Nonprofit accuses city of Berkeley of 'unethical contracting practices' for new homeless center

Berkeley's new approach to homeless services. Image: City of Berkeley — Berkeley’s new approach to homeless services: the proposed Housing Crisis Resolution Center. Image: City of Berkeley

The city of Berkeley says it will change its commission recommendation process after a community agency brought allegations of serious conflicts of interest during a recent bid for municipal funding.

Building Opportunities for Self-Sufficiency (BOSS) raised these concerns in an April 16 letter to city officials after bidding to run a new one-stop homelessness services center for which the city plans to issue a contract next month.

Read more about homelessness in Berkeley.

BOSS and one other agency, the Berkeley Food and Housing Project (BFHP), put in bids in December to run the new center. Both service organizations are based in Berkeley, and have worked in the city since the early 1970s. BOSS requested $450,145 to run the center, and the BFHP requested $996,899 for the job. The city’s Homelessness Commission and city manager have recommended that the contract go to the BFHP, and council is slated to make its decision next month.

The commission report said only that the BOSS application did “not contain all of the necessary functions” required by the city in its request for proposals.

BOSS challenged the commission recommendation in April, saying two Homeless Commission members affiliated with the BFHP and another group, YEAH, should not have taken part in the discussions. BOSS wrote that their “organizations will gain financial resources as a result of their participation in the funding discussions and eventual funding recommendations” made by the commission and the city.

According to the BOSS letter, commissioners Elisa Della-Piana, who serves on the board of YEAH! — a youth-oriented Berkeley-based community agency — and Marianna Sempari, chaplain for the BFHP, “simply declared conflicts of interest, but participated in the discussion regarding available funding and applications received.” BOSS says the commissioners recused themselves from discussions about their own agencies, but participated in the broader discussion about who should get the money. (Update, May 5: A comment from Della-Piana appears at the bottom of this story.)

BOSS also alleges that both commissioners “continued full-throated discussions” related to case management and transitional housing services tied to the contract for the new center, dubbed the Housing Crisis Resolution Center [HCRC].

According to BOSS, “YEAH … stands to gain as a sub contractor on the HCRC application which was being discussed.”

Donald Frazier, executive director of BOSS, asked in his letter that the city not consider the commission recommendations as part of Berkeley City Council decisions about the center.

Tuesday night, city attorney Zach Cowan addressed the BOSS letter in brief remarks to council during a worksession on community agency funding, and also during the regular council meeting. He told council to disregard the Homeless Commission’s recommendations, given the letter’s “serious allegations,” but said council could consider very similar recommendations from City Manager Christine Daniel.

No information has been provided about the rationale for Daniel’s funding recommendation, according to a report on the topic, except to say it was “contained in the Homeless Commission report.”

Cowan did not address that particular issue, and city spokesman Matthai Chakko declined to address it Thursday, other than to assert that “City staff assessed the proposals independent of the Homeless Commission.”

Frazier said Thursday that it troubled him to see council making financial decisions based on the city manager’s rationale, which seems — at least on paper — to rely on a report that council was directed to ignore. He said BOSS never received any assessment to explain what was lacking in its application, and that there should be more accountability in the budget process.

He said, too, that this is not a case of “sour grapes.”

“As a nonprofit, we submit proposals. We win some and we lose some. This is about clarity, transparency and a fair process,” Frazier said. “And that happens when the city or the government is transparent about its decisions.”

Mayor: “They did have a conflict when they voted”

As a result of the BOSS letter, Cowan told council Tuesday night that the city “found similar problems” on both the Children, Youth, and Recreation Commission, and the Housing Advisory Commission. He directed council to disregard the recommendations of those panels, too.

“BOSS’s letter pointed out some things that we perhaps could have done better in the past and we will do better in the future,” Cowan told council. “All we can say is that we’re willing to make sure this doesn’t happen again.”

Cowan said the city will now provide “very clear written guidance for the first time to the commissions about this issue, and how to avoid these problems in the future, and we will be working on a case by case basis starting at the beginning of the funding process from now on — with each commission where there might be an issue — to figure out how best to deal with it. So there won’t be any surprises and it won’t happen again.”

Cowan never specified the nature of the BOSS allegations in his remarks, referring instead to terms such as “alleged violations,” “similar issues” and “these problems.” He told council: “I’ve already advised you on this matter, and I will not repeat that advice now.” Cowan said Thursday that was in reference to confidential advice he could not share publicly.

But Mayor Tom Bates summed up the situation for the public on Tuesday night: “We ran into some difficulties with the people on the commissions actually having a conflict. It wasn’t apparent at the time, but they did have a conflict when they voted, so we have to” disregard “their recommendations.”

BOSS: “We hope the City views our inquiry as an opportunity to clean up its act”

Wednesday, Frazier sent a follow-up letter to city officials calling the recommendation process “highly flawed.” He asked the city to delay its decision about who will run the new homeless services center until the next fiscal year, and maintain the current year’s funding for providers of existing services.

Alternatively, he wrote, council members who appointed Della-Piana (Jesse Arreguín) and Sempari (Linda Maio) should recuse themselves from the vote about the center operator. And he requested more information from the city about its “method of scoring and ranking proposals for recommendations to the City Council.”

“BOSS believes the issues raised are too egregious to ignore,” wrote Frazier. “Without appropriate corrective action taken by the City, BOSS intends to escalate the issue requesting a thorough investigation of unethical contracting practices within the City of Berkeley. We hope the City views our inquiry as an opportunity to clean up its act so that it is in line with the image of Berkeley that is often celebrated. If we do not align our actions with our beliefs, we have merely instituted a kangaroo court that will undermine the credibility of the open, democratic process.”

Terrie Light, executive director of the Berkeley Food and Housing Project, said she did not receive Frazier’s letters, and said questions would best be answered by city staff. YEAH! could not be reached for comment prior to publication.

Councilwoman Linda Maio said Thursday that the issue of conflicts is bound to arise in Berkeley because many of the people who serve on city commissions and committees also work in related areas in the community. She said the BOSS letter was “a good wake-up call” for commissioners.

“Everybody has to be very careful about the whole conflict issue when voting,” Maio said. “And it does come up as an issue when you’re voting on funds.”

The city has $8.2 million available from different funding sources for community agencies addressing housing, homelessness, poverty and the needs of children and youth. In the homeless services category, 16 community agencies requested just over $4 million as part of a biennial budget process. By the end of June, the city is expected to have allocated nearly $3 million to those agencies for the next two fiscal years.

Tuesday night, council voted to allocate about $59,000 in federal money toward the Housing Crisis Resolution Center, but did not specify its operator. Council is slated to make that decision in June.

Update, May 5: Homeless Commission member Elisa Della-Piana shared the following statement with Berkeleyside after publication of this story. Della-Piana, who serves on the board of YEAH!, also noted that she was speaking only for herself, and not on behalf of the commission or YEAH!

We followed the City’s instructions exactly about how to declare conflicts and handle them on the commission. I believe strongly that everyone in this process — all the agencies and the Commissioners — acted with good intentions. This was a big contract, and only one agency was going to get it; someone was going to be disappointed.

Because it is so important both that the process … appear fair and be fair, I’m glad that the City Council will disregard the Homeless Commission’s recommendations in this instance and take into consideration only the City Manager’s recommendations. I hope the City works out a way to keep the benefit of having local experts on the commissions as it reconsiders its long-standing specific procedures regarding conflicts of interest.

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Nonprofit accuses city of Berkeley of ‘unethical contracting practices’ for new homeless center

Mayor: “They did have a conflict when they voted”

BOSS: “We hope the City views our inquiry as an opportunity to clean up its act”

Emilie Raguso