After Community Complaints of Quan’s Staff’s Mishandling of $4.1 Million Job Funds,State Requires City to Hold New Hearing

Deborah Barnes
Jean Quan
Deanna Santana

By Ken A. Epstein

The state has thrown out the results of a hearing conducted by the City of Oakland on a complaint filed by 16 local nonprofits and community leaders who alleged the Oakland Workforce Investment Board had botched the legally required procedures for a fair and open opportunity for agencies to apply for federal jobs funds.
At stake are as much as $4.1 million in jobs funding, including $1.5 million for youth jobs, depending on how much money Oakland receives in the new federal budget
“The city did not meet the requirements” of legal regulations that require agencies that distribute federal funds to “seek impartial hearing officers” in handling complaints, according to a letter sent to John Bailey, director of the Oakland Workforce Investment Board (WIB) by the state Employment Development Department (EDD).
“The city chose a hearing officer that was directly involved with the issues concerning this complaint,” and therefore a new hearing “should be held before an impartial hearing officer within 30 days of receipt of this letter,” the March 25 letter signed by Jessie Mar, Chief of the EDD’s Compliance Review Office.
Under federal regulations, those who filed the original complaint must be notified 10 days in advance of the time and place of the new hearing.
The complaint had been filed against the Oakland WIB, which is overseen by the City Administrator, and the city hearing had been conducted by Deborah Barnes, who is director of the Compliance and Contracts Division for the City Administrator.
Barnes on March 8 issued a decision denying the complainant’s request to declare the process “a failed procurement” and to conduct a new process “in consultation with relevant federal and state authorities.”
In a response, the City Administrator’s Office said: “We were surprised by the EDD Compliance Review Office’s findings, particularly since the ruling was issued without the benefit of consultation with the city. We look forward to presenting the full facts, which demonstrate that the city took significant steps to be collaborative and transparent with the complainants in order to ensure an impartial hearing.”
The current complaint is the latest in public missteps in the city’s handling of federal jobs funds. It was recently brought to light that the city had to return $600,000 for on-the-job training to the state because the WIB had failed by make use of the money by the deadline, despite frequent warnings.
In addition, the WIB is also under community scrutiny for proposing to distribute youth jobs money to nonprofits, leaving out agencies that serve young people in West Oakland and Latino youth in the Fruitvale District.
The original complaint was filed on Dec. 17 against a Request for Proposals released by the city and the WIB in October, alleging that the process was mismanaged.
Among many issues, the complaint cited failure by the city to follow federal and state guidelines governing bidders’ conferences including the opportunity for questions and answers so that agencies would have “a clear understanding of contract requirements.”
Further, the city’s “i Supplier” on-line question and answer system did not function for several weeks, “resulting in two postponements of the original due date for the RFPs,” the complaint said.
The notice of the RFP postponement was “improperly disseminated to potential bidders,” providing some agencies with notice in advance of others. In addition, the complaint said funding levels in the RFPs “were not the subject of a transparent, public process, nor were they reviewed or authorized by the Oakland WIB prior to their inclusion in the RFPs,” depriving the public body appointed by the mayor of the opportunity to exercise its duty to oversee the process.
The complaint also requested “safeguards be established by the city to prohibit retaliation by any member of city/WIB staff.”
The reasons for making the complaint, according to the signers, were that the city’s mistakes had a “cumulative impact” that denied “the basic principles of fairness and a ‘level playing’ to all potential bidders and significantly contaminate(d) their morale and interest in the process…The possibility of effective collaborations…has been undermined by the chaotic atmosphere surrounding the procurement process.”
The 16 signers of the complaint included Bikes for Life, OCCUR, Pivotal Point Youth Services, Spanish Speaking Citizens’ Foundation, George P. Scotlan Youth and Family Center, Oakland Private Industry Council, Black Elected Officials and Faith Based Leaders of the East Bay, Oakland NAACP and Jumoke Hinton Hodge, the member of the Board of Education who represents West Oakland.
The city’s hearing on the complaint was held on Feb. 14, and Deborah Barnes issued her decision on March 8, giving 10 reasons for rejecting the complaint.
“With the matter of fairness and transparency as well as fair and equitable opportunities for all participating/potential proposers … it is believed that these actions did not rise to the level of material impact justifying the remedies …requested by the claimants,” Barnes wrote in her decision.
The response from City Administrator’s office said: “It is not improper for city staff to act as a hearing officer as long as the person is neither directly affected by nor will implement the final resolution of the complaint, as is the case in this situation,”
“We will ask EDD for a full review of all the facts and an opportunity to submit details demonstrating the steps we took to meet, and exceed, the requirements for an impartial hearing.”
As of press time, the Post had not received a response from the Mayor’s office.