very interested” [apparently as a UCSF employee himself], in “SFGH/DPH pursuing dialogue with the UCSF leadership,” about any potential for UCSF “to combine renovations of the SFGH and Mt. Zion outpatient renal centers into one project to alleviate the need to move the unit out of SFGH.”  A week later, on April 17, in a summary report of JCC Committee reports to the full Health Commission, Sanchez commented that the goal is to find a safe facility to provide dialysis services, and that he “would like the SFGH campus to be part of a solution in regards to final plans for DPH’s outpatient renal services.”

Once again, minutes of the April 10 SFGH-JCC meeting and the April 17 full Health Commission meeting report not one peep out of Ms. Melara or Ms. Garcia. Sanchez must surely know that LHH is really not a “safe” facility.

Given the Health Commission’s and DPH’s indecision about where to place outpatient dialysis services to serve SFGH patients, the most obvious solution the City studiously ignored is right under their noses, suggested by UCSF employees staffing the Renal Center at SFGH:  Delaying the RFP and moving the dialysis center into SFGH’s current Acute Hospital in Building 5 in which approximately 140,000 square feet of space will become vacant, and available (turf desperately being fought over), when SFGH’s new hospital under construction and nearing completion vacates Building 5, which is far more seismically safe than either the Renal Center’s current location in Building 100, or LHH’s almost-as-ancient seismically-unsafe buildings, as the Westside Observer noted in the September issue, and certainly much larger than the 8,500 square-foot space being proposed for dialysis at LHH.  SFGH is where the Renal Center should be located, in order to provide the most seismically-safe, life-safety location, since LHH isn’t.

Renal Center staff suggested that since SFGH plans to move its Rheumatology, Dermatology, and other “clinics,” into the vacated space in Building 5, the logical choice would be to find room in Building 5 to move the Renal Center into, too, given the many co-morbidities facing dialysis patients who would benefit by not fragmenting locations of care.

Commissioner Chow, having asked Garcia and SFGH to consider “all options,” never commented on an option to move the Renal Center to Building 5.  Indeed, the Health Commission appears never to have discussed in public meetings, that Building 5 might well be the best location.

For his part, Commissioner Chow was reported in the SFGH-JCC’s February 14, 2012 meeting minutes as having requested that DPH explore not only all “possible options,” but that DPH postpone release of the RFP to move dialysis services to LHH until Director of Public Health Garcia reported back to the SFGH JCC regarding this issue.

For her part, Director of Public Health Garcia is not mentioned in public records as having presented a report-back to the Health Commission regarding all options considered before release of the RFP, including an option to move the Renal Center to Building 5.  There’s no public records, apparently, that Garcia ever “reported back” before the RFP was issued. 

As if the Health Commission didn’t observe that Garcia had gone missing in action, or AWOL, providing the requested report-back.

Perhaps Garcia presented a report-back in a closed-door session of the Health Commission, or by e-mail to Health Commissioners.  But dialysis patients, patient advocates and caregivers, and members of the public never heard in public meetings, any or all options the Health Commission requested be explored, or that Garcia may, or may not, have presented.

All along, the Health Commission, DPH, SFGH, and LHH have played a really bad circle game, delaying for long over a decade, decisions on how to provide life-saving dialysis services to San Francisco’s most vulnerable patients.

The “Life Safety” Canard

Over a decade ago, then Dr. Talmadge King, who oversaw medical services at SFGH, was quoted in the San Francisco Bay Guardian (“Kidney punch,” October 6, 2002) that “There aren’t enough dialysis spots in San Francisco, and we’re very worried about that.”

Considering the glacial speed of rebuilding the Bay Bridge following the Loma Prieta earthquake, and the endless delay of building a safety barrier on the Golden Gate Bridge, a decade-long delay in planning for caring for increasing numbers of MediCal-reliant dialysis patients in San Francisco is not be too surprising and was almost predictable.

The claim is that SFGH’s Building 100 is not life-safety compliant due to lack of sprinklers, fire alarm speakers, and smoke alarms, and may have an open stairwell in the building that doesn’t have a fire-wall door.  Ms. Currin’s April 2012 PowerPoint presentation to the Health Commission noted getting the fire safety deficiencies, sprinklers, and alarms up to Life Safety code would cost a mere $636,000, and other improvements another $331,000, for a total of less than one million dollars.  Add to that another $5.5 million to correct the elevator’s ADA access deficiencies — which SFGH has long delayed bringing into ADA compliance and should have been upgraded by now, and which expense it will eventually have to bend over and cough up — for a total of just $6.5 million.  This is chump change, which DPH surely has.  SFGH’s Renal Center could stay right where it is, and prevent the fragmentation of dialysis patient’s care.  It is thought that the increased costs of transportation could have easily funded the first million to correct Life Safety code deficiencies in Building 100.

But the area proposed for dialysis at LHH also reportedly has an open stairwell — admittedly at the opposite end of the third floor hallway — that also does not have a fire-wall door.  And a former staircase immediately adjacent on the right to the entrance area where the LHH dialysis center will be housed, has been removed during reconstruction, limiting egress from the building to a central staircase a good 100 to 200 feet away, at minimum, from the proposed dialysis space, and the open stairwell further down the hallway.

As with the debate of getting CPMC patients out of a third-floor location, getting dialysis patients in wheelchairs, on gurneys, and using other assistive devices down two flights of stairs at LHH during an emergency hasn’t been discussed openly, least of all by the Health Commission.  The best life-safety location appears to be in Building 5 — SFGH’s current main hospital — that the Health Commission seems to have forgotten even exists as the best, obvious option, since it is far more seismically safe than either SFGH’s Building 100 or in LHH’s old buildings.

The Other Canards Circle

In addition to patient advocacy concerns about the wisdom of increasing transportation burdens on vulnerable dialysis patients by shunting them to LHH, there are other canards involved.

First, DPH claims insufficient space at SFGH to meet the growing demand of Safety Net patients.  DPH ignores the 140,000 square feet of space that will become available in Building 5 in which to “grow” Renal Center space in a centralized care location on the same campus where it has operated for 46 years.

Second, although DPH claims the Renal Center will grow from 13 to 30 chairs by moving it to LHH, dialysis staff have questioned this assumption, since in order to be profitable, the contractor awarded the RFP to operate at LHH will more than likely limit the number of chairs it will contract to DPH to probably 15 chairs, reserving the rest for privately-insured patients in order to develop a payer mix to meet revenue projections and remain profitable.  It’s unlikely the 13 current “chairs” will grow by much if the vendor chosen restricts the number of chairs contracted for DPH clients to 15.

Given current trends, the dialysis patient population is expected to grow significantly, and San Francisco will need more and more dialysis chairs to served MediCal patients, not less.

Third, DPH’s April 10 PowerPoint presentation to the Health Commission indicated that the “current plan is to issue [an] RFP for either a private or non-profit provider.”  Health Commissioners Chow and Sanchez stated several times they expected a contract would go to a non-profit provider.  Elsewhere, patient advocates were assured the RFP was being developed to award the contract to a non-profit provider, but that restriction wasn’t in the RFP eventually issued.  According to a DPH contracting officer on September 25, the only three companies to submit a letter of intent by the August 26 deadline making them eligible to bid on the RFP were from Dialysis Clinic Incorporated (DCI); Satellite Healthcare, Inc.; and DaVita HealthCare Partners, Inc.  Only the first two are non-profits; DaVita is a for-profit company.  In 2012, there were reports that two for-profit dialysis chains in San Francisco have pending legal actions against them for submitting false billing claims, over-using anemia drugs, and for using dialysis machines associated with infection and death.

CPMC’s Dialysis Center is now outsourced to Da Vita, which by report has denied patients oxygen, substituting re-circulated air because it’s free.

Fourth, of great concern, the RFP restricts the hours of operation for dialysis at LHH to Monday through Friday from 6:00 a.m. to 6:00 p.m., and will exclude holidays “generally recognized by the City.”  But SFGH’s Renal Center currently operates from 5:30 a.m. to 8:00 p.m. Monday’s, Wednesday’s, and Fridays, and is open from 5:00 a.m. to 6:00 p.m. on Tuesday’s, Thursday’s and Saturday’s.  In effect, the RFP’s restrictions will eliminate at least 26.5 hours of dialysis treatments weekly by curtailing the hours of operation.

Another potential problem may involve water.  Hemodialysis requires a lot of water, and water treatment.  There are unavoidable leakages, with water flowing down hill into areas below any dialysis unit not located on a ground floor.  This may be a problem at LHH, if there is water leakage from a third floor dialysis unit down to Moran Hall on the second floor, or Gerald Simon Auditorium and the Chapel on the first floor.  After the $600,000 mold problem that resulted from water leakage in LHH’s new Pavilion Building that the Observer reported in our July issue (Of Mold and Men), you’d think LHH would be more cautious about projects with potential water leaks.

Some observers note that violence in dialysis centers is on the rise, and are worried that the RFP says the City will provide building security only at levels currently provided.  Other concerns are whether the vendor awarded the contract will have to pay additional rental under the lease if they decide Saturday hours will be needed to meet increases in demand for dialysis services.  The RFP also stipulates that electrical usage in excess of the operating hours will also have to be reimbursed by the tenant for any electrical consumption overage.

DPH claims that operating the Renal Center at SFGH results in a mere $9,063 annual revenue loss, mostly from the $20,000 monthly it spends on out-of-network costs for SF Health Plan patients unable to be accommodated in its current location who are referred to external providers.  DPH also claims revenue to the vendor awarded the contract to outsource dialysis may potentially earn $1.25 million annually operating a 30-chair dialysis unit at LHH.  SFGH Renal Center staff who have testified before the Health Commission have noted that outpatient dialysis is a revenue generator for SFGH, and outsourcing it will result in the loss of millions of dollars in revenue for SFGH and DPH.

Some observers believe UCSF and SFGH and DPH are simply fudging their facts.

As with the dumping-of-the-elderly problems reported in “Who’s Dumping Grandma?” in the Observer’s June issue, and the dumping-of-mental-health-patients problems reported in “Squished Together: Misery Visits Company” in the Observer’s September issue, it now appears that DPH is dumping dialysis patients over to LHH principally to increase DPH’s revenue under implementation of Obamacare, by swapping out dialysis revenue for the much more stable revenue it will generate by renting out floor space at LHH to an outsourced vendor, dialysis patient’s outcomes be damned. 

Welcome to the circle game, which may be a close second-cousin-twice-removed relative of the circle jerk phenomena at the 2012 Democratic National Convention in Charlotte, North Carolina described by the New York Times Magazine’s chief national correspondent, Mark Leibovich, in his new book “This Town” on the New York Times’ current best-seller list.

The No Public Hearings Circle

One remaining question is whether Supervisors David Campos and John Avalos will step up to the plate to have the RFP cancelled, reconsidered, and potentially put out for re-bid, if space cannot be located in Building 5 at SFGH.  After all, that vacated space will open up just about the same time that a dialysis center at LHH would open up.  The two Supervisors should schedule a hearing to discuss the pros and cons of moving dialysis services to LHH, adversely affecting health outcomes for their constituents.

The two members of the Board of Supervisors successfully forced Mayor Ed Lee into re-negotiating with CPMC to build its Cathedral Hill Hospital on Van Ness Avenue by forcing CPMC to also rebuild St. Luke’s Hospital in the Mission to prevent the loss of vital, accessible healthcare services to particularly vulnerable East Side residents. 

The question now is whether Avalos and Campos might step in to prevent the loss of services to patients in the Mission, Bernal Heights, Excelsior, and the Bay View Hunters Point neighborhoods, among others, who would face having their dialysis care outsourced and fragmented to LHH, where the circle-game may come full circle.

After all, if the Health Commission’s Executive Secretary Mark Morewitz is correct — which he is probably not — that the SFGH Renal Center has been “outsourced” to UCSF, a private hospital, despite SFGH actually holding the license for operating it using UCSF staff under is ‘affiliation agreement,’ then the Health Commission should have already conducted what is known as a “Prop. Q” hearing to determine whether a private-sector hospital’s abandonment of services will have an adverse, negative effect on the health of San Franciscans.  Such a hearing requires a vote by the full Health Commission for private hospitals.

Alternatively, if SFGH decides to reduce the availability of on-site outpatient dialysis services, the County Board of Supervisors are required to hold what is known as a “Bielenson hearing,” which State law requires whenever healthcare services will be reduced at a given County location, or when the transfer of management of a County-operated healthcare facility is being considered, notice must be posted on the entrance doors of the affected facilities, and County supervisors are required to hold a public hearing.

Neither a Prop. Q hearing, nor a Bielenson hearing, have been held to date.  One or the other — or both must apply. 

It’s time for Supervisors Avalos and Campos, and other Supervisors, including District 7 Supervisor Norman Yee, to interrupt this circle game void.


Monette-Shaw is an open-government accountability advocate, a patient advocate, and a member of California’s First Amendment Coalition.  Feedback:

October 2013

Laguna Honda Hospital and SFGH

Squished Together: Misery Visits Company

Given San Francisco Department of Public Health's stated budget goal of maximizing revenue in anticipation of implementation of Obamacare, it's probably not too surprising the department decided to squish patients out of its Mental Health Rehabilitation Facility at SFGH, squish them into Laguna Honda Hospital or out-of-county, squish non-ambulatory elderly two-to-a-room into the spaces converted into housing at the MHRF, and squish outpatient dialysis services into Laguna Honda's decrepit old buildings.

Then came the shocker. After all the squishing, Mayor Ed Lee rewarded the Health Department a budget increase of $200 million, pushing the department to an almost $2 billion-a-year budget.


Despite the Supervisors being told by Director of Public Health Barbara Garcia that the 34 patients in the MHRF would be relocated to Laguna Honda Hospital or 'placed in the community,' it turns out this reporter's concerns that patients would be dumped out of county has, in fact, occurred. The Supervisors never asked what 'in the community' meant, so DPH had the green light to dump patients out-of-county, albeit at the City's expense."

MHRF Reconfiguration Dumped Patients Out-of-County

As reported in "Of Mold and Men" in the Westside Observer's July issue, the Department of Public Health's proposal to repurpose its Mental Health Rehabilitation Facility/Behavioral Health Center into mere housing was ostensibly approved by the Board of Supervisors during its June 18 Bielenson hearing in Board chambers. The Board didn't actually vote to accept or reject the Bielenson cuts proposed by DPH, it just closed the hearing, noting in its meeting minutes "No further action was taken."

Despite the Supervisors being told by Director of Public Health Barbara Garcia that the 34 patients in the MHRF would be relocated to Laguna Honda Hospital or "placed in the community," it turns out this reporter's concerns that patients would be dumped out of county has, in fact, occurred. The Supervisors never asked what "in the community" meant, so DPH had the green light to dump patients out-of-county, albeit at the City's expense, perhaps to the chagrin of City Attorney Dennis Herrera who is considering suing Nevada for inappropriate patient dumping into San Francisco, but who doesn't appear concerned about The City's own outbound patient dumping.

According to one reliable source who spoke on condition of anonymity, at least one of the MHRF's patients was admitted to a hospice, and 12 were admitted to LHH. Reportedly, the rest (of 36, not 34) "are being housed out of county at the City's expense." A second source independently verified that 12 of the MHRF's patients have been transferred to Laguna Honda. The rest have reportedly either gone to other care facilities like Crestwood Hope and Idlywood, or to non-profits like Loso House (a transitional program for people with serious mental health and substance abuse problems) operated by the Progress Foundation, which holds lucrative City contracts.

About half a dozen of the MHRF's patients reportedly went AWOL (absent without leave) while out on passes, perhaps to avoid being squished into Laguna Honda Hospital, or squished out — dumped out-of-county. Did they join San Francisco's mentally-ill homeless?

Another observer worries about the Health Department's claim that patients would be transferred from the MHRF to other "less-restrictive" settings. Given it's licensure, LHH is not a less-restrictive setting, since it's licensed as a "distinct-part" skilled nursing facility attached to a hospital. This issue is of keen interest to the U.S. Department of Justice's Civil Rights Division, which forced Laguna Honda through a legal settlement into discharging its patients to less-restrictive settings.

Dial "M" for Mayoral Veracity

There may have been no point dialing "M" hoping to obtain the mayor's veracity about whether or not he did restore all of the mental health cuts Director Garcia lured the Board of Supervisors into believing had happened. But here's how dialing "M" for Mayor Lee's public records went down.

When Supervisors London Breed and Malia Cohen pushed for information from DPH's Director Garcia during the Bielenson hearing in June, they may have been hoodwinked by Garcia's claim that the Mayor had restored "all" mental health cuts to his proposed two-year City budget for FY '13-'14 and FY '14-'15.

Following the Board of Supervisors Bielenson hearing on June 18, this reporter placed a public records request the next day addressed to Director Garcia — with courtesy copies of the records request sent to the Health Commission and DPH's public information officer, as well as to all 11 members of the Board — requesting a list of all of the mental health services restored by the Mayor.

This reporter received return receipts from Garcia's public information officer Eileen Shields, the Health Commission's Executive Secretary Mark Morewitz, four of the Board of Supervisors — including Supervisors David Campos, Mark Farrell, Scott Wiener, and Eric Mar, but not Supervisors Malia Cohen or London Breed — and from the Clerk of the Board, presumably Angela Calvillo. A return receipt was also received from Health Director Garcia. Eight people had opened and apparently read the records request. But the three principles — Garcia, Morewitz, and Shields — never bothered responding to the records request at all, which in and of itself is a violation of San Francisco's Sunshine ordinance. Never heard a peep out of any of them for a list of the mental health services restored by the Mayor. So much for veracity.

So this reporter tried again, placing a second immediate-disclosure records request on July 6 to the Mayor's Budget Director Kate Howard and Lee's spokesperson, Christine Flavey, asking for a list of each and all mental health services restored by Mayor Ed Lee, sending electronic courtesy copies to Supervisors Breed and Cohen. Once again, this reporter received return e-mail receipts indicating that Ms. Howard, Ms. Falvey, and Supervisor Breed — but not Supervisor Cohen — had opened and ostensibly read the second records request.

Ten days later on July 16 — again in violation of the Sunshine Ordinance's immediacy-of-response provisions — this reporter finally heard back, not from the Mayor's Budget Director, but from Kirsten Macaulay in the Mayor's Office of Communications, that the Mayor's office had "no responsive records" to my request. Macaulay directed me to (of all places) the Department of Public Health, which hadn't previously responded, and which hadn't created a list of whatever it was that the Mayor had reportedly restored.

On August 3, this tenacious reporter tried again, sending a third records request to Deputy City Controller Monique Zmuda asking for any records that the Controller's Office may have showing which mental health services the Mayor restored prior to the June 17 Bielenson hearing between his proposed budget submission in May and his final budget submission in June.

Six days later, Zmuda indicated on August 9 that she had spoken with Ms. Howard, who assured her that Howard's office doesn't maintain records "on programs not reduced or added back by the Mayor, only of services reduced." Does anyone really believe that the Mayor's Office of Communications or his Budget Director doesn't track programs added back by the Mayor in order to crank out media publicity about his accomplishments?

Nonetheless, Zmuda indicated she would have her budget staff "run some reports that show [the Mayor's] submitted budget and [the] Mayor's approved budget and we should have those next week." She indicated any such Controller's Office report would contain only dollar amounts, not program descriptions affected. Zmuda indicated DPH's Bielenson list would provide information on the original cut list, and that her office "may be able to annotate this with the health dept's staffs' help."

Also on August 9, one of the Controller's employees responded separately, saying the records request was a more "extensive and demanding request," and that the Controller may need to consult with another City agency, invoking an extension permitted by San Francisco Sunshine Ordinance.

When this reporter then e-mailed Zmuda the next day on August 10 noting that if Controller's Office was invoking an extension, it should be dated to start on Monday, August 5 (the first business day after first filing the request on Saturday, August 3), not on August 9, the next response from Zmuda was when she clammed up on August 10, saying that "We [the Controller's Office] have no documents that are responsive to your request."

Another door slammed shut. So much for City Hall's claims that it will openly provide data concerning City government on its new "open data" web site.

Squishing Replacement Patients Into the MHRF

When the MHRF beds on its second floor officially closed on Thursday, August 15, DPH's plan was to turn it into a Residential Care Facility for the Elderly (RCFE), and cram 59 indigent, non-ambulatory seniors two to a room, in the roughly 10-foot by16-foot rooms. There, they will face living together squished into "housing" not much larger than a prison cell, with no in-house services or "therapeutic" activities. How non-ambulatory elderly residents will care for themselves without in-house services or activities has not been explained.

But they'll be on an unlocked floor upstairs from an Adult Residential Facility (ARF) on the first floor that is also unlocked, which houses residents who have basically been banned from regular board-and-care facilities due to their behavioral issues. The first and second floor residents will share the nearest Muni bus stop with patients of a methadone program that is also located on SFGH's campus, which may be bad news for future residents. Some worry about what might possibly go wrong.

Soon, the City will lose a total of about 72 long-term mental health beds at the MHRF once its third floor turns half of its beds into respite beds. All in all, most observers believe that the "re-purposing" of the $40 million MHRF into essentially "housing" that has occurred since 2003 is scandalous. But a compliant Board of Supervisors has quietly gone along with the MHRF's reconfiguration, fully cognizant of the loss of long-term mental health beds at public- and private-sector hospitals throughout San Francisco.

More Squishing: Dial "D" for Dialysis

After Katie Worth published her article "Dialysis shortage creates expensive problem for
city," in the San Francisco Examiner on July 20, 2010, this reporter wrote two stories on July 22, 2010, and August 4, 2010 about the crisis with dialysis services at SFGH and Laguna Honda Hospital, while then the "San Francisco Hospital Examiner" for the Examiner's
on-line web site (paid just mere pennies based on web page "hits"). My reporting noted three years ago that LHH and SFGH had both failed to include space for dialysis patients in both of their rebuild projects.

Dialysis is a blood-filtration technique used on patients with kidney failure. Ms. Worth noted fully three years ago that dialysis centers in the City "increasingly exceed capacity, requiring some patients to be hospitalized for days or weeks — often on the public dime — while they wait for a spot at an outpatient clinic to receive the life-saving treatment. When patients need dialysis but there's no room in the outpatient center, they can end up being hospitalized. Hospitalizing a patient for dialysis can cost taxpayers thousands of dollars a day, whereas receiving the three-hour blood-cleansing treatment costs just hundreds of dollars, according to hospital officials."

Out of the blue on August 12, and now fully three years later, DPH just got around to issuing a Request for Proposals (RFP) seeking to outsource, build out, and squish a 30-chair outpatient dialysis center into Laguna Honda Hospital to serve all of DPH's dialysis patients. It will take another 16 months before any successful bidder on the RFP will actually open dialysis services at LHH, nearly five years after the Health Commission faced Worth's scathing reporting in the Examiner.

Prior to the release of the RFP, it is thought there were no public meetings, and no public dialogue, about whether LHH is even the right location at which to place dialysis services. Why weren't there any public meetings and public dialogue? Oh! I forgot: DPH doesn't believe there's any need for it to consult publicly with the community about LHH.

Potential bidders will have until October 21 to submit proposals, top vendors will be chosen on December 2, and the Health Commission and Board of Supervisors are tentatively scheduled to approve issuing a contract in January 2014. The "start date" of the 10-year dialysis contract award is expected for March 2014, with the build-out and opening of the dialysis center by the end of December 2014.

A number of concerns about placing outpatient dialysis services at LHH will be explored in the Westside Observer's October issue. For now, San Franciscans may want to question the wisdom of moving dialysis services from SFGH's Building 100 (an admittedly unsafe building), to an area in Laguna Honda that may also be seismically unsafe.

One knowledgeable source with an amazing memory recalls there was never a plan to seismically retrofit portions of LHH's old main building where the proposed outpatient dialysis center at LHH will be placed. Officials knew that seismically bracing the old administrative wings was way too costly and there would be too much lost floor space. And LHH wanted out of further Office of Statewide Health Planning and Development (OSHPD) oversight and control.

A second knowledgeable and high-level source confirmed that the LHH's replacement remodel plans had never intended to "bring the old buildings into seismic compliance, but rather mitigate some known vulnerabilities, such as removal of hollow, clay-tile walls and replace them with new concrete walls, and generally improve the life safety quotient for occupants of the old buildings."

That's it? Just mitigate? Replacing an unknown number of hollow-clay walls with some concrete walls? How many isn't known, since Laguna Honda referred this reporter to the Department or Public Works, who then suggested that OSHPD might not let drawings and specifications be released.

For all of DPH's squishing, Mayor Lee rewarded it a budget increase of $200 million, pushing DPH's budget to approximately $1.9 billion, reported in the Health Commission's August 6, 2013 meeting minutes.

When you're sitting in a dialysis chair at LHH due to kidney failure when the next Big One hits, will your relatives be notified you've been squished in a seismically-unsafe building?

Or will the City simply assert it has no statistics, deny negligence, and claim misery was just visiting company?


Monette-Shaw is an open-government accountability advocate, a patient advocate, and a member of California's First Amendment Coalition. Feedback:

September 2013

Laguna Honda Hospital Patient Dumping – Part 2

Of Mold and Men

Between dumping mental health patients into Laguna Honda Hospital and out-of-county, and dumping elderly skilled nursing patients out-of-county to make room for mental health patient admissions, who knew that news of mold in the LHH's new kitchen would be overshadowed by the sudden resignation of LHH's public information officer, Marc Slavin?

And that Slavin's ouster would obscure news that Mayor Ed Lee would be joined by a compliant Board of Supervisors reaching consensus to shut down San Francisco's Mental Health Rehabilitation Facility during budget negotiations?


Laguna Honda had never needed — and never had for over 100 years — a P.R. department in a public hospital serving what is essentially a "captive audience" of the medically indigent who have nowhere else to go."

Minister of Misinformation?

If I were a San Francisco Health Commissioner, I'd be furious that LHH's CEO Mivic Hirose appears not to have notified the Health Commission before Friday, June 21 that Marc Slavin, Laguna Honda Hospital's public information officer and communications director, had suddenly resigned days before, since news of his pending resignation was being openly discussed at LHH for at least two weeks, and line staff knew Slavin was physically gone the day before his resignation announcement was made. This is news that clearly should have been shared with the Health Commission to prevent them from being caught off guard.Marc Slavin

Slavin, you may remember, creatively spun to I-Team investigative journalist Dan Noyes in May 2010 that "the LHH patient gift fund isn't for patients" when Noyes first broadcast news that LHH's administrators had inappropriately been spending hundreds of thousands of dollars of donations to the patient gift fund on staff, instead.

For six years many believe, Slavin essentially served as LHH's shadow CEO, propping up Hirose when not running the entire show, including reports that he intermittently inserted himself into clinical-care decisions regarding specific patients with no medical license to do so, as well as interviewing job applicants and hiring decisions throughout the hospital.

Although staff and patients often wondered what Slavin's job duties involved, he served alternatively as Hirose's ghost-writer, speech writer, spokesperson, and staff bouncer. There are reliable reports that the intense friction between Slavin and Hirose had recently escalated. One high-level source has confirmed that Hirose and Slavin weren't getting along anymore, and during recent public meetings Slavin sat in seating for members of the public, not at the main table, sending a signal that he was on the outs with Hirose.

Previously, Slavin appeared untouchable, due to his benefactress former City Attorney Louise Renne, and former Director of Public Health Mitch Katz. As a 1375 Special Assistant XVI , a job code typically reserved for the Office of the Mayor and Board of Supervisors, observers suspected Slavin was brought in by then-Mayor Newsom.

But once Katz fled to Los Angles following a whistleblower complaint that Katz had accepted significant consulting fees from a City contractor to whom he had steered lucrative consulting contracts, and after Renne's Laguna Honda Foundation imploded, Slavin lost his political cover.

Slavin claimed to staff in a goodbye note that he was resigning in order to complete his PhD thesis. There was no usual-and-customary "good-bye" party to honor Slavin's six-year service.

Along with Slavin's ouster, there are reports that LHH suddenly and completely disbanded its Communications Department at the end of the week, the very three-person empire Slavin created that at one point was consuming over $300,000 a year in salaries and benefits. Prior to his arrival in mid-summer 2007 on assignment to "stop the negative publicity about LHH" for Louise Renne's Laguna Honda Foundation, Laguna Honda had never needed — and never had for over 100 years — a P.R. department in a public hospital serving what is essentially a "captive audience" of the medically indigent who have nowhere else to go.

Emerging Mold Problem

Freshman District 7 Supervisor Norman Yee attempted to circumvent recommendations by Harvey Rose, the Board's Budget and Legislative Analyst. On June 5, Yee introduced an "emergency" sole-source contract not to exceed $595,367 to repair a cart wash leak that resulted in extensive mold in LHH's new kitchen. The cart wash room is where mobile carts used to transport food from the main kitchen to the patient's rooms are washed.

Although John Thomas, the LHH Replacement Project manager from Department of Public Works (DPW) claimed during the June 5 hearing that there is a "temporary cleaning facility" for the carts used to transport meals to patients, LHH staff asserts that the food carts are now just cleaned using disinfectant wipes, not fully washed.

Mr. Rose recommended that a sole source contract not be issued, there was no "emergency" involved, that the amount be reduced by $266,723 to only $328,644, and that the DPW should seek competitive bids from the lowest-responsive bidder to complete the remaining remediation of the mold in LHH's new kitchen.

Although LHH moved into its new facilities in December 2010, elevator maintenance staff working in LHH's new Pavilion Building didn't discover a water leak in the elevator's machine room until September 2011. The leak had gone undetected and was eventually traced to the hospital's cart wash room on the floor above the elevator machine room, resulting in mold growing in several rooms.

But despite discovery of the mold in September 2011, the Director of DPW didn't declare an "emergency" until June 6, 2012. DPW initially estimated the cost to repair would be up to $250,000, the threshold set in Administrative Code Section 6.60 that permits City department heads to award emergency contracts without undergoing competitive bidding procedures. DPW awarded a not-to-exceed sole-source contract for just $80,000 to Belfor USA Group to perform the demolition, mold remediation, and reconstruction work; Belfor began the remediation in late June 2012.

For his part, Mr. Thomas claimed that the delay involved determining if it would be covered by LHH's insurance policies, or whether the repairs would be funded through recovery of funds via the lawsuit the City has filed against LHH's architects. Thomas further noted that in 2011, the Replacement Project was directed to redesign the cart wash space, since it was "incompatible with its use," and the space had to be redesigned.

In January 2013, Belfor submitted invoices for $328,644 for remediation work completed through November 2012, and Belfor estimated it would cost an additional $266,723 to reconstruct the facilities, for a total not-to-exceed cost of $595,367. This lead to the Resolution Yee introduced in May, four months after the City received Belfor's revised costs to complete the remediation.

But Mr. Rose noted that the emergency was not officially declared until June 2012 and that Belfor estimated the project would be completed in September 2013, fully two years after the emergency leak was first discovered. Rose had to point out to Supervisor Yee and the Budget and Finance Sub-Committee that Administrative Code Section 6.60 defines emergencies as those which demand immediate action for "conditions that involve clear and imminent danger to prevent or mitigate loss of, or damage to, life, health, property or essential public services."

As such, Rose questioned whether the mold problem at LHH met the City's definition of an emergency, and concluded that in his professional judgment it did not. Rose recommended that Yee's Resolution be revised to put the remaining $266,723 in uncompleted work out to competitive bid to seek the lowest-responsive bid to compete the remaining reconstruction.

Yee charged ahead, ignoring Rose's recommendations. Yee had his Resolution calendared for a hearing, proposing to bypass competitive bids by awarding Belfor an amendment to complete the full $595,367 in work. But following astute questioning by Supervisor John Avalos, Mr. Thomas admitted the work was not an emergency; Avalos got Thomas to agree to accept Rose's recommendation to seek competitive bids.

When Harvey Rose speaks, the Board of Supervisors typically listens.

Louise Simpson from the City Attorney's Office advised that San Francisco has sued Stantec, the LHH Replacement Project architect, for "total estimated damages in excess of $45 million," but she provided no explanation as to why that lawsuit — initially reported to recover $70 million has been reduced by $25 million to just $45 million.

Behind Patient Dumping

Since plans for the two-year budget got underway in early 2013, Mayor Ed Lee has been quietly working with the Department of Public Health (DPH) and its Health Commission to "reconfigure" the Mental Health Rehabilitation Facility (MHRF) — renamed the Behavioral Health Center — on SFGH's campus. The MHRF was supposed to be a long-term care facility for the mentally ill to keep them in-county.

DPH submitted a list of "Bielenson" budget cuts that totals between $29.6 million and $39 million, mostly in cuts to mental health services, that the Mayor appears to have incorporated into his budget submission for the upcoming two-year budget cycle.

DPH proposed — and the Mayor appears to have accepted — cutting $12.7 million (43 percent) of the $29.6 million, by "reprogramming" the MHRF into housing and dumping patients into Laguna Honda Hospital; cutting $1 million (3.5 percent) from tuberculosis control programs; cutting $8.8 million (30 percent) from various community-based services, most of which are mental health services, which cuts will grow to $17 million beginning in July 2015; and cutting just $7 million (23.7 percent) from HIV health services. The HIV cuts are the only ones being aggressively backfilled, and will likely not occur.

Because it will effectively eliminate all but 24 of the mental health rehab beds at the MHRF on the campus of San Francisco General Hospital, submitting such a budget proposal harkens back to Governor Ronald Reagan who shut down California's mental health hospitals and ended federal community mental health centers while President. It appears Mayor Ed Lee and the Board of Supervisors may reach consensus to shut down the MHRF.

As reported in "Who's Dumping Grandma?" in last month's Westside Observer, the Board of Supervisors was required to conduct a State-mandated Bielenson hearing on the DPH's proposal to cut the remaining 47 mental health beds in the MHRF down to just 24. The MHRF had opened with 147 mental health beds, but was "reconfigured" to only 47 in 2003. How long before those remaining 24 beds are simply eliminated altogether?

During the Board's Bielenson hearing held on June 18, Director of Public Health Barbara Garcia tried to reassure the Board of Supervisors that only 12 of the mental health patients at the MHRF would be transferred to Laguna Honda. She claimed — falsely it seems — that the remaining 22 MHRF patients would be placed "in the community," but Garcia failed to inform the Board of Supervisors that the plan appears to be to dump them into out-of-county facilities, not "into the community." Managers throughout DPH are aware the plan will most likely use locked psych facilities out-of-county.

At the start of the Bielenson hearing and prior to taking public comment, Garcia repeatedly acknowledged that "in preparation for healthcare reform [ObamaCare] to reduce costs and increase revenue generation, in the coming fiscal year DPH needs to reduce services that are not revenue generating." Most of the $17 million in the proposed cuts to community-based services are because DPH does not generate revenue by providing those services. Later in the hearing, following public testimony, Garcia indicated that "one of the important things we've been looking at this facility [the MHRF/BHC] it's about $19 million [to operate annually] with only about $2 million in revenue."

Garcia testified "We will be closing one of the two skilled nursing facilities on the SFGH campus, and organizing those services to support discharges from SFGH, [which] we believe [will] increase revenue." This means that, by closing skilled nursing beds for psych patients in the MHRF, SFGH will gain vacated space in the MHRF to be converted, essentially, into "housing" to more quickly discharge acute-care patients from General Hospital into. DPH will be able to increase SFGH revenues by being able to more quickly accept paying, revenue-generating new admissions into the acute-care hospital beds, using the MHRF as transitional housing to quickly dump patients out of the City's acute-care hospital and trauma center.

A few senior managers at LHH are claiming to community leaders that only 6, not 12, of the MHRF patients are slated to move to LHH; the senior managers have also acknowledged the remaining MHRF patients will be placed out-of-county, not in "the community," as Garcia may have misinformed the Board of Supervisors.

Supervisors Support Dumping?

Only four of the Board of Supervisors bothered to ask Garcia questions about the Bielenson cuts; the remaining seven Supervisors raised no questions. Supervisors David Campos and Scott Wiener asked only about the $7 million in HIV service cuts, both men knowing that well over half of those cuts had already been backfilled, and all but a handful of those cuts will likely also be backfilled. Neither man asked about the mental health cuts.

Supervisors Malia Cohen and London Breed asked Garcia questions about the mental health cuts and Laguna Honda Hospital. Supervisor Cohen asked about the mental health cuts. Garcia lamely claimed "many of those individuals will be going into community placement," for those who need "locked facilities." San Francisco has few, if any, in-county locked facilities.

Cohen pushed further, asking if "the number of folks who need [skilled nursing facilities] will outnumber the beds that are available at Laguna Honda Hospital." Garcia indicated that, as individuals leave LHH, DPH will transfer people over. But Cohen understood that every bed, formerly housing the elderly who need skilled nursing care, that is converted into beds for mental health patients, there will be one fewer bed for elderly demented patients needing 24/7 skilled nursing care.

Repeatedly, Garcia noted that the Mayor had restored all of the mental health cuts. But the mental health beds at the MHRF/BHC were not restored, and there are $17 million in looming community-based cuts, which haven't even been identified yet, and won't be until an RFP is issued in 2014.

Garcia indicated DPH is following LHH's admissions policy, but she didn't acknowledge that LHH is — by reliable report — internally considering changing the admission criteria to its North Mezzanine patient neighborhood from "dementia" to "cognitive impairment," potentially paving the way for an admissions policy change, which internal conversation Garcia chose not to share with Supervisors.

At the end of the hearing, President Chiu simply moved the agenda to its next item, without taking a vote. State law only requires that a hearing by County supervisors be held, they are not required to vote on proposed cuts.

Is cutting mental health services in San Francisco to the tune of over $100 million across the past decade really a San Francisco "value"?

Who will be responsible for the death of in-county mental health beds at San Francisco's MHRF, all in the name of increasing revenue?

Monette-Shaw is an open-government accountability advocate, a patient advocate, and a member of California's First Amendment Coalition. Feedback:

July-August 2013

Who's Dumping Grandma?

The Shame of Laguna Honda

Plans at the Department of Public Health are, apparently, to place 34 of its "behavioral health" patients into Laguna Honda Hospital (LHH), possibly placing more psychotic patients into the mix with the frail elderly and disabled. History repeats itself with the proposed reconfiguration yet again.

On April 20, San Francisco City Attorney Dennis Herrera launched an investigation into whether Nevada's primary state psychiatric center, Rawson-Neal Psychiatric Hospital, had engaged in patient "dumping" by sending patients out of state using one-way bus tickets. A San Francisco Chronicle article on April 21 quoted Herrera as saying that the practice of psychiatric patient dumping is "shockingly inhumane and illegal."



She (Therapist Blaustein) and the physician assigned to the North Mezzanine raised concerns and protested placement of inappropriate patients, indicating the two patient populations don't thrive well together because the behaviors of people with dementia agitate psychotic people, and then psychotic patients want to harm the demented ones."

Herrera's concern appears limited to in-bound patient dumping and the increased costs to San Francisco for caring for psychiatric patients. But Herrera has been strangely silent regarding out-bound patient dumping from San Francisco to other jurisdictions, and potential patient dumping between San Francisco facilities. His hypocrisy is breathtaking.

This is the same hapless Herrera featured in the article "High Costs of City Attorney's Advice" in last month's Westside Observer.

The Chronicle article also reported that Paul Boden, the director of a nonprofit that highlights civil rights abuses against the homeless, the Western Regional Advocacy Project, said "it's a little hypocritical of San Francisco officials to feign shock at the Las Vegas hospital's [patient dumping] practice when [San Francisco officials] too, hand out one-way bus tickets to homeless people."

The Department of Public Health (DPH) is proposing to re-configure the Mental Health Rehabilitation Facility (MHRF) on the San Francisco General Hospital campus, renamed the Behavioral Health Center (BHC) in order to be politically correct, into a residential care and respite care facility, and transferring 34 behavioral health patients to Laguna Honda Hospital (LHH)

Is transferring behavioral health patients to LHH a form of patient dumping into a setting where they may not receive the appropriate level of mental health care?

Battery Against LHH Staff

Alerted this April that LHH had accepted transfer of about 11 BHC patients during 2012, and that an Institutional Police Officer had informed SEIU members at LHH in October 2012 that assault cases at the facility had drastically increased, many were concerned. When it was learned that a food service worker was assaulted on the job in May 2012, subsequently required shoulder surgery following the battery, and has yet to return to work 10 months after being attacked, concern mounted. The worker was so badly beaten that emergency room staff treating her were shocked by her injuries, and the obvious emotional trauma.

She entered a locked dementia unit at LHH — the North Mezzanine, which serves patients at risk of wandering, elopement, or harm — she was assaulted when she encountered a patient who was supposed to be being watched by a "sitter." The North Mezzanine unit has traditionally housed and cared for demented, but ambulatory, patients, it is a locked unit implemented to protect patient safety.

But LHH placed behavioral health care patients on the North Mezzanine, possibly agitating demented patients. The patient who assaulted her was finally sent on a "5150" psychiatric hold to SFGH after going on another rampage. A separate patient who had been discharged was eventually readmitted to LHH, despite being a sexual predator.

An investigation revealed that the injured staff member is now suing the City, possibly alleging negligence and mishandling of the situation following her assault and battery. The lawsuit appears to be sealed, most likely to protect patient privacy, even though the patient has reportedly since died. As a reminder, assault is any reasonable threat of physical harm to another person; battery is actual physical contact and actual harm.

Staff Retraining Required

Her battery case may not be the only one, but her assault was a big deal in LHH. Multiple meetings were held to calm staff, and hospital administration spent a lot of money to have all employees go through SMART training — staff training presented by a licensed Psychiatric Technician on how to remain safe around violent patients.

SMART training is definitely not part of the training typically provided to staff in long-term care skilled nursing facilities; it is more typically presented to staff working in psychiatric and mental health settings. The SMART training at LHH was introduced in 2005 to deal with its then-new patient population during the ruckus over implementing the "psycho-social rehabilitation" model of care exported to LHH when Mozietta Henley, RN, PhD was shunted from the MHRF to LHH, toting along her "BioPsychoSocialSpirtual (BPSS)" model of care proposal that was never tested or implemented at the MHRF.

Henley's model of care comically became the basis for a small California HealthCare Foundation grant LHH's Mivic Hirose was awarded for "Social Rehabilitation." [I was there: Hirose's January 2005 grant ended as a notorious flop, probably an embarrassment to the California HealthCare Foundation, and created a ruckus at City Hall.]

This followed on the heels of former Director of Public Health Mitch Katz's nervous announcement on October 20, 2004 during LHH's Executive Committee meeting of his "vision" that LHH would become a "social rehabilitation facility for the homeless poor," a statement the City soon denied had been made, but the cat was out of the bag since numerous LHH staff had heard Katz speak clearly. Previously, the not-too-esteemed Dr. Katz lured the MHRF Blue Ribbon Committee into believing that the "future LHH" would provide "the same kind of services as offered at the MHRF." If the City accepts DPH's proposal to reconfigure the MHRF and dump more psych patients into LHH, we'll have come full circle to Katz's prediction of offering MHRF services at LHH.

Uptick in Sheriff's Statistics

Alerted that an uptick in assaults at LHH may have occurred between calendar years 2011 and 2012, Sunshine records requests were made to the SF Sheriff's Department, knowing that asking LHH's administrators for this data would meet with dead silence, if not endless delays and denials.

Data provided by the Sheriff's Department on May 21 shows that between 2011 and 2012, battery incidents increased at LHH by 18.2%, from 22 to 26 such cases, which is statistically significant. Across the same time period, "disturbances by resident" incidents summarized on the monthly Sheriff's Activity Reports increased 227.8%, from 115 to 337 at LHH, and "disturbances by visitors" increased 309.4%, from 32 to 131 cases.

It's no wonder that in October 2012 an Institutional Police officer from the Sheriff's Department advised SEIU members working at LHH that assault cases had drastically increased.

Three Questions Lead to Bullying

Laguna Honda staff brave enough to ask questions are frequently targeted for retaliation. Indeed, the culture of staff intimidation was increased soon after Hirose was appointed CEO in 2009, and after Slavin came on board in 2007 to "stop the negative news about Laguna Honda" for his benefactress, former City Attorney Louise Renne. The intimidation was designed to silence and weed out any remaining staff who dared to question agendas that violated State laws and existing hospital policies.

Randy Ellen Blaustein, a therapeutic recreation therapist on the North Mezzanine unit who worked at LHH for eight years, raised three questions about the mixing of ambulatory demented patients with patients having psychiatric diagnoses from the BHC transferred to the North Mezzanine. She and the physician assigned to the North Mezzanine raised concerns and protested placement of inappropriate patients, indicating the two patient populations don't thrive well together because the behaviors of people with dementia agitate psychotic people, and then psychotic patients want to harm the demented ones.

Blaustein noted the North Mezzanine physician had complained to hospital administration about no longer being able to provide input to admission decisions to their unit, and protested inappropriate placements, but was ignored.

During a key meeting with hospital administration, Randy apparently asked three questions that landed her in a lot of trouble:

1) Why hadn't LHH's Administration honored its vow not to place residents with histories of physical aggression and violent behaviors on the North Mezzanine?

2) Why did the unit no longer have input into admission processes? and

3) Why wasn't their unit granted a lower census, since they had been afforded that in the old facility, given their patient population?

Apparently, someone reported to her supervisor, Bill Frazier the Director of the Activity Therapy Department, that Randy had "overstepped boundaries; was negative and didn't offer solutions; wasn't supportive of the new LHH; and (gasp!), had insinuated that Administration didn't know what they were doing." Instead of supporting Blaustein, Frazier asked her to cease asking contentious questions in meetings. Randy says she had previously gotten into trouble for upsetting Dr. Colleen Riley, LHH's Medical Director, in another meeting.

"With severe dementia, less is more. I've never heard of any other facility that places nearly 60 ambulatory people with severe dementia in the same living area, with psychotic people in the mix," Blaustein says. "The North Mezzanine received new admissions that required 1:1 'sitters' at all times, because of their physically aggressive behaviors, placing other residents and staff at risk."

After Clarendon Hall closed, LHH never re-created the three locked psych units that had been on the second floor of Clarendon. Many of LHH's staff, including Blaustein, believe that's, in part, why the new LHH is such a mess.

Another source reports that the staff member who was assaulted, subsequently requiring shoulder surgery, who is now suing, was assaulted by the North Mezzanine patient who was supposed to have a 1:1 sitter, but somehow got out of the inner door to the unit and attacked her before the outer door. So much for sitters.

Randy says that, after being repeatedly bullied, she chose to resign. Shortly before she left in mid-December 2012, a discussion began to consider changing the admission criteria to the North Mezzanine from "dementia" to using "cognitive impairment," but she doesn't know the outcome of that discussion. Like many former employees, Blaustein still cares deeply about LHH's residents and staff, and their safety.

Earning His Comeuppance

Bill Frazier appears to be his own worst enemy. Comeuppance was bound to catch up with him, since what goes 'round, typically comes back 'round. All staff at LHH are required to take sexual harassment prevention training annually. It was widely known throughout LHH that during his 15 years as Director of Activity Therapy, a number of complaints were filed against Frazier by subordinates for such things as sexual harassment, unequal treatment, and failure to comply with union agreements. It is unclear how LHH's Administration responded to these voiced concerns, since the reported pattern was observed to continue from year to year.

The training may have been lost on him, since in early 2013 he was overheard screaming in his office at an Activity Therapist for over ten minutes, and allegedly called her a "selfish bitch" — clearly a sexist term that has no place in public service.

This might have been brushed under the carpet as a "he said, she said" situation, except it was overheard and reported by a witness willing to come forward. This may have been the straw that broke the camel's back, when Frazier suddenly vanished in February; some of his duties assigned to an acting director, and other duties split to other departments.

But a month after his disappearance, amid reports he would not be back, Frazier resurfaced in LHH's Accounting Department in a newly-created position as liaison to Friends of Laguna Honda (formerly known as Laguna Honda Volunteers, Inc., the non-profit dedicated to LHH's patients, that never needed for 50 years any "liaison" on LHH's staff paid from taxpayer funds).

Frazier is now in charge of LHH's Patient Gift Fund, which should not be a 40-hour full-time job. It's akin to having the fox guarding the hen house. That LHH created the position as a soft spot for him to land may mean the hospital is worried about potential shenanigans with the gift fund, or worried that he knew too much about the great gift fund scandal of 2010. After supervising approximately 40 staff for over a decade and a half, he no longer has direct reports or anyone to supervise.

Out of County, Out of Mind

As just one example of out-of-county patient dumping, consider the case of a middle-aged gay man who suffered a stroke one evening while at a tavern, and was taken to SFGH where he languished for months. His close friends tried to get him admitted to LHH, but were rebuffed when told he needed too much physical rehabilitation therapy and couldn't be sent to LHH. It's well known that delays in receiving rehabilitative therapy following strokes leads to poorer patient outcomes and progressive functional decline.

He languished at SFGH for more months until being discharged out-of-county to a facility in Antioch that principally houses patients with dementia and Alzheimer's. Since he is not demented, he now languishes in an environment in which he has nobody to communicate with, and his friends are unable to endure the obstacles of travelling to Antioch to visit him. His family is now trying to get him discharged to take him back to Ohio for care.

There are many other similar stories of patients needing skilled nursing care who are being dumped.

Many of LHH's department heads are concerned about DPH's decision to reconfigure the MHRF/BHC and place the 34 BHC patients into LHH. But they remember that when former LHH Executive Administrator Larry Funk opposed admission of violent patients to LHH, he was replaced and demoted.

Other staff who opposed admission of unsafe patients, including former Medical Director Dr. Terry Hill; Dr. Maria Rivero, LHH's former admitting physician; and others, were forced to resign.

Many dedicated staff want to make LHH a safe place for staff and patients, and they're concerned Herrera may not know LHH doesn't have a psych license.

There are huge human costs to patients and staff from patient dumping, and Herrera is correct that the practice is "shockingly inhumane and illegal" — and obviously unethical. But where is Herrera's concern for out-bound patient dumping to other counties, or internal dumping between DPH's facilities? Is he concerned only about the cost of in-bound dumping, not the costs of out-bound dumping? How does Herrera's ethical barometer work? Will Herrera ever look in the mirror and investigate patient dumping occurring in his home town's back yard, or is he just grandstanding?

One test of Herrera's ethics may involve how quickly the lawsuit filed by LHH's battered staff member is resolved. Hopefully, Herrera's underlings won't introduce a flaky motion for summary judgment to stall her case and delay justice in a misguided attempt to scuttle her settlement, since that would only add further insult on top of injuries.

Monette-Shaw is an open-government accountability advocate, a patient advocate, and a member of California's First Amendment Coalition. Feedback:

June 2013

Retaliation and Bullying of City Employees

High Costs of City Attorney’s Advice

Spurious legal arguments creatively developed by Deputy City Attorneys to fight lawsuits against the City — often with the supervisory approval of the City’s Chief Labor Attorney and probably City Attorney Dennis Herrera himself — may be so misguided as to be costing the City millions of dollars, year in and year out, and may be damaging the reputation of the City Attorney’s Office.

The City Attorney and the City appear to be laboring under the age-old adage that there’s plenty of money for “Defense” (of City officials), but no money for “Butter” — relief for plaintiffs harmed who are forced to sue the City.

Troubling developments in Dr. Derek Kerr’s settlement agreement against the City for $750,000 have occurred since the Westside Observer first published details of his settlement terms in our April issue. Lawsuit Settlements

In addition, new information has surfaced regarding the 105 settlement agreements involving prohibited personnel practices against the City that have cost taxpayers at least $12.1 million over a six-year period, showing a disturbing trend in how the San Francisco City Attorney’s Office mounts its legal defense in these cases.


But the costs are substantially higher when City Attorney costs are added in … a total of 40,828 hours at a total cost of $7.726 million, above and beyond the $11 million settlement…""

“The City Attorney tried to use every pretext, lie, and smear used by the Defendants in my case to deny their whistleblower retaliation. The evidence from sworn depositions and subpoenaed documents — plus their pitiful contradictions — sank their defense,” says Dr. Derek Kerr, who was awarded monetary and non-monetary damages in his wrongful termination lawsuit settled against the City last month.

Developments in Kerr’s Settlement AgreementDr. Derek Kerr

As the Observer reported, Dr. Kerr’s settlement agreement included five non-monetary terms. Following the Board of Supervisors unanimous passage on second reading of Kerr’s settlement agreement on March 26, the City appears to have already deliberately mucked up at least three of Kerr’s non-monetary settlement deals.

First, the non-monetary provisions ordered the City to issue a formal retraction signed by Director of Public Health Barbara Garcia in the same format that former Director of Public Health Mitch Katz jointly issued with Laguna Honda Hospital (LHH) CEO Mivic Hirose in 2010, falsely accusing Drs. Kerr and Maria Rivero of not only being “detractors,” they publicly claimed Kerr and Rivero had made, and would continue to make, “false statements” — publicly defaming the two doctors as dishonest and liars.

But Garcia’s initial “retraction” notice was not signed by her, and was not in the same format that had been issued by Katz, which had been a key requirement of Kerr’s settlement agreement. Since the settlement agreement takes place under Court supervision, Kerr is required to report any departure from agreed-upon terms to his attorneys, in order to prevent any breach of his non-monetary settlement terms. After Garcia’s departure from Kerr’s settlement agreement terms was reported to the City Attorney, she was required to issue a “do-over,” and a revised retraction notice in the correct format has now been posted on the Department of Public Health’s web site.

Dr. Maria RiveroSecond, the City’s required public apology to Kerr at a meeting of the City’s Public Health Commission was improperly announced via a deficient agenda notice for the Health Commission’s April 2 meeting.

On Friday, March 29, the Health Commission released its April 2 meeting agenda, which listed agenda item seven merely as an “LHH Update.” The item carried only a subheading, not any “meaningful description” required by the Sunshine Ordinance and the Brown Act. Members of the public had no way of knowing the “LHH Update” item would include Dr. Kerr’s public apology so they may have chosen to attend the meeting, had there been a clear agenda description. Only by a stroke of accident did Kerr’s associate, Dr. Rivero, discover over the weekend that the “LHH Update” item would include Kerr’s public apology.

Once alerted, Dr. Kerr’s supporters were quickly notified, and 32 speakers attended the Health Commission’s April 2 meeting, all unanimously testifying in support of Kerr’s contributions to Laguna Honda Hospital’s hospice program. Had there been sufficient agenda notice, Kerr estimates attendance would have easily doubled.

Nobody spoke in support of Kerr’s oppressors, particularly not in support of Mivic Hirose, LHH’s CEO. Perhaps Hirose didn’t want her lackey subordinates and supporters to witness her having to publicly apologize to Kerr. Curiously, LHH’s highly-paid public information officer, Marc Slavin, was missing in action as a no-show, rather than standing beside his incompetent boss, as he typically does during public meetings.

Given the deficient agenda notice, a Sunshine Ordinance Task Force complaint has been filed by Dr. Rivero and this author regarding the Health Commission’s ongoing, deficient agenda notices. We’ll keep you posted on how the Sunshine Task Force rules on the complaint.

Third, Kerr’s settlement agreement provided that Hirose would read into the minutes of LHH’s 40-member senior Leadership Forum the commendation letter co-signed by Dr. Colleen Riley, LHH’s Medical Director and Dr. Steven Thompson, LHH’s Chief of Staff. But Hirose instead read the letter into the minutes of LHH’s much smaller Executive Committee on April 23, after which Kerr stated “We are glad that we exposed misconduct. If any of you want to blow the whistle, please contact us, ” as he was leaving handouts for the Executive Committee. Like Garcia, Hirose was required to make a “do-over.” On May 8, Hirose finally read Kerr’s commendation letter into the minutes of the Leadership Forum, as Kerr and Rivero wore home-made “Speak Truth to Power” ID badges after being asked not to bring handouts to the Leadership Forum do-over.

“Guns” or “Butter”?

There’s little injured-party relief (“Butter”) when it goes to legal Defense costs (“Guns”).

On April 16, the San Francisco Examiner carried an article by Chris Roberts regarding the $11 million awarded in the 103 prohibited personnel practice cases, which Dr. Kerr uncovered through a public records request to the City Attorney and which this reporter performed a secondary data analysis of. Roberts reported that the 103 cases filed by City employees includes “$3 million paid out in 18 racial discrimination cases and more than $1 million in 25 disability discrimination cases.” [Editor’s Note: The $11 million Mr. Roberts reported was subsequently confirmed to be even higher, at a minimum of at least $12.1 million, due in large measure to under-reporting by the City Attorney’s Office of actual settlement amounts to Dr. Kerr.]
As the pie chart in Figure 1 shows, settlements for prohibited personnel practices between 2007 and 2012 also include over $1 million awarded for “general harassment” of employees, at least $1.4 million for “wrongful termination,” $553,837 for “sexual harassment” cases, and over $4.8 million for various types of other prohibited personnel actions.

The $12.1 million doled out to settle what were at least 105 cases is one clue that there’s a lot of bullying of City employees, cases oftentimes pure, thinly-disguised retaliation involving personnel practices already prohibited by law.

But the costs are substantially higher when City Attorney costs are added in for the time Deputy City Attorney’s (DCA) spend defending the City against these lawsuits. According to a further public records request, DCA’s spent a total of 43,195 hours at a total cost of $8.3 million — above and beyond the nearly $12.1 million in settlement awards — defending the 105 cases against the City involving prohibited personnel practices. Combined, between actual settlement awards and City Attorney time fighting the cases, we’re talking at least $20.4 million in preventable waste of taxpayer funds — preventable precisely because they involve personnel practices long prohibited by law.

In the Doe and Raskin v. the City of San Francisco 9–1–1 dispatcher’s case, they were awarded $726,000, but the City spent $304,508 fighting Doe and Raskin. In the Derek Kerr, MD v. the City of San Francisco case that awarded him $750,000, the City spent $450,493 (1,740 hours) fighting Kerr!

In one of the racial discrimination cases a City employee won, he was awarded just $322,750, but new data shows the City Attorney’s Office racked up 3,107 hours fighting his case, at a total cost of $526,597. In one wrongful termination case, a City employee was awarded just $15,000, but data shows the City Attorney racked up $247,772 fighting his case. In another racial discrimination case, although the Plaintiff was awarded $1.6 million, the City Attorney spent $488,022 and 2,817 hours fighting the settlement.

Disturbingly, in a lawsuit settlement involving compensation to a City employee, while the City Attorney’s office reported the Plaintiff had only been awarded $109,583, according to the Board of Supervisors’ January 17, 2008 Rules Committee agenda, the Plaintiffs was awarded $755,000, suggesting data from two City agencies don’t jive. The City Attorney’s Office reported in had spent 1,855 hours, at a cost of $341,946, fighting the case.

The City Attorney’s Office appears to have initially under-reported to Kerr — by at least $1.47 million — the amount of settlements actually awarded to 15 of the 105 plaintiffs. The data discrepancies were uncovered by comparing data provided by the City Attorney’s office in November 2012 to data gleaned from the Board of Supervisor’s Rules Committee agendas and the full Board of Supervisors meeting minutes. The City Attorney’s Office under-reporting of actual settlement awards in the 15 cases represents 12% (almost $1.5 million) of the $12.1 million reported by the Board of Supervisors.Approved Cases

Of the remaining 90 cases, the City Attorney reported to Kerr the correct settlement award amounts for 19 cases, but it is not yet known whether 71 of these cases were accurately reported by the City Attorney to Kerr, or if the $12.1 million will soar even higher if additional inaccurate under-reporting of actual settlement awards is uncovered.

There are many other examples of small monetary settlements to City employees for various prohibited injuries, after the City Attorney racked up large sums in costs fighting the settlements every step of the way. And that’s without considering the costs of staff time spent by City department managers during lawsuit litigations, which staff time and associated costs are not tracked at the department level.

According to a retired senior human resources professional in the City who spoke recently on condition of anonymity, the City considers the costs of on-the-job bullying, retaliation against employees, and wrongful termination, to be a “cost of doing business.”

We’ve heard this justification before, including from San Francisco General Hospital nurses who acknowledge that the City may consider the failure to fix problems at SFGH that result in preventable patient outcomes, as another cost of doing business.

Supervisors Settle 305 Lawsuits Against the City

Across the same six-year period between 2007 and 2012, a total of 305 legal settlements filed against the City — for a whole host of lawsuits and other unlitigated claims beyond just prohibited personnel practice cases — were heard before the Board of Supervisors’ Rules Committee prior to referral to the full Board for consideration and approval. The 305 cases cost taxpayers a total of $104.7 million — without including the costs of City Attorney time fighting the lawsuits.

Although Dr. Kerr obtained a breakout of the types of prohibited personnel practice cases through a public records request to the City Attorney’s Office, the Board of Supervisors are required only to publish “notice” on its agendas of the major categories of cases, whether for settlements of lawsuits, settlements of unlitigated claims, or settlements for other types of cases. So it’s unclear how many of the 305 settlements involved lawsuits for Muni accidents versus, say, poor healthcare delivered at City hospitals — or bullying of, and retaliation against, City employees.

As the pie chart in Figure 2 shows, 214 of the cases heard by the Board of Supervisors involved settlements of lawsuits, fully 86.6% of all settlements. The Board heard another 60 cases involving unlitigated claims, 6 other claims, and the remaining 25 cases involved a variety of types of settlements.
It appears that the 105 cases involving prohibited personnel cases represent 34% of the 305 cases referred to the Board of Supervisors for settlement approval, and account for 11.5% of settlement awards. Clearly, the prohibited personnel practice cases and costs are completely preventable, if City managers would simply follow existing laws regarding prohibited personnel actions.
In February 2012, ABC-TV Channel 7’s KGO “I-Team” investigative journalists reported that one attorney said that all of the lawsuits and claims — not just the personnel cases — are preventable. During the six-year period it examined (a five-year period one year earlier than data reported in this article), the I-Team reported that thousands of claims and lawsuits — 10,000 of which resulted in no financial payouts whatsoever — totaled more than $212 million to resolve, plus at least $53 million in City Attorney time and costs to fight the 10,000 cases receiving no payout, ballooning to $265 million in total.

In response to an I-Team’s question about whether the $265 million was considered just a cost of doing business, City Attorney Office spokesman Matt Dorsey callously responded saying that when you consider that San Francisco spends $6.8 billion every year to run City government, “You know, it is. It’s the cost of … running a major city.” Dorsey said most of the claims and lawsuits stemmed from the vast amount of vehicles San Francisco has on its streets, without offering any proof that the $265 million in costs were attributable mostly to MUNI.

This is the same Matt Dorsey who claimed in 2004 that the wrongful termination case of Dr. John Ulrich from Laguna Honda Hospital in 1998 over First Amendment free speech issues that resulted in a negotiated $1.5 million payout to Ulrich from the initial $4.3 million jury award, was “not an instance of reprisal,” and that the City Attorney’s Office “… considers this outcome [Ulrich’s award] … [to be] an aberration.”

Dorsey probably also figures that City employees who file lawsuits regarding prohibited personnel practices such as racial discrimination and wrongful termination to be just another “aberration” to be chalked up to the costs of doing business.

High-Priced City Attorneys

At the end of calendar year 2012, San Francisco’s City Attorney’s Office alone employed 318 staff paid a combined $38.5 million in total pay, excluding 30% to 40% fringe benefits. Of the 318, the City Attorney employed 182 attorneys across seven job classification codes, paid a combined $27.8 million in total pay. Of the 138 Civil and Criminal Attorneys, 76 of them earned over $165,000, while the remaining 44 supervising attorneys averaged $190,905 in total pay, both excluding fringe benefits. Deputy City Attorneys are paid at their highest salary step of somewhere between $82.97 and $98.44 hourly (up to $204,000 or more annually), although what they charge back to City Departments and Plaintiffs per hour is significantly higher.

Although attorney’s employed by the City are paid, at most, $98.44 per hour, data provided by the City Attorney shows that in the 105 prohibited personnel practice cases, total costs of City Attorney time and expenses ranged from $165 per hour to $263 per hour, suggesting that the City Attorney bills back at an hourly rate far higher than salaries paid to lawyers employed by the City Attorney.

For his part, elected City Attorney Dennis Herrera earned $216,129 in total pay, excluding fringe benefits. He’s paid that, a taxpayer might think, to ensure his employees know what they are doing. And you might think given these attorney’s high salaries, the City’s lawyers would offer expert legal advice and would know what they we’re doing. You might be wrong, on all counts.

Questionable Rationales for “Summary Judgment”

As Mr. Roberts reported in the San Francisco Examiner on April 16, two recent and prominent City employee retaliation cases include “a pair of 9-1-1 [public safety] dispatchers who received $762,000 after City employees violated federal communications law, a jury found,” and Dr. Kerr, who received a $750,000 settlement involving wrongful termination, after complaining about misuse of the Laguna Honda Hospital patient gift fund.

In both cases, the City Attorney attempted to convince both judges in these two cases to grant a “Motion for Summary Judgment” (MSJ), a legal process in which judges make a summary judgment regarding disputed facts prior to a case advancing to jury trial. In both cases, the rationales Deputy City Attorneys used to seek summary judgment calls into question their understanding of the law.

Summary judgment is appropriate when there are no genuine disputes regarding “material” facts in a case; material facts are those that may affect the outcome of a case. Disputes as to material facts are “genuine” when there is sufficient evidence for a reasonable jury to return a verdict for the party in a case who had not sought summary judgment. The party requesting summary judgment bears the initial burden of informing the Court of the basis for its MSJ, and of identifying those portions of a case that might demonstrate the absence of a genuine dispute of material fact.

Deputy City Attorneys in both cases had to have known genuine disputes of material facts did, in fact, remain — and that there was no absence of genuine dispute — but they still petitioned both Judges for summary judgment, possibly driving up unnecessarily the costs of litigation.

Flagrant MSJ Rationale: “No City Municipal Liability”

The most flagrant issue raised in the City’s MSJ in Dr. Kerr’s case involved whether there was any municipal liability at all; municipal liability is determined using the Monell standards.

In the Defendants’ 32-page Notice of Motion for Summary Judgment against Dr. Kerr dated July 5, 2012, creative City Attorneys used four pages to claim that Kerr could not establish that the City was liable for the retaliation Kerr alleged. Defendants claimed Kerr could not assert “respondeat superior” liability against the City under Monell v. Department of Social Services, claiming it is “well settled law that ‘municipalities are answerable only for their own decisions; [and] are not vicariously liable for the constitutional tort of their agents’.” [Note: “Tort” refers to an act that injures a party in some way, for which the injured party may sue a wrongdoer for damages; here, San Francisco tried to assert that it is not vicariously liable if one City employee injured another employee.]

Respondeat superior — Latin for “let the master answer” — is a common-law doctrine that makes employers vicariously liable for actions of their employees, when their employees actions take place within the scope of employment. The doctrine was established in seventeenth-century England to define the legal liability of employers for the actions of their employees, and provides a better chance for injured parties to actually recover damages from injuries caused by an employers’ “agent” working within the scope of their employment.

Defendants attempted to assert there was no Monell liability in Kerr’s case because “Defendants Katz and Hirose did not have final policy making authority” over Kerr’s termination. The City contended it was entitled to summary judgment because Kerr had not established that Katz was a “final policymaker,” arguing instead that it was the Civil Service Commission that had final “policymaking” authority regarding San Francisco employment matters, not Katz or Hirose.

On August 9, 2012, Defendants filed an additional 26-page Reply Brief in Support of Motion for Summary Judgment, using another five pages to claim there was no municipal liability under Section 1983, arguing that Defendant Mitch Katz’s decision-making authority was constrained by other City policies prohibiting retaliation. Defendants brazenly argued that to the extent Dr. Katz or Ms. Hirose had possibly departed from policies prohibiting retaliation, their conduct could not be attributed to the City, arguing in part that Katz could not delegate to Hirose authority he didn’t possess as a final policymaker. Remind me: What rubbish is this?

In her 47-page Order ruling on the 58 pages between the City’s two MSJ briefs, Judge Wilken had to wade through issuing an eight-page analysis dissecting whether Defendants held municipal liability under Monell. Among other observations, Wilken noted the Ninth Circuit Court of Appeals has previously held that City employees to whom decision-making power is delegated, are “not authorized to violate the law,” and it is not sufficient to “insulate a governmental entity from [Monell] liability, ‘without more’.”

While Defendants argued that neither Kerr nor Rivero had subsequently applied for other vacancies on LHH’s medical staff that had become available, the DCA’s neglected to consider that since Katz as the “appointing officer” had made the decision to remove Kerr, Katz would not have been likely to rehire Kerr.

The Defendants tried to argue that a number of Civil Service Commission (CSC) rules for exempt employees constrained Dr. Katz’s ability to terminate Dr. Kerr. Wilken had to remind City Attorney’s that the Defendants’ own CSC “expert witness” had testified that “in general, no one reviews decisions” the Director of Public Health makes to lay off exempt physicians, nobody had the “authority to overrule the director of [public] health’s decisions,” and claimed the Directors’ “decisions can’t be prohibited by law.”

The Defendants’ own “expert witness” also noted that the City’s Human Resources Director does not review lay-off decisions when a complaint involves retaliation based on whistleblowing.

So Judge Wilken had to remind the Defendants’ City lawyers that “by the City’s own admission [the CSC rules] did not constrain Dr. Katz’s decisionmaking or provide for review in any way applicable to [Kerr’s termination],” as the City wrongly claimed.

Wilken observed that the City regulations Defendants cited do not provide for review of termination decisions, and simply required Katz to comply with the law. She further noted that Section 4.115 of San Francisco’s Campaign and Government Conduct Codes that can sanction officers or employees who engage in retaliation does not provide any mechanism for review or reversal of unlawful decisions. Although Defendants suggested Kerr and Rivero could have appealed, the DCA’s failed to acknowledge that there are no appeal procedures whatsoever for exempt employees who are terminated by their “appointing authorities.”

Wilken noted that, by its own terms, Section 4.115 only sets policies prohibiting retaliation against employees who file formal complaints or participate in formal investigations, but does not provide retaliation protections for employees who engage in using First Amendment free speech and subsequently face retaliation.

When will voters demand that San Francisco’s Charter be changed to include basic First Amendment protections for City employees?

After wading through reading 105 pages of motions for and against summary judgment and Judge Wilken’s Ruling, it looks to this author like the weight of evidence in Derek Kerr v. City and County of San Francisco; Mitchell Katz, Mivic Hirose, and Colleen Riley caused the Defendants’ case to fall apart.

Wilken ruled that Plaintiff Dr. Kerr had presented sufficient evidence of Monell municipal liability against the City, and denied Defendant’s MSJ to dismiss Kerr’s Section 1983 claim, putting the City on the liability hook.

City’s “Uncontroverted Facts” Claim Washes Out

At the tail end of Defendant’s MSJ dated July 5, 2012, they petitioned the Court to grant summary judgment in their favor, alleging five separate times that the Defendants “were not on notice” of Kerr’s complaints. They claimed that even if Defendants lost summary judgment, they asked the Court “to issue an order specifying certain facts were uncontroverted in order to narrow the scope of issues for trial.” Instead, Judge Wilken ruled otherwise.

Although Defendants raised many objections to evidence — which evidence and objections Judge Wilken considered — she only discussed and ruled in her Order Granting in Part and Denying in Part Motion for Summary Judgment on the admissibility of the evidence that made a difference in the case, overruling the Defendants’ other objections as moot — irrelevant.

Although Defendants contended the City Charter removes exempt employees such as Kerr through Civil Service Commission rules, Wilken noted that “even if this were true, the Charter and Administrative Code … specifically exclude exempt employees from the authority of the Civil Service Commission for removal procedures,” observing that exempt employees serve at the pleasure of appointing officers such as Dr. Katz, who are allowed to remove employees holding exempt positions without any further review, or an appeals process.

Just as DCA’s in the 9-1-1 dispatcher’s case smeared Ms. Raskin (below), City Attorney’s unnecessarily smeared Kerr. In its August 2012 Reply Brief, DCA’s wrongly claimed “It was Kerr’s enduring sense of entitlement — his refusal to shoulder the heavier workload that every other doctor agreed to — that differentiated Kerr from his peers.” This was clearly a disputed fact, which Kerr’s lawyers disproved. Defendants further smeared Kerr, writing “Plaintiff Derek Kerr likes to swim upstream. He had a comfortable existence at Laguna Honda Hospital, where many of his peers took … divergent paths to address … [needs of the patients]. Kerr refused to follow the [downstream] current.” I wondered, did the City smear Kerr again, really alleging he didn’t address his hospice patients’ needs?

The City Attorney hadn’t originated the smears, he was just “representing” the ad hominem smears, lies, and pretexts concocted by the guilty Defendants he was representing, who were grasping at straws to extricate themselves from their bungled, retaliatory hit-job against Kerr.

As a layperson having read many legal filings, this author was shocked that Defendants resorted to using smears in their legal briefs, smears clearly irrelevant and disproven by factual evidence:

·       KGO, ABC Channel 7, I-Team News Reports, May 2010: Defendants objected to evidence of the multiple investigative news reports that alleged mismanagement of LHH’s patient gift fund, claiming the evidence wasn’t relevant, lacked foundation, and was hearsay. Judge Wilken ruled the Defendants objections were overly vague and failed to provide any explanations why they believed the evidence was objectionable. Wilken noted that evidence of the broadcast news reports was clearly relevant, the evidence had been offered to prove Kerr’s assertion he was terminated as a result of the news reports, and ruled the broadcasts weren’t hearsay. Instead, Wilken ruled that Kerr had established a material dispute of facts as to whether his termination was carried out in retaliation for the ABC7 news reports. Wilken denied summary judgment on the issue.

·       Audit of Patient Gift Fund: The Defendants objected to the City Controller’s audit report of LHH’s patient gift fund, stating the audit was also not relevant evidence, lacked foundation, and was hearsay. Wilken ruled the audit report was clearly relevant to Plaintiff’s claims, and noted that “The fact that the City’s own Auditor found later that there had in fact been misuse of the [patient] Gift Fund is probative [evidence] of Defendants’ motives in terminating Plaintiff.” Wilken also noted that since the audit was issued by the City and was a public record, the report was either non-hearsay or subject to a hearsay exception. Shouldn’t the DCA’s employed by the City Attorney know these rationales won’t survive summary judgment?

·       Protected Speech: Next, although Defendants didn’t dispute that Plaintiff’s formal complaints constituted protected speech, Defendants did argue that Kerr’s public discussion of the Ja Report and gift fund records requests didn’t constitute protected speech. Defendants asserted in their MSJ that Plaintiffs’ public records requests were not protected speech, and were nothing more than requests for information. Defendants further claimed that Plaintiffs’ August 2009 speech concerning the Ja Report during a medical staff meeting — which report recommended replacing doctors with nurses, social workers, and psychologists — was speech that “didn’t address matters of public concern” (as if reducing access to physicians would not be of public concern), it was only speech regarding personnel disputes, and the speech wouldn’t reach the public at large. Judge Wilken disagreed, concluding Kerr’s critique of the Ja Report was protected speech, and that there was a material dispute of fact regarding whether Kerr’s gift fund records requests constituted protected speech.

·       Conflicts of Interest: Defendants claimed that the Plaintiff’s critique of the Ja Report “had not raised any allegations of a conflict of interest,” and that the Plaintiff had first raised the conflict of interest allegation in March 2010. However, Wilken noted that the Plaintiff had, in fact, submitted evidence that the conflict of interest issue had been raised in a September 18, 2009 whistleblower complaint, long before the eventual decision to terminate Kerr had been made. How could highly-paid City Attorney’s have missed this important timeline dispute?

·       Labor Code Violation: Plaintiff had claimed Labor Code Section 1102.5(b) provided protection against retaliation for disclosing information to a government or law enforcement agency if they believed the information disclosed violated state or federal statutes. Defendants argued that Plaintiff had not engaged in protected 1102.5( b) activity, claiming Kerr did not reasonably believe his complaints disclosed an alleged violation of federal or state law; he had not pointed to a specific statute, rule, or regulation that had been violated; and he had not clearly identified prohibited conduct to place the City “on notice” of its potential legal liability.

Although Wilken noted the conflict-of-interest allegations “could have violated several state laws” and that Kerr’s “media and formal complaints about mismanagement of the patient gift fund implicated several state laws,” she ruled that his gift fund records request didn’t point to specific violations of sections of laws (that Wilken then thoughtfully identified), and that media reports were not complaints to a government or law enforcement agency in order to provide Kerr with Labor Code 1102.5(b) retaliation protection. Wilken split her ruling on summary judgment of the 1102.5(b) issue, granting Defendants’ MSJ claim only to the extent Plaintiff alleged retaliation for his formal whistleblower complaints, records requests, and media reports about the gift fund, but denying Defendants’ MSJ claim regarding Labor Code 1102.5(b) to the extent Plaintiff had alleged retaliation for his critique of the Ja Report.

Given her rejection of many of the City Attorney’s dubious rationales seeking summary judgment in Kerr’s case, Wilken ordered that a previous ruling be maintained to begin a ten-day jury trial on November 13, 2012.

It may have only been then that the City began to negotiate in earnest to develop settlement terms with Kerr, perhaps fearing a jury trial might further unravel the City’s nincompoop defense of Katz, Hirose, and Dr. Colleen Riley, and risking greater monetary settlement awards to Kerr.

Specious MSJ Smears of 9–1–1 Dispatchers

In the 9-1-1 dispatcher’s lawsuit, Jane Doe and Anne Raskin v. City and County of San Francisco, the Deputy City Attorney (DCA) claimed there were no disputes involving material fact, and requested that eight claims for relief be granted in their MSJ. In its MSJ, Defendants also smeared Plaintiffs, claiming “Plaintiff Ann Raskin lived a charmed life at DEM prior to the e-mail incident,” a snide statement wholly out of place in a legal filing.

U.S. District Court Judge Thelton Henderson granted only one of the City Attorney’s dubious claims for summary judgment, and denied the City’s other seven claims, including:

·       Federal Stored Communications Act. Plaintiff Jane Doe claimed her private e-mail had been improperly searched by Defendants over an 18-month period on a shared computer, and was bullied and harassed by supervisors as a result. Defendants asserted there had been no search of any kind, and that Plaintiffs had no expectation of privacy — and even if the e-mails had been searched, it wasn’t a “serious” offense, which Plaintiffs refuted. DCA’s snarked, “Doe and Raskin decided that their best defense was a good offense,” and asked for summary judgment to dismiss each of the Plaintiffs claims.

DCA’s asserted that Defendant’s inadvertent discovery of Plaintiffs work-related, but personal e-mail account documents viewed on a shared computer, did not constitute a “serious invasion” of Plaintiff’s privacy. Since both sides had presented evidence supporting each version of events, Judge Henderson ruled there was a genuine issue of material fact for the jury, denying Defendants claim for summary judgment on the issue.

·       Privacy Claims: Plaintiffs alleged there was a reasonable expectation of privacy, given their union contract that explicitly states “employees [covered by the contract] shall have a reasonable expectation of privacy,” which labor agreement City lawyers must have known about. Ignoring the union contract, the DCA’s argued there was no such reasonable expectation. The Judge ruled that facts around the alleged violation of Jane Doe’s e-mail account were clearly in dispute, such that summary judgment wasn’t appropriate.

·       California Labor Code Claims: Defendants moved for summary judgment on Labor Code claims contending Plaintiffs had failed to exhaust administrative remedies through other channels. Since the Plaintiffs conceded they had not exhausted administrative remedies, the Judge granted summary judgment only on this single issue.

·       Gender Discrimination Claims: Plaintiffs alleged that the abusive mistreatment they received from their female supervisors would not have occurred had the Plaintiffs been men, since men in their workplace would not have been treated in the same manner. Defendants argued that the Plaintiffs claim of woman-on-woman discrimination seemed improbable, as if City Attorneys have never heard that women can, and do, discriminate against one another, just as men do. Since the facts underlying this claim were in dispute, the Judge ruled it a proper issue for a jury’s determination, and found it inappropriate to grant summary judgment.

·       Sexual Harassment Claim: Plaintiffs pointed to case law allowing circumstantial evidence of gender-based abuse, and contended the conduct they endured had occurred. DCA’s representing the Defendants contended the conduct was nothing more than reprimands concerning the Plaintiffs work performance, not sexual harassment. Judge Henderson ruled that there were actual disputes to the material facts regarding this issue, ruling summary judgment was inappropriate.

·       Failure to Prevent Claims: The Defendants entire argument was that there was no triable issues involving Plaintiffs claims of discrimination, harassment, or retaliation and, therefore, no misconduct had occurred that could have been prevented. Therefore, if the Court found there was a triable issue on these claims, the Defendants had made no other argument as to why the claims should be decided on summary judgment. Plaintiffs pointed out it is unlawful for employers to “fail to take all reasonable steps necessary to prevent discrimination and harassment from occurring, but that the City and County of San Francisco did nothing to step in, or investigate” Plaintiffs complaints. Since material facts underlying the claim were in dispute, Judge Henderson again ruled summary judgment would be inappropriate.

·       Retaliation Claims: The Court noted that Defendants “largely lump their retaliation argument in with their argument about the Plaintiffs’ whistleblower claims.” While the Defendants presumably disagreed with Plaintiffs contention that bullying, abuse, and negative treatment had occurred in the workplace, the Defendants devoted their argument to Plaintiffs’ “failure to exhaust remedies.”

Judge Henderson noted that the Defendants’ argument was undermined by another court case that held that employees who suffer employment-related discrimination are not required to exhaust internal administrative remedies before filing discrimination claims. Again, shouldn’t the City and its DCA’s have known this all along? Judge Henderson noted the disagreement between the two parties regarding retaliation claims was factual and was, therefore, inappropriate for summary judgment.

·       Intentional Infliction of Emotional Distress: Defendants appear to have wrongly asserted that Plaintiffs’ emotional distress claim duplicated their Fair Employment and Housing Claim. The Court had to point out to Defendants’ DCA’s that it is established law that Plaintiffs can allege both employment discrimination and additional intentional infliction of emotional distress. Yet again, shouldn’t the DCA’s — or at least their supervisor, the City’s Chief Labor Attorney Elizabeth Salveson, who was paid $184,827 in calendar year 2012 — have known this?

Instead, the DCA’s contended the conduct in question didn’t rise to emotional distress, and was merely “rigorous, difficult training that dispatcher’s must go through.” Judge Henderson again ruled the dispute involved a question of fact that had to be presented to a jury, not determined via summary judgment.

As with Dr. Kerr’s case, the City attempted to claim that the 9-1-1 dispatcher lawsuit had not identified specific violations of law by citing a particular statute, rule, or regulation that prohibited an illegal activity that was violated by the conduct complained of. The City claimed that for a complaint to be protected and upheld, the complaint must specify violations of law by citing a relevant statute that was violated.

“The Truth [of Retaliation] Was True”

By denying seven of the Defendants’ eight claims for summary judgment, Henderson effectively moved Jane Doe and Anne Raskin v. City and County of San Francisco to trial. At trial, the jury ruled in Doe and Raskin’s favor, and they were eventually awarded the $762,000 settlement, suggesting that the City — City Attorney Dennis Herrera and his legal defense teams — often barks up the wrong tree, tossing out flaky defense strategies hoping to see what will stick on the wall.

To do that, Herrera’s team not only resorted to using ad hominem smears against Plaintiffs Kerr and Doe and Raskin, they used wrongful claims and disingenuous arguments, and ended up acting just like their clients — the Defendants.

Such strategies drive up the time and costs of litigation, costing taxpayers millions of dollars, and forcing opposing counsel and judges to wade through the muck of what is, essentially, garbage proffered as the City’s legal defense. Desperate to prevail, the City Attorney continues doing so, anyway.

“The City Attorney used every trick in the book — but the evidence of Laguna Honda Hospital’s wrongdoing was so overwhelming, that they were forced to settle,” notes Dr. Rivero. “It took us three years to convince the City Attorney — and the Court — that the truth was true,” she laments.

If Kerr’s and the 9-1-1 dispatchers lawsuits prove nothing else, the two cases demonstrate that all too often the City Attorney defends City officials against City employees and the very citizens paying the miscreant officials’ bloated salaries.

After all, between the settlement awards and the City Attorney’s costs fighting the prohibited personnel practices, we’re talking about a minimum of at least $20 million that was a completely preventable, unnecessary expense, had careless City managers who bullied City employees simply followed existing personnel law.

It’s long past time to confront the City Attorney’s spurious legal advice, which appears to be costing taxpayers millions that could be better spent on other City needs.

Monette-Shaw is an open-government accountability advocate, a patient advocate, and a member of California’s First Amendment Coalition. Feedback:

A Comical Postscript

In a comical twist of irony, City Attorney spokesman Matt Dorsey rises again.
On May 16, the San Francisco Examiner reported that the day before a former internal affairs attorney for the San Francisco Police Department — Kelly O’Haire — filed a wrongful termination and whistleblower lawsuit in San Francisco Superior Court against Police Chief Greg Shur, against the Police Department, and presumably, against the City.

O’Haire’s job involved investigating and prosecuting misconduct claims against San Francisco Police Department members, and bringing misconduct cases before the Police Commission. O’Haire alleges she was fired in retaliation for having investigated Greg Shur when he was a high-ranking official before being appointed Police Chief. She sought Suhr’s termination in 2009 for an alleged pattern of misconduct and policy violations. Following Suhr’s appointment as Police Chief in April 2011, O’Haire was terminated within a month.

Dorsey is comical: On May 15, the Marin Independent Journal carried an article by Gary Klein reporting on O’Haire’s lawsuit. Dorsey, City Attorney Dennis Herrera’s spokesman, asserts O’Haire’s lawsuit “lacks merit.” Dorsey was quoted as saying “The City Attorney is going to vigorously defend the Police Department, and we’re going to do everything we can to protect taxpayer dollars.”

This is the same City Attorney’s Office that settled the 105 prohibited personnel practice cases for the princely sum of $12.1 million, and the same City Attorney who spent $8.3 million fighting the 105 cases, for a combined waste of $20.4 million in taxpayer funds. And that’s not including the $1.3 million of taxpayer funds racked up in City Attorney time wasted during the City Attorney’s inept proceedings on behalf of Mayor Ed Lee to oust Sheriff Ross Mirkarimi for alleged official misconduct. After wasting fully $22 million, Dorsey now wants us to believe the City Attorney is trying to "protect" taxpayer dollars?

Supervisor Jane Kim noted during the Board’s vote to remove Mirkarimi that the charges against the Sheriff — developed by the City Attorney on behalf of the Mayor — did not rise to the City Charter’s definition of official misconduct, and that the Ethics Commission had not found that Mirkarimi had used his official duties to commit wrongdoing. Kim voted against removing the Sheriff, indicating that a clear, articulable test to remove public officials had not been established. To that extent, the persecution of Mirkarimi was a complete waste of $1.3 million in City Attorney time, at taxpayer expense, which appears to have escaped Mr. Dorsey.

Chances are that as O’Haire’s case plods through the court system, the City Attorney will likely mount spurious reasons for a motion for summary judgment. But O’Haire will likely prevail and will probably win a significant settlement amount, while the City Attorney wastes more taxpayer funds spending thousands of hours fighting O’Haire.

After all, this is San Francisco, where whistleblowing City employees who expose wrongdoing of high-level members of the “City Hall Family” — for example exposing the City Family’s former Director of Public Health Mitch Katz, former Housing Authority Director Henry Alvarez, and now Police Chief Greg Suhr — face 100% retaliation, bullying, and wrongful termination. Is the 100% retaliation rate a new San Francisco “value”?

The print edition of this Westside Observer article was a condensed version; this expanded version — providing additional details of the spurious rationales the City Attorney used seeking summary judgment, a status update on Kerr’s non-monetary settlements, and data regarding costs of prohibited personnel practices —Is available on-line at

May 2013

Laguna Honda Hospital's Whistleblower Retaliation

The $750,000 Wrongful Termination Affair

Dr. Derek Kerr and Dr. Maria Rivero at City Hall
Retaliation against Laguna Honda Doctors reveals how the City does business

Three years after jointly filing three whistleblower complaints with his colleague Dr. Maria Rivero, Dr. Derek Kerr's wrongful termination settlement agreement was finally approved on second reading by San Francisco's Board of Supervisors on March 26, awarding him $750,000 in monetary damages and other non-monetary awards.

Kerr's settlement is one of the largest pre-trial (out-of-court) settlements in San Francisco history, although post-trial settlements have been larger.

Like many great mysteries, the great Laguna Honda Hospital Patient Gift Fund scandal of 2010 started with some curiosity, ethical concerns, and a compelling public-interest question: If the fund was nearing "bankruptcy," what had happened to the money?


…they believed the law … which clearly prohibits termination, demotion, or suspension of City employees as retaliation for reporting waste, fraud, and inefficiencies in City government to the Ethics Commission, City Controller, District Attorney, or
City Attorney."

When former Laguna Honda physicians Kerr and Rivero put on their detective hats, neither expected that the age old question "show us the money" would quickly result in prompt retaliation, harassment, and wrongful termination. Neither did they expect Kerr would eventually win the largest pre-trial settlement in City history.

At the outset of their sleuthing, they believed our democracy functions only when citizens know what our government is doing. Believing public participation is essential to our democratic process, the two doctors take seriously their role to speak as patient advocates.

The sordid patient gift fund mystery started with a classic example of mismanagement over a small issue — reimbursement to Dr. Rivero for a mere $100 she had spent for tacos for LHH's Spanish Focus ward in September 2009. The taco luncheon was to celebrate Fiestas Patrias — Latin America's Independence Day — on a ward where the majority of patients had various forms of dementia. Told that the $2 million gift fund was nearing insolvency and couldn't reimburse her, Rivero and Kerr became gumshoes when they requested and began researching 10 years of gift fund public records on October 31, 2009.

the so-called apology letter
Official Apology from Laguna Honda to Dr. Derek Kerr: Buried in an update to the Health Commission, the apology, rarer than hen's teeth and even more valuable, possibly saved the City more than a million dollars. Had they refused to apologize and continued through with the lawsuit, so many laws were broken that a jury would probably have awarded considerably more.

After examining thousands of pages of public records and placing serial records requests, the pair felt they had no ethical choice but to file an Ethics complaint on March 2, 2010, which clearly documented mismanagement of the patient gift fund. Just hours after submitting copies of their whistleblower gift fund complaint with the Ethics Commission on March 4, it reached the District Attorney and retaliation against them was set in motion, after they had simply exercised their First Amendment rights to free speech.

When San Francisco Department of Public Health officials wrongly retaliated by notifying Kerr orally on Friday, March 5, 2010 that his employment would be terminated, the officials had to have done so willfully. The officials should have known that they would be violating the First and Fourteenth Amendments to the U.S. constitution, other Federal law, at least three State laws, and San Francisco's own Administrative Code that prohibits retaliation.


This has so many themes that reverberate throughout City Hall – the influence of
private money, the misapplication of
purpose of the money, the automatic defense of incompetent administrators, and most of all the acceptance of corruption as "business as usual" all the way to the top."
James Chafee

If the City had hoped to silence Kerr by firing him, the retaliation backfired, leading the whistleblower doctor to not only speak out more forcefully, the retaliation led to a huge settlement when Kerr prevailed in his wrongful-termination lawsuit.

As Dr. Kerr and Dr. Rivero wrote in their July 2012 Westside Observer article, "Secret Investigations," whistleblowers should not be silenced in the resolution of the alleged misconduct they risked their careers to challenge. But that's exactly what the City of San Francisco attempted to do: To silence the pair of doctors.

When Dr. Kerr and Dr. Rivero filed a trio of Ethics complaints, they believed that a collection of laws would protect them from retaliation. They believed that their fundamental First Amendment rights to free speech and their Fourteenth Amendment rights to due process would protect them from exposing fraud, waste, and corruption. They believed 42 U.S.C. §1983, which provides protections for citizen's injured by deprivation of Constitutional rights and which provides redress for violations of due process, would help protect them. They hoped that the federal Whistleblower Protection Enhancement Act of 2012 might help protect them.

They believed that California Government Code §53298, California Health and Safety Code §1432, and California Labor Code §1102.5 — which each provide separate prohibitions against employee retaliation — would protect them.

And they believed the letter of the law in San Francisco Administration Code §4.115, Protection of Whistleblowers, which clearly prohibits termination, demotion, or suspension of City employees as retaliation for reporting waste, fraud, and inefficiencies in City government to the Ethics Commission, City Controller, District Attorney, or City Attorney.

Kerr and Rivero were wrong. None of these so-called "laws" ended up protecting them, and Kerr was forced to sue after being wrongfully terminated.

"I didn't want to sue the City," Kerr testified to the Board of Supervisors Rules Committee on March 7, 2013. "But Dr. Maria Rivero and I stumbled upon wrongdoing involving Laguna Honda Hospital's CEO that we couldn't ignore," he testified. [Editor's Note: Kerr was diplomatically referring to Mivic Hirose, LHH's then- and current-CEO.]

A Public Spanking: Kerr's Settlement Award

Kerr and Rivero were represented by the law firm of Kochan & Stephenson — Deborah Kochan and Mathew Stephenson — whose law practice is devoted entirely to representing employees who have suffered discrimination, harassment, retaliation, or — as in Dr. Kerr's case — retribution for whistleblowing.


Dr. Rivero testified, "What is the message you send when a CEO … is still in office?
It shows that you condone whistleblower
retaliation and violations of laws that
protect whistleblowers
." Rivero added,
"It shows that you will accept executives
who pilfer public funds donated to the poorest of the poor
, violating a sacred trust."

In addition to Kerr's $750,000 settlement award, there were a number of non-monetary concessions that amount to a public spanking and public apology that are important to him, including:

  1. A retraction of the "Statement Concerning the Laguna Honda Gift Fund" posted on LHH's website by Katz and Hirose on September 2, 2010 alluding to Kerr and Rivero as "detractors" who had intentionally made false or inaccurate statements regarding the patient gift fund, since the September 2010 letter presented incorrect representations of the two doctors. The retraction will be via a notice signed by the Health Department's current director, Barbara Garcia, to be posted on DPH's web site within 10 business days following final approval of the settlement by the Board of Supervisors on March 26, for a minimum 10-month period.
  2. LHH must install a plaque as soon as practicable in a clearly visible location, recognizing Kerr's contributions to the hospital generally, and his contributions to LHH's Hospice and Palliative Care Program in particular, in either LHH's new Hospice or the gazebo/garden area, once it is completed.
  3. LHH must provide Kerr, within 10 business days of the final settlement approval, a commendation letter signed by defendant Colleen Riley, MD, and LHH's Chief of Staff, Steven Thompson, MD, stating that Kerr was a physician in good standing and widely respected by his LHH colleagues for his skills and accomplishments as a hospice and palliative care physician, and commending his work establishing and running LHH's hospice and palliative care program.
  4. LHH's CEO, Mivic Hirose must announce at both the next scheduled meeting of the Health Commission and the next meeting of LHH's 40-member Senior Staff/Leadership Forum, both the pending installation of Kerr's plaque and read into the minutes the letter signed by Riley and Thompson.
  5. The City must provide training to LHH's Executive Committee regarding whistleblower rights, and First Amendment rights, of City Employees.

For their part, Kerr's lawyers Kochan and Stephenson, note: "In our experience, negotiating non-monetary terms as part of a settlement is relatively rare. But here, we believed it very important that LHH's administration publicly acknowledge the lies they told about Drs. Kerr and Rivero, as well as acknowledge the extraordinary service the two MD's provided to the community during their long and distinguished careers at LHH."

As for the two doctors, the monetary and non-monetary awards help convey that their complaints had all along been valid, and that wrongful, retaliatory termination and harassment had ensued.

The Defendants

Dr. Kerr — a former physician in good standing at Laguna Honda Hospital for over 21 years — filed a lawsuit seeking monetary and non-monetary damages, in part, to recover his good name.

Named as defendants in his lawsuit were the City and County of San Francisco and three named individuals — Dr. Mitchell Katz, former Director of Public Health; Mivic Hirose, RN, Laguna Honda Hospital's Executive Administrator; and Colleen Riley, MD, Laguna Honda Hospital's Medical Director.

Legal documents filed in the case show the defendants may have been motivated by retaliatory animus towards Kerr. They subjected him to retaliation for having brought complaints related to the care of patients and services at LHH. Had Kerr's case proceeded to trial, it is very likely a jury would have concluded the defendants had been highly motivated to silence Kerr by subjecting him to retaliatory termination — and a jury would likely have awarded him much more than three-quarters of a million dollars, if for no other reason than sympathy for LHH's patients.

Basis of Kerr's Lawsuit

Dr. Kerr's Complaint for Damages and Demand for Jury Trial lawsuit filed in San Francisco Superior Court on November 16, 2010 — subsequently transferred to a Federal District Court over First Amendment freedom of speech issues — listed five causes of action for violations of Federal and State law:

  • • Deprivation of his First Amendment freedom of speech activities;
  • • Deprivation of due process rights guaranteed by the Fourteenth Amendment;
  • • Violation of California Government Code §53298 that prohibits reprisals against employees who file complaints regarding gross mismanagement or a significant waste of funds, or an abuse of authority;
  • • Violation of California's Health and Safety Code §1432 that prohibits discrimination or retaliation against employees for initiating or participating in proceedings relating to care, services, or conditions of a long-term health facility; and
  • • Violation of California Labor Code §1102.5 that prohibits retaliation against any employee for disclosing information to a government or law enforcement agency when an employee has reasonable cause to believe that the information discloses a violation of state or federal statutes, or a violation or noncompliance with a state or federal rule or regulation.

Four of the five causes of action noted that the individual defendants participated in, directed, or knew of the retaliatory termination, and they collectively failed to act to prevent it. The causes of action also alleged that the gross retaliation by the individual defendants was done with malice, fraud, or oppression, in reckless disregard of Dr. Kerr's constitutional rights.

The Set Up: Pretext for Termination

According to Kerr's lawyers' "Plaintiff's Opposition to Defendants' Motion for Summary Judgment," dated August 9, 2012, there were a number of reasons to suspect the defendants manufactured various pretexts to justify terminating Kerr.

It appears that Dr. Katz and Ms. Hirose had already determined by December 15, 2009 that they were going to lay off Dr. Kerr, hoping to shut him up. They needed a pretext, or pretexts, to do so, since Kerr and Rivero's Sunshine requests on October 31, 2009 for patient gift fund records had put Katz and Hirose on notice that they were under scrutiny for a host of improper, if not illegal, practices. Hirose had to have known there was a lot at stake over her management, or mismanagement, of the patient gift fund, and that she was likely in deep trouble.

After all, by that point Kerr and Rivero had already filed in September 2009 two Whistleblower complaints about DPH contracts tainted by conflicts of interest, and had put the City on notice with their October 31 request for 10 years of patient gift fund public records that the two whistleblower doctors were serious about investigating the gift fund scandal. The defendants knew Kerr's and Rivero's records requests were very serious, and that the two doctors had a demonstrated record of investigating and thoroughly analyzing data. Hirose was on notice that she was under Kerr's and Rivero's microscope, and that it could be damaging to Hirose's career.

Much of the City's defense regarding Kerr's termination was pretextual — pretexts the City manufactured to justify his dismissal, but were actually pretexts for retaliation. The pretexts to lay off Kerr included false claims that:

  • Kerr was terminated as a mid-year budget savings reduction, claiming a budget crisis. During FY 09-10, DPH had nearly 8,000 employees on its payroll, but only one employee — Dr. Kerr — was terminated, ostensibly to "save money." Notably, LHH's Medical Services Department staff increased by 10% after Kerr's layoff, and the physician who replaced him — Dr. Denis Bouvier — quickly zoomed to being the City's highest-paid employee, earning $332,000 that year. In addition, the City added a Clinical Nurse Specialist, Anne Hughes, RN, PhD, to the Hospice's budget, paying her $160,000 annually. LHH's expenses on Hospice, and throughout the hospital, went up after Kerr's "mid-year budget reduction" layoff. Obviously, money wasn't the problem, but a clear pretext for retaliation.
  • Kerr had limited himself to a 25-patient case load and was unwilling to take on additional patients, even if keeping his job depended on it.
  • The hospice physician in the new hospital would have to carry a 60-patient case load, which didn't apply to doctors on admitting wards, such as the Hospice where Kerr was an admitting physician.
  • Kerr wouldn't cover wards outside the Hospice, clearly disproven during depositions.
  • The hospice would be undergoing a "fundamental program change," which Hirose eventually testified there had never been any discussion about a "program change."
  • Kerr was terminated for budgetary reasons, which was false because when Kerr left LHH in June 2010, he was immediately replaced by another budgeted physician.

Another glaring pretext was Hirose's claim that her decision in mid-December 2009 to terminate Kerr was based on information Dr. Riley had provided indicating Kerr was unwilling to take on covering additional Wards.

During depositions, Riley indicated that she hadn't reported to Hirose Kerr's reluctance to take on additional ward coverage until late February 2010, and that she, Riley, had never asked Kerr if he was willing to take on more patients if retaining his job depended on it.

During Hirose's own initial deposition, she was unable to explain the impossibility of knowing in mid-December 2009 an allegation about Kerr from Riley, since Riley testified she had not shared this information with Hirose until late February 2010. The conversation with Riley that Hirose claimed to have relied on to terminate Kerr wouldn't happen for at least a month until after she and Katz had already cooked up a pretext to eliminate Kerr.

In a follow-up to Hirose's deposition nine months after her first deposition, Hirose sill couldn't explain the "timing problem" that had made her explanation to terminate Kerr clearly impossible, given Riley's false claim that Kerr wouldn't take on additional patients. As set-ups and pretexts often are, Hirose's claim that Kerr wouldn't provide additional Ward coverage was completely insane.

Depositions: Discovery Mountain

Given public records in the case, the mountain of evidence against the City obtained during discovery and depositions in Kerr's case was appalling.

During depositions and discovery, one defendant after another was crushed. Kerr's lawyers deposed a dozen or so City employees; the City Attorney, in return, deposed only Kerr and Rivero. The City didn't bother deposing Kerr's union, UAPD, knowing that the union's deposition would likely be damaging against the City. Kerr's lawyers obtained approximately 3,000 pages of documents and issued multiple interrogatories.

Eventually, the City realized how bad their case looked for Laguna Honda and the Department of Public Health after its own witnesses performed poorly during depositions, and when plenty of smoke rose during discovery.

The City stonewalled Kerr's lawsuit for two years, until his case was finally scheduled for jury trial on November 13, 2012. In mid-summer 2012, the City submitted a Motion for Summary Judgment that would have effectively dismissed Kerr's case had the motion succeeded. Kerr's lawyers submitted a Plaintiff's Opposition to the City's Motion for Summary Judgment on August 9, stating that given the "genuine issues of disputed fact … the defendants' motion for summary adjudication … should be denied."

Judge Claudia Wilken denied the City's Motion for Summary Judgment in part and approved it on other parts in a 47-page ruling dated September 6, 2012. Wilken's Order Granting In Part And Denying In Part Motion For Summary Judgment noted: "Plaintiff has offered sufficient evidence that he disclosed to his government employer possible violations of state or federal law based on the conflicts of interest involving Dr. Ja and Ms. Sherwood in [Kerr and Rivero's] "A Job Half Done" critique, and that this was causally connected to his termination."

Wilken also wrote: "[Kerr's] media and formal complaints about the mismanagement and misuse of the Gift Fund also implicated several state laws … However, the public records requests related to the Gift Fund did not show any reasonable belief on Plaintiff's part that he was disclosing alleged violations of [several] sections [of California's Business and Professional Code]. The media reports about the Gift Fund were not complaints directed to a government or law enforcement agency, as required to come under the protection of [California Labor Code] section 1102.5(b)."

Wilken's partial denial — which kept Kerr's lawsuit alive and headed to jury trail — suggests the City then knew it had to settle with Kerr or risk a jury's outcome, since it appeared Kerr had a potentially valid case. Only when the City realized it was on notice to proceed to jury trial did it conclude negotiating an equitable settlement with Kerr.

Laughably, the defendants appeared to have argued that Kerr's speech was not protected by the First Amendment because it "did not address matters of public concern," and would not reach the public at large, as if the raid of funds intended for patients didn't concern public donors to the fund. The City also lamely tried to exonerate the defendants by claiming that Kerr's and Rivero's serial requests for gift fund records was not protected speech because it was "nothing more than a request for [public] information." To support its defense, the City ignored that defendant Hirose had lied repeatedly about the status of the Gift Fund as it existed in late 2009, according to legal documents.

The City also attempted to exonerate Director of Public Health, Mitch Katz, claiming Katz wasn't a policymaker "decider," he was simply a decision-maker. Katz had delegated to Hirose the decision of which staff to lay off (terminate), but Kerr's lawyers adroitly noted that layoff decisions were within the sole discretion of the Director of Public Health, Katz, responsibility for which could not be avoided by delegating that decision to Hirose.

The City also attempted to assert that the Civil Service Commission, not the DPH's Department Head, had final policymaking authority to remove Kerr, though that assumption is supported neither by facts nor applicable law, since appointments of doctors are exempt from Civil Service merit system protections and, instead, serve at the pleasure of their appointing authorities.

The defendants conceded that Katz made a deliberate choice fingering Kerr for layoff from among several competing proposals on how to implement mid-year budget reductions. Katz could have, but failed to, rescind Kerr's layoff notice. Instead, Katz participated in, and explicitly supported, Hirose's decision to terminate Kerr.

Commenting on the discovery and deposition process, Kerr's lawyer Deborah Kochan says, "The deceitfulness and small-mindedness exhibited by members of LHH's administration and its Human Resources Department was, at times, breathtaking."

"The City was boxed in by the inconsistent accounts of its own witnesses and the absolute nonsense of some of their testimony on critical issues," adds Kochan's law firm partner, Mathew Stephenson.

Acting Under "Color of Law": A Federal Crime

42 U.S.C. §1983 provides that every person acting under the "color of law" who causes any United States citizen to be deprived of any Constitutional rights shall be liable to the party injured. "Color of law" involves actions taken that superficially appear to be within an individual's lawful power, but are actually in contravention of the law. Acting under "color of law" is misuse of power, since it involves acting under real or apparent government authority by people who misuse their authority to violate rights guaranteed by federal law. Depriving a person of his or her federal civil rights under color of law is illegal and grounds for a cause of legal action.

The City acted under the color of law when it deprived Dr. Kerr of his First Amendment rights to freedom of speech. He was terminated, in part, because he had spoken out on various matters of public concern; he had spoken as a private citizen, not as a public employee; and his protected speech was a substantial or motivating factor in the City's termination of him.

By reaching a settlement agreement with Kerr for monetary and non-monetary damages, the City has effectively acknowledged that Riley, Hirose, and Katz had engaged in misuse of power and misuse of their authority, depriving Kerr of his Federal civil rights. Despite this, Riley and Hirose are still employed at Laguna Honda Hospital, while Dr. Katz suddenly and mysteriously vanished.

Katz abruptly moved to Los Angeles after the LHH patient gift fund scandal exploded, and after Kerr and Rivero had filed their complaints about tainted DPH contracts. Katz's sudden departure may have been coincidental, but it was completely odd, given he had previously stated he wanted to remain as Director of Public Health until the rebuild of the new San Francisco General Hospital was completed. It's unknown whether the City Attorney, or other City Hall Family insiders, had advised Katz to quickly resign when the issue of his HMA consulting fees income became widely known.

During the Board of Supervisor's Rules Committee meeting on March 7, 2013 at which it recommended approval of Dr. Kerr's settlement agreement, Dr. Rivero testified, "What is the message you send when a CEO [such as Hirose] who retaliated against a whistleblower is still in office? It shows that you condone whistleblower retaliation and violations of laws that protect whistleblowers." Rivero added, "It shows that you will accept executives who pilfer public funds donated to the poorest of the poor, violating a sacred trust."

That Hirose and Riley remain employed at LHH is shocking in a City that pays a lot of lip service claiming it believes in transparent, open government and public accountability.

Series of Whistleblower Complaints

Drs. Rivero and Kerr filed three complaints through the Controller's Office and the Ethics Commission regarding fraudulent practices in the Department of Public Health, including:

  • On September 18, 2009, Kerr and Rivero filed their first complaint alleging an improper award of a contract to a City employee's relative, regarding what became known as the "Ja Report." In July 2009, Davis Ja and Associates prepared a report examining mental health services for LHH's residents; defendant Hirose served on the selection panel that awarded Ja his first contract to survey LHH. The Ja Report recommended replacing Laguna Honda doctors with social workers, psychologists, and nurses.

    Drs. Kerr and Rivero regarded the reduction in the number of physicians as a threat to, and would negatively impact, the quality of patient care. The Ja report was so deeply flawed that Kerr and Rivero co-authored a 25-page Critical Analysis: The Ja Report – A Job Half Done, highlighting the flawed methodology of Ja's report and recommendations. Of 22 physicians on LHH's regular Medical Staff, 20 (91%) co-signed a petition supporting Rivero's and Kerr's thoughtful Critical Analysis, which detailed serious, ethical conflicts of interest involving several high-level managers in the Department of Public Health. Subsequently, Ja was awarded an additional multi-million dollar contract.

    Kerr and Rivero then discovered the additional contract had more than likely been steered to Ja by his wife, Deborah Sherwood, a senior manager in the Health Department's Community Behavioral Health Services unit. Despite the two doctors' numerous attempts to bring this improper and probably illegal contract award to the attention of City officials, nearly two years after filing their whistleblower complaint regarding Ja, the City Controller finally stepped in and abruptly terminated Ja's additional contract, withholding over $400,000 in remaining contract funds.
  • Three days later, on September 21, 2009, Kerr and Rivero filed a second complaint alleging that the then Director of Public Health, defendant Mitch Katz, may have engaged in a conflict of interest by accepting — according to FPPC public records — somewhere between $30,000 and $300,000 in consulting fees from Health Management Associates (HMA), a City contractor performing consulting services for the Department of Public Health. Both San Francisco's Conflict of Interest policies and the California Political Reform Act prohibit government employees from participating in making of contracts with companies in which they have a financial interest.
  • On March 2, 2010, Rivero and Kerr filed their third complaint regarding the raid of LHH's patient gift fund, which scandal has been thoroughly reported in past issues of the Westside Observer over the past three years. The scandal was also broadcast in two KGO I-Team investigative reports in May 2010, which defendants Katz and Hirose had viewed, and which Katz and Hirose had responded to by publically posting on LHH's web site a statement that Kerr and Rivero were mere detractors who were making false statements.

    The two doctors had discovered that patient funds had been quietly diverted to three separate accounts for staff perquisites and amenities, and increasingly used for the "comfort and benefit" of staff and administrators, instead of patients. This feat was engineered by LHH's then Executive Director, John Kanaley, who had quietly authorized setting up accounts for staff training within the patient gift fund, and had permitted inter-account transfers for staff amenities.

    The City Controller's audit of the clear misappropriation of charitable contributions intended for patient amenities languished for months, but the Controller's highly-publicized audit finally ordered in November 2010 return of $350,000 improperly removed from the gift fund. [Editor: The City Controller's restoration of funds to the patient gift fund is available in the Westside Observer's December 2010 issue, at "Controller Restores $350,000 to Laguna Honda's Patients."]

Who Are These Two Doctors?

Rivero and Kerr take their professional and ethical obligations as doctors seriously. They passionately believe, having taken the Hippocratic oath to first do no harm, that among their responsibilities is to fully embrace advocating for patients.

Derek Kerr, MD, CNA attended Harvard Medical School, did his residency at Harlem Hospital and his Oncology Fellowship at Memorial Sloan-Kettering Cancer Center. He has the rare distinction of being Board Certified in three separate medical specialties: Internal Medicine, Medical Oncology, and Hospice and Palliative Medicine. Following his medical education and years of practicing medicine, he went back to school and became a Certified Nursing Assistant in 1988 to better understand patient care from a nursing perspective. Kerr was the Attending Physician of Laguna Honda's Hospice for 21 years, was listed as LHH's Palliative Care Consultant on the Medical Staff roster, and had been the Attending Physician assigned to LHH's "Hospice and Palliative Care" service since 1994. During his tenure, LHH's Hospice was widely acclaimed, receiving a national award. Kerr was Chair of the Bioethics Committee at Fairmount Hospital prior to employment at LHH.

Maria Rivero, MD, FACGS, graduated from UCSF Medical School and completed her residency at Beth Israel Hospital/Harvard Medical School. She is Board Certified in both Internal Medicine and also Geriatrics, and is a Fellow of the American College of Geriatrics Specialists. She also has been a Certified Eden Alternative Associate since 1998. Rivero worked at Laguna Honda Hospital for 22 years, and served as LHH's Medical Director and its Assistant Medical Director between 1997 and 1999.

As former co-workers at LHH, Rivero and Kerr were highly regarded by hospital staff as among the best doctors in the hospital. As a team, they became whistleblowers at great professional risk to their careers; their core belief in ethical behavior led them to become whistleblowers, even though they never imagined initially that they would ultimately become involved in exposing fraud and corruption.

Correcting the Record: "No One Spoke Up"

In April 2012, as Kerr's lawsuit dragged on, another former physician at Laguna Honda Hospital, Dr. Victoria Sweet, published her 348-page memoir about the hospital, titled God's Hotel, which was riddled with errors and which, among other flaws, contained not one date to place her reporting into chronological or historical perspective. Among many other errors, Sweet incorporated three glaring untruths about Dr. Kerr. Sweet should have known better, since events in Kerr's lawsuit had been unfolding for fully two years before she published her memoir. Sweet never bothered fact checking with Kerr or Rivero during the years she spent writing her memoir.

First, Sweet wrongly reported that a "Dr. Talley" — the pseudonym Sweet assigned to Laguna Honda's medical director, Dr. Colleen Riley, one of the named defendants in Kerr's lawsuit — claimed that it had been she, Dr. Talley, who had made the decision to terminate Dr. Kerr. Sweet reported that "Dr. Talley" announced during her first meeting as Medical Director of Laguna Honda's medical staff, that it had been "entirely her decision" to lay off Dr. Kerr, and that then Director of Public Health Mitch Katz and LHH's Executive Administrator Mivic Hirose had had nothing to do with the decision to terminate Kerr.

In fact, Mivic Hirose herself has claimed elsewhere that it was entirely her decision — not Dr. Riley's — to terminate Dr. Kerr. Indeed, during depositions in Kerr's case, it appears that Katz and Hirose decided on December 15, 2009, or earlier, to lay off Dr. Kerr, several weeks before Riley was appointed Medical Director at the end of December. When she learned of Katz's and Hirose's decision to target Kerr, Riley did nothing as Medical Director between January and March to stop the clear retaliation.

Next, Sweet wrongly opined that one of Dr. Kerr's "principles" was that he would only take care of his own patients [at LHH, and that] he "almost never took call, or helped out, or covered other wards. So no rebellion broke out [when Kerr was terminated], and no one spoke up [when the Bell Tolled for Dr. Kerr]." But during discovery in Kerr's case, LHH produced Ward Coverage Schedule records showing Kerr had, indeed, often provided coverage on other wards, took call, and often "helped out." During depositions, Kerr's lawyers showed that Kerr had, in fact, performed ward coverage, even more so than Dr. Riley had in some years. Other doctors also testified under oath that Kerr had done his share of coverage.

Sweet's claim no one spoke up, and no rebellion broke out was a complete lie. A second petition opposing Dr. Kerr's and Dr. Bouvier's proposed layoffs — which requested both layoffs be rescinded — was signed by 16 physicians, including Dr. Sweet herself. The second petition, a "Statement of Concern," was sent to defendant Dr. Colleen Riley and to Steven Thompson, MD, the Chief of Staff of LHH's Medical Service, who forwarded it to Ms. Hirose.

Of the 20 doctors on the regular staff (excluding MD administrators), Kerr had 18 supporters, 16 of whom signed the petition — representing 80% — who were strongly opposed to Kerr's layoff; thus, well over three-quarters of the regular Medical Staff had indeed spoken up, which Sweet had to have known but elided. [Although Bouvier's layoff was rescinded and he went on to become the City's highest-paid employee, Kerr's layoff wasn't rescinded.]

In addition, despite the environment of fear among LHH staff resulting from the culture of intimidation generated by LHH's administration, all six members of the Hospice team risked their careers by signing and submitting a letter of support opposing Kerr's layoff. Along with Rivero, the Hospice's nurse manager, its social worker, and Dr. Monica Banchero-Hasson and Dr. September Williams also risked their careers by publicly testifying against Kerr's layoff at a meeting of a Health Commission subcommittee — LHH's so-called Joint Conference Committee made up of senior hospital administrators and three Health Commissioners.

Dr. Williams — a nationally recognized expert on Ethics, and a member of LHH's Bioethics Committee — stated during the LHH-JCC's March 23, 2010 meeting that she "protests the layoff of Drs. Kerr and Rivero because it will impact the provision of quality care to Laguna Honda's most vulnerable and needy residents, and is against the principles of beneficence." Sweet had to have known of the groundswell of support by those who, in fact, did speak up defending Kerr.

Third, Sweet also misreported the sequence of Kerr's lay off and the timing of filing of his whistleblower complaints. Sweet sloppily reported Kerr had filed a whistleblower [law] suit "the day after his layoff … 'alleging' that his investigation of the drained Patient Gift Fund was the reason he was laid off."

Sweet had to have known Kerr wasn't making a mere "allegation," since many of LHH's physicians knew of the problems with the patient gift fund. The major story that Sweet completely elided from her memoir and which she had to have known of, was that everyone — including doctors on LHH's medical service — knew Kerr was being eliminated in an act of retaliation.

In fact, the timeline shows that Kerr and Rivero submitted their patient gift fund whistleblower complaint to the Ethics Commission at 12:02 p.m. on March 4, 2010, which was promptly faxed to San Francisco's District Attorney. Two hours later, Dr. Riley confirmed during a Medical Staff meeting that the only planned physician cut was a previously announced cut of a half-time position that wasn't Dr. Kerr's position.

But three-and-a-half hours later on the same day, March 4, Kerr's Union (the Union of American Physicians and Dentists) was informed by LHH's H.R. department that Kerr would be receiving a permanent layoff notice. Kerr was orally notified of his layoff on Monday, March 8 and was handed the printed layoff notice that was signed on Friday, March 5. It was ten days later — not one day later under Sweet's misuse of literary license — when Kerr filed a Whistleblower Retaliation Complaint (not a lawsuit) with San Francisco's Ethics Commission. Sweet should also have known that it was fully eight months later, on November 16, 2010, when Kerr filed his wrongful termination lawsuit in Superior Court, not the day after receiving his layoff notice, as she deliberately misreported.

Lightning Strikes Twice

The wrongful termination of Kerr in 2010 follows on the heels of Laguna Honda Hospital's wrongful termination of Dr. John Ulrich, Jr. in 1998. Ulrich — who had also spoken up in 1998 about patient care during a Laguna Honda medical staff meeting and called the health department's decision to cut two medical staff positions "an injustice to patients" — was summarily terminated by Laguna Honda Hospital, just as was Dr. Kerr. Ulrich was forced to sue the City, after the state medical board had cleared him of any medical wrongdoing and found no problems with Ulrich's care of patients.

Ulrich, whose case had advanced to jury trial, won a $4.3 million judgment in federal court in 2004, subsequently reduced to a $1.5 million negotiated settlement. As the Pittsburgh Post-Gazette newspaper reported in its June 24, 2004 issue, a U.S. District Court of Northern California jury concluded that LHH "had violated Ulrich's first amendment rights to free speech, and denied him a fair hearing to clear his name."

Strikingly, the then San Francisco City Attorney spokesperson, Matt Dorsey, claimed in 2004 that Ulrich's dismissal was "not an instance of reprisal." Dorsey went on to claim there was "not a shred of credible evidence to indicate wrongdoing on the part of the City." Dorsey foamed, "We consider this outcome [Ulrich's award] an aberration."

A decade later, Dorsey is still the City Attorney's spokesperson. Given Kerr's settlement, it's clear Dorsey may be unable to distinguish an aberration from a clear pattern.

Given Kerr's precedent-setting settlement award, it's also clear there is a past- and current-practice pattern documenting that LHH's senior management engages in wrongful termination and willful retaliation against employees who exercise their First Amendment rights to free speech.

The pattern isn't limited to just Laguna Honda Hospital; it happens all too frequently in many City departments.

The Costs of 100% Retaliation

The Ethics Commission did nothing to protect Kerr's career after he submitted his patient gift fund whistleblower complaint with Dr. Rivero. Instead, he was told to get a lawyer, and Ethics took two years to complete investigating Kerr's complaint.

"In retrospect, a lawsuit was our only hope, because Ethics hasn't sustained a single whistleblower retaliation claim since it was founded, not one," Kerr laments. "Many studies show that reprisals against whistleblowers are common, with retaliation rates up to 90%. But with San Francisco's Ethics Commission, the retaliation rate is always zero," Kerr says.

Kerr was referring to the fact that in November 2012 the City Attorney's Office reported that between 2007 and 2012, the City settled 103 cases involving prohibited personnel practices for a total of $11 million, including wrongful, retaliatory termination; racial-, age-, and disability-discrimination; sexual harassment; and other prohibited personnel practices.

Despite the City Attorney having concluded that at least 13 wrongful termination settlement cases have cost the City $1.3 million since 2007, San Francisco's Ethics Commission has dismissed every whistleblower retaliation complaint filed at Ethics. Ethics has "dismissed" at least 18 cases alleging prohibited retaliation, for a 100% "clearance" rate, hoping to suggest there is zero retaliation against City employees. Studies show that nationwide, retaliation against whistleblowers is common, with rates up to 90%.

Only in San Francisco would our Ethics Commission dismiss every retaliation complaint received, claiming that zero retaliation ever occurred. Despite Ethics' nonsense that there have been zero retaliation cases, it appears that, in fact, San Francisco may well have a 100% retaliation rate.

Prominent San Francisco open government, public-interest, and accountability advocate James Chaffee — who was an inaugural member of San Francisco's Sunshine Ordinance Task Force serving as its first Vice Chair, and is now affiliated with San Francisco's ad hoc Sunshine Posse — wrote to the Board of Supervisors on March 30, 2013, noting "Dr. Kerr's case has many themes that reverberate throughout City Hall — the influence of private money; the misapplication of purpose of the money; the automatic defense of incompetent administrators; and, most of all, the acceptance of corruption as 'business as usual,' all the way to the top."

Drs. Kerr and Rivero, for their part, hope some public benefit will come from the delayed justice they have endured.

As William Bennett Turner, a faculty member who teaches courses on the First Amendment at U.C. Berkeley noted in his book "Figures of Speech: First Amendment Heroes and Villains" published last year, First Amendment heroes are those who say what they believe, and have the courage to face the consequences.

Villains — such as the defendants in Kerr's lawsuit — are those who want to suppress free speech that they disagree with.

Kerr and Rivero accidentally became First Amendment heroes. We owe them a debt of gratitude for risking their careers exposing fraud and corruption, and for advocating on behalf of LHH's patients, who are often the poorest of the poor.

Kerr's monetary and non-monetary settlement awards don't begin to adequately reimburse him for the damage to his and Rivero's careers. But there's a vast community grateful for his and Rivero's courage to speak out.

Monette-Shaw is an open-government accountability advocate, a patient advocate, and a member of California's First Amendment Coalition. Feedback:

Postscript: The City and LHH's CEO, Mivic Hirose, Still Don't Get It

On March 26, 2013 — at the same hour that the Board of Supervisors voted to approve Kerr's monetary and non-monetary settlement terms — Drs. Kerr and Rivero, and this reporter, instead attended a meeting of the LHH-JCC (Joint Conference Committee), consisting of three Health Commissioners and LHH's senior leadership, which meets every other month.

Following Hirose's customary Executive Administrator's report, the JCC took public comment. Kerr, for his part, testified that bullying and getting rid of whistleblowers is both counter-productive and illegal. As he began to testify that his retaliation settlement agreement requires that LHH's Executive Committee be provided a one-hour training on employee's whistleblowing and First Amendment rights — which training Kerr feels should be expanded to all LHH senior managers — Hirose began to openly smirk, just seconds after I took this photo.

I blurted, quite out of order, "There's nothing funny about this Mivic, why are you smirking?" She quickly wiped the smirk off of her face, glaring at me, obviously not contrite. Hirose clearly doesn't get it, or seem to understand the gravity of the $750,000 settlement plus the City Attorney's hefty legal fees spent defending the pretext that Hirose, Katz, and Riley were was innocent of retaliatory termination. Maybe she thinks money grows on trees in LHH's new orchard.

Next, Dr. Rivero testified on March 26 that a recent Coalition on Compassionate Care award to LHH's Hospice and Palliative Care Service tells a different story than Hirose's and LHH's new press release. Rivero noted that the award honors 25 years of hospice care, which couldn't have happened without Kerr's 21 years as Hospice physician. Rivero testified that it is shameless self-promotion to aggrandize LHH and Anne Hughes, RN, by ignoring the founder of the hospice program, Dr. Kerr.

Later, I testified that the City's and Defendant's defense pretext that Hirose was innocent is over, or Kerr's settlement deal would never have been reached. Hirose has clearly cost taxpayers over $1 million — at minimum — between Kerr's $750,000 settlement and the $350,000 ordered restored to LHH's patient gift fund.

I testified that the Health Commission should recommend that DPH terminate Hirose at once, the sham of her "I'm innocent!" pretext being over.

But there were just more smirks and blank stares all around the table.

As Mr. Chaffee has noted, the acceptance of corruption as "business as usual, all the way to the top," is what runs San Francisco's so-called "City Family." Just ask the current mayor. Or our former mayor, Willie Brown, who both probably view the $11 million in prohibited personnel actions and wrongful termination settlements awarded during their tenures as mayor— and the ensuing damage to the careers of innocent employees — to just be a cost of doing corrupt business-as-usual. Between corrupt friends, perhaps $11 million is considered chump change.

April 2013

The High Cost of City Government

Voracious Management Salaries Rob the City's Lowest-Paid Workers

Even while skyrocketing salaries for upper management in San Francisco City government now costs $1.6 billion, excluding fringe benefits, the City has proposed imposing a "reverse pay equity" (pay cut) for 45 lower-paid job classification codes for new hires, creating a two-tiered salary structure for performing the same work.

Bloated salaries for San Francisco's top City managers contribute significantly to the purported $4.4 billion in so-called unfunded City pension contributions, since City salaries drive pensions paid out.


Warning: Taxpayers who want to know what our local government is up to with our tax dollars, extensive salary data is presented ahead, which clearly shows City Hall's penchant for robbing from the lowest-paid in order to feed the voracious appetite of upper-management salaries. It's a story of robbing form the poorest to feed the already reich."

Inequities in salaries of City employees deserve a close look-see, since nearly one-quarter — 7,327 — of all City employees are half-time or less, employees who averaged just $12,492 in annual base pay in FY 10-11. Fully 32 percent — 11,783 City employees — earned less than $50,000 in base pay in calendar year 2012, averaging just $22,491 in total pay.chart of salaries

Contrast that to the glut of City staff who in calendar year 2012 earned over $100,000 in base pay — 7,864 such employees, or 21.6 percent — who averaged $124,715 in base pay and averaged a staggering $143,131 in total pay. Or contrast it to the 12,309 employees — 33.5% — who earned over $90,000 in total pay in calendar year 2012, averaging $110,473 in regular pay and $129,622 in total pay.

Given the salary inequities between the lowest- and highest-paid City employees, the stench of probable political patronage using taxpayer funds begins to waft through the air.

Chops to the Lowest Paid

The City has proposed trimming 10% from new-hire salaries for payroll and personnel clerks, certified nursing assistants, and hospital eligibility workers, claiming they are overpaid compared to the Bay Area market. The City also proposes a seven-and-a-half percent pay cut for psychiatric technicians, child support officers, legal process clerks, legal secretaries, psychiatric social workers, and museum guards. The City also wants its pharmacists, custodians/porters, medical social workers, various health care workers, employment and training specialists, and diagnostic imaging technicians to take five percent new-hire pay cuts.

At the same time, the City is not proposing pay cuts from the 722 senior managers earning more than $90,000 in base pay in the 0900-series of management job classifications, who averaged $136,242 in base pay.

Between calendar years 2008 and 2012, the City has already eliminated 734 positions across the 45 job classifications the City now proposes to cut salaries of, pocketing $20 million to $30 million in base pay from the lost 734 positions, and probably transferring the duties to higher-paid employees. Should its new pay cut proposal prevail for the 45 job classifications, the City may realize approximately $13.7 million in additional "salary savings" — albeit, spread across several decades — through attrition and replacement with new hires who will be paid at the lower salaries.

At the end of June 2011, the 3,864 employees remaining in these 45 job classifications earned average base-pay salary of just $49,061. Of the 3,864 remaining, fully 18%, nearly one-fifth, worked less than half-time status, averaging salaries of just $12,389. Only 49.5 percent of employees in these job codes worked full-time, at an average salary of $60,913. The City will likely convert many of the new hires in these job classifications to part-time status, and extract pay cuts of up to ten percent from half-time employees who are already averaging just $12,389 in base pay.

This follows on the heels of "de-skilling" of clerical and secretarial employees in the 1440-series, who forfeited 452 positions between calendar years 2008 and 2012, allowing the City to pocket another $13.4 million in salaries. "De-skilling" involves assigning the work of higher job classification clerical employees to lower-paid clerical staff — or alternatively, of handing the work of skilled clerical employees to highly-paid management staff, where the work is performed for much higher pay, if at all.

In FY 2010-11, the City's 1,600 clerical employees in the 1400-series job classification codes averaged just $42,026 in base pay, but the sad fact is that of those 1,600 clerical employees, 21 percent worked less than half-time and averaged just $7,970 in base pay.

Combining the 452 clerical positions eliminated between calendar years 2008 and 2012, and the 734 positions already eliminated from the 45 job classification codes, the City has eliminated at least 1,186 lower-paid and part-time positions, pocketing between $33 million and $50 million, which the City then used to increase the number of, and salaries of, highly-paid managers.

Much of the work formerly performed by clerical workers has been given to far-higher-paid managers, although the City has attempted to hire so-called "as needed" public service aides to fill the gap. Knowledgeable and experienced clerical workers are being replaced by aides.

In the three-year period between FY 08-09 and FY 10-11, the City added 587 part-time public service aides in the 9900-series job classifications to replace the 452 clerical employees eliminated in the 1440-series, bringing the total number of public service aides to 1,309, of whom 1,211, 92.5 percent — work less than half-time (so the City doesn't have to pay them any fringe benefits), and who averaged just $4,590 (yes, less than $5,000 each, on average) during FY 10-11.

The City has also forced many of the higher-skilled secretaries formerly in the 1440-series into the lower-paid 1406 Senior Clerk classification. During the same time period of the public service aide hiring binge, the City added 106 additional 1406 Senior Clerks, who now average just $43,665 in base pay; 12.4 percent of the now 201 Senior Clerks work less than half time, averaging just $10,543 in base pay annually.

Another example, to be clear, of the part-time direction the City is headed in, is that 494, 21.2 %, of 2,330 Muni drivers earned average salaries in FY 10-11 of just $11,030, having worked less than 1,040 hours, which is half-time, or 0.5 FTE ("full-time equivalent") status.

Across all job classification codes in FY 10-11, fully 21.3 percent, 7,327 City employees, were half-time (or less), averaging just $12,492 annually in base pay. They stand in stark contrast to the 7,864, or 21.6 percent, of employees who earned over $100,000 in base pay and averaged $143,131 in total pay.

Excesses for the Highest Paid

After former Supervisor Tom Ammiano first noted in 2003 that City managers earning over $90,000 were a problem, voracious management salaries have climbed steadily upward for over a decade. Indeed, on February 20, Matier and Ross lamented in the San Francisco Chronicle that the days when it was news that a handful of City managers were earning $100,000-plus salaries were long gone — now such highly-compensated employees has somehow become acceptable.

Matier and Ross reported that approximately 572 San Francisco city employees are paid more than Governor Jerry Brown's $173,987. Indeed, San Francisco does have 379 City employees who were paid more in base pay in 2012 than the governor earned; those 379 averaged an astounding $193,415 in base pay each, sucking out a combined $78.6 million in total pay from the City's payroll. They also reported that 195 City employees made more than $200,000, and that one quarter of City employees make more than $100,000 without overtime.

Across the decade since 2003, the City has added another 553 managers in the 0900-series job classification codes, bringing the total to 722 of such managers in 2012. Of the 722 managers, we have 570 in the 0922 to 0943 manager series (up to Manager VII), and another 131 Deputy Directors of Departments and Department Heads (Deputy Directors I through V and Department Heads I through V) in the 0951 to 0965 series, even though the City's core business has not changed sufficiently in the past decade to warrant the hiring of 533 more managers in these job classifications. This single increase costs taxpayers an additional $82.4 million annually, and now costs at least $101.5 million in base salary alone for the 722 incumbent senior managers.

Why does San Francisco need at least 722 senior managers — or more, since there are many other job classification codes that include the word "manager" in their job titles — to run just (approximately) 60 City departments?

Matier and Ross failed to note that in the five years between 2007 and 2012, the City felt the need to add an additional 1,461 employees earning over $150,000 in total pay, at an increased cost of $269.3 million. The City now has 2,777 employees earning over $150,000 annually in total pay, at a combined cost of $496.1 million.

While City Hall turns a blind eye towards the City's $4.4 billion in purported unfunded pension contributions, it is simultaneously turning a blind eye to the ever-escalating unfunded liability of salaries for top City managers who apparently feel an entitlement to excessive salaries. Their top salaries drive top pensions, just as night follows day.

Until taxpayers say enough is enough, expect these City managers to keep earning far more than our State governor, the president of the United States, and private sector CEO's, while the City's lowest-paid workers are robbed of their jobs, or face drastic pay cuts.

Monette-Shaw is an open-government accountability advocate, a patient advocate, and a member of California's First Amendment Coalition. Feedback:

March 2013

Laguna Honda's Continuing Scandals

Laguna Honda HospitalA Sordid Tale of Two Non-Profits

The recent sordid history of two non-profits that purport to serve residents of Laguna Honda Hospital (LHH) appears to have resulted in the dissolution of one of the non-profits, declining contributions to the hospital from the other, and an eight-year low in public contributions to Laguna Honda Hospital's patient gift fund.


"We were so shocked at being driven out of Laguna Honda, right after reporting irregularities with the Patient Gift Fund in 2010, that we figured we had touched on major violations that Laguna Honda and the Department of Public Health were desperate to hide," former Laguna Honda Hospital physicians Dr. Maria Rivero and Dr. Derek Kerr said."

All of this may have been avoidable. But a confluence of factors appears to have contributed to unintended consequences for all three programs. Former City Attorney Louise Renne's unfortunate statements in June 2004 may have set the stage for their downward trajectory.

Renne—who claims that she was responsible for the ground-breaking lawsuit against tobacco companies that provided much of the rebuild funds, when it was former Supervisor Angela Alioto who accomplished that feat—and though she failed to raise a single dime towards new furnishings for the rebuilt hospital, Renne was awarded an engraved plaque in Laguna Honda's new facilities.

Renne appears to be finally throwing in the towel, and is reportedly dissolving her foundation following an apparent investigation by the Registry of Charitable Trusts, a division of California's Attorney General.chart showing donations

RIP Laguna Honda Foundation

In response to a fairly innocuous "show us the money" request placed on January 13 by this Observer columnist for audited financial statements of Ms. Renne's Foundation, Melanie Beene, CEO and President of Community Initiatives—the "fiscal sponsor" handling the books of Renne's non-profit Foundation—responded unexpectedly on January 14, that Renne's foundation is no longer a sponsored project of Community Initiatives.

This loss means Renne can no longer shield her Foundation's revenues and expenses by aggregating them under lump-sum reporting by Community Initiatives to the IRS. She has lost her IRS cover.

Beene also volunteered that, to the best of her knowledge, the Foundation is dissolving.

By mid-week, a source who spoke on condition of anonymity reported that the Attorney General's office—presumably the A.G.'s Registry of Charitable Trusts that oversees operations of non-profits in California had either investigated or audited the Foundation.

The source further reported that Renne's Foundation may have had to return a $50,000 grant to one of its donors, and may have expended the last of the foundation's funds responding to the A.G.'s investigation. The A.G. noted that it is highly improper and very unusual business practice for a foundation that has received independent non-profit, public-benefit corporation status from the IRS—as Renne's Foundation has—to also operate as a so-called "project" of fiscal-sponsor entities such as Community Initiatives.

By January 18, not only had Laguna Honda Hospital removed from its web site its previous philanthropy web page link to the foundation, Attorney General investigators also reported they would neither confirm nor deny any investigation.

"We were so shocked at being driven out of Laguna Honda, right after reporting irregularities with the Patient Gift Fund in 2010, that we figured we had touched on major violations that Laguna Honda and the Department of Public Health were desperate to hide," former Laguna Honda Hospital physicians Dr. Maria Rivero and Dr. Derek Kerr said.

"So we reported our findings about the patient Gift Fund; Volunteers, Inc., and the Laguna Honda Foundation to the Attorney General's Registry of Charitable Trusts, the U.S. Attorney's Tax Division, and the IRS. Had we not been 'laid-off' and harassed, we would have reported solely to the City's Whistleblower Program," the two doctors disclosed. The Attorney General's office apparently followed up on their ethical concerns.

Dissolution the Foundation appears to be delayed fallout from the scandal involving Laguna Honda Hospital's raid of its patient gift fund in order to fund staff amenities, set in motion by previous Executive Administrator, John Kanaley, who died in 2009. The gift fund was eventually restored some $350,000, following a long-delayed audit by the Controller.Laguna Honda entrance

Gift Fund Donations Plummet Again

The "Annual Report of Gifts Received," issued by the Department of Public Health's CFO, shows that in Fiscal Year 2011-2012 ending in June 2012, private giving to Laguna Honda's patient gift fund dropped to just $7,042, excluding a one-time $20,000 donation from Safeway, Inc. for a nutrition project in the hospital.

That $7,042 represents the lowest level of private contributions to the patient gift fund since FY 2006-2007, when donations to the gift fund were 14 times higher, at $97,915. Even going back to FY 2004-2005, the year after the Foundation's formation, donations to the gift fund were ten times higher, at $77,003.

Of interest, donations to the patient gift fund took a drastic "fiscal cliff" fall between Fiscal Years 2006–2007 and 2007–2008, plummeting from $97,915 to just $28,656, the year after Renne installed, former Deputy City Attorney Marc Slavin, as Laguna Honda's Director of Communications in 2007.

Slavin's abrasiveness with members of the public may have contributed to the decline in donations to the patient gift fund.

Volunteers, Inc. Support Dries Up

Since 1957, Laguna Honda's Volunteers, Inc. has financially supported both the patients at Laguna Honda, and its cadre of volunteers. In March 2012, Volunteers, Inc. re-branded itself, changing its name to "Friends of Laguna Honda." It also decamped from Laguna Honda Hospital, and moved its offices from 90 New Montgomery to an address in Mountain View, after its former president Joseph Lehrer stepped down.

As the graph of data from the Health Department shows, donations from Volunteers, Inc. to Laguna Honda and its Volunteer's Department have declined in the past five fiscal years, dropping by half—from $91,292 in FY 2006-2007, to just $46,294 in FY 2011-2012. But the CFO's data only shows part of the story.

Turning to Volunteers, Inc.'s Form 990 tax returns from calendar year 2010 to calendar year 2011, grants awarded by Volunteers, Inc. to Laguna Honda for patient recreation and other services (including bus trips off campus) plunged from $171,261 in 2010 to just $20,018 in 2011 (albeit, the $20,018 grant more than likely came from Safeway, and may have been misreported by DPH's CFO as a donation to the patient gift fund).

The $151,243 outright reduction in Volunteer, Inc.'s grants to Laguna Honda also tells only part of the story. Overall, Volunteers, Inc. reports on its tax returns that it had spent $394,250 on patient amenities, recreation, refreshments, and other "program services" to hospital residents in 2010, but cut that amount to $179,731 in 2011, a net loss of $214,519 in various services to patients.

In 2011, the $179,731 in program services for residents translates to 49.4% of Volunteers, Inc.'s total expenses of $363,932, down from 56.9% spent on program services from its total expense spending in 2009. The remainder in both years was eaten up by fundraising and management-and-general expense categories.

Charity watchdog groups, such as and Charity Navigator, suggest that the standard benchmark for non-profits is to spend at least 70% of their total expenses on "program services" to serve actual beneficiaries. Volunteers, Inc.'s spending of just 49.4% on program services in 2011 fell short.

Although Volunteers, Inc. awarded $14,990 to LHH's Volunteer Services in 2010, its tax return shows that it eliminated any financial support whatsoever to the Volunteer Services Department in 2011, in addition to the $151,243 grant reduction for patient amenities.

Between curtailing support to patients and completely eliminating support to actual volunteers of the hospital, Volunteers, Inc. cut its total spending on program services by $230,000 across a single calendar year. Across the same period, its tax returns show Volunteers, Inc. tripled its spending on public relations, from $11,072 to $33,693.

Who Does PR Slavin Work For?

Renne hand-picked Marc Slavin who had been her public information officer when she was the City Attorney.

Slavin informed this author shortly thereafter that his job was to "stop the negative publicity." He never clarified whether it was to stop negative publicity for Renne's Foundation, or for the Department of Public Health (DPH), which never had a PR officer assigned to LHH for 100+ years until Slavin's arrival.

Between his base salary and fringe benefits, Slavin has cost taxpayers over $950,000 in six short years. His assistant, Linda Acosta, adds another $500,000 in salaries and benefits. Between them, $1.5 million in taxpayer funds may have gone up in P.R. smoke and mirrors.

Slavin, of course, is the P.R. wizard who told the I-Team's investigative reporter Dan Noyes that LHH's "patient gift fund isn't for patients." His propaganda campaign continues.

Magical Commingling of Funds

The unholy commingling of private and public sector funds began when Volunteers, Inc. awarded $375,000 to hire staff for Renne's new Foundation in 2003. This was an expense completely unrelated to the exempt purposes for which the IRS awarded non-profit status to it.

As the Observer has reported in "A Foundation's Dirty Laundry" (Dec '12), the commingling of public and private funds between the City, the Foundation and Volunteers, Inc., has never been audited, adequately or otherwise.

In addition to the $1.5 million in salaries and benefits funded by SF's general fund for Slavin and Acosta to perform liaison work for Renne's Foundation across the past six years, the City has provided free office space in Suite A-150 to house Renne's Foundation, replete with janitorial services supplied by City employee staff, and free utilities.

Shooting Herself in the Foot

Renne published a guest opinion piece in the San Francisco Chronicle ("Laguna Honda needs more than what bonds provide" (6/3/04), claiming that the driving purpose governing formation of her Foundation was to raise private-sector funds for furniture, fixtures, and equipment for the new LHH. But by claiming that "regardless of the [patient] population mix receiving services at Laguna Honda—a policy decision in the hands of the city's director of public health"—her Foundation had been established to meet the immediate needs of residents and other users. And she claimed the new LHH would move LHH "from a traditional medical model to a social residential model of care."

Renne's phrase "regardless of the patient population mix," may have unwittingly sent the message that displacing the frail elderly and disabled that Laguna Honda had traditionally served was OK, and that using the hospital for psychosocial mental health rehabilitation, instead, was acceptable and a decision best left to then-Director of Public Health Katz.

That op-ed may have directly led to a drop in donations to LHH's patient gift fund, and may have effectively killed any chance to attract donors. After all, Renne announced a major shift in the hospital's mission that may have chilled philanthropic donors. Charitable donations to the elderly are one thing; but "psychosocial rehabilitation" has a much smaller universe of donors.

Ms. Renne Fails to Respond

Ms. Renne was offered an opportunity to confirm or deny whether she is, in fact, dissolving her foundation, and if not, what her plans may be, but failed to respond by press time. She appears to have chosen to withhold information again, just as she has from the IRS, the Health Commission, and the charity-donating public, any and all details concerning her foundation's revenue and expenses.

SF's Health Commission still has work to do: it should fully audit the commingling of funds at LHH and unplug its PR division .

The Health Commission has an ethical responsibility to formally notify Renne that the Commission expects any funds and all assets remaining in the foundation upon dissolution be donated only to Volunteers, Inc., or to LHH's patient gift fund, for direct patient benefit.

Renne shouldn't be let off the accountability hook quite so easily.

Monette-Shaw is an open-government accountability advocate, a patient advocate, and a member of California's First Amendment Coalition. Feedback:

February 2013

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Earlier Laguna Honda Articles by Patrick Monette-Shaw