Orange County’s public health director, Dr. Clayton Chau, faced a rare public grilling session from his bosses this week – with one supervisor raising concerns about a lack of spending transparency and another saying Chau gave contradicting reasons for not seeking competitive bids for a multi-million-dollar contract.
It came on the heels of a Voice of OC article detailing how Chau had recommended a $15 million no-bid contract to a local nonprofit even after its board members rejected it over concerns the group could not properly manage that scale of funds and that its chief executive couldn’t answer basic financial questions.
In justifying the lack of competitive bidding, Chau’s office wrote in August that the Multi-Ethnic Collaborative of Community Agencies (MECCA) was the only who could do the work quickly.
But three months later, after MECCA’s board rejected the funds, Chau’s office switched the proposed contract to a different nonprofit – the much larger charity Orange County United Way – again on a no-bid basis.
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The United Way contract came up for approval at Tuesday’s supervisors meeting as part of a $23 million package of county agreements funded by the U.S. Centers for Disease Control and Prevention to reduce health disparities from COVID-19.
Supervisor Don Wagner said Chau was being inconsistent by claiming for months that MECCA was the only group that could do the work, only to get United Way on board in a matter of days after MECCA backed out.
“The MECCA contract was a sole-source contract. The idea behind sole source is, they’re the only one that can do it, or they’re the only one that can gear up quickly enough and get it done, etcetera, so the law permits us to go with a sole source,” Wagner said.
The sudden shift, Wagner said, goes against the original justification.
“MECCA pulls out, and immediately we’re able to go with United Way. And the ability to shift 180 degrees so dramatically, sort of undercuts the idea of the sole source in the first place,” he added, calling it an “inconsistency.”
Chau responded that there’s no contradiction.
“There’s no inconsistency, supervisor,” he said. “In planning for sole sourcing, we have to ask ourselves – the agency in Orange County – who’s able to do this work, and that’s how we picked them.”
“After MECCA pulled out, United Way worked hard over the weekend and accepted the contract the county previously proposed with MECCA “without changes at all,” Chau added.
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The pandemic has laid bare the health disparities facing underserved communities, with Latino communities in particular facing disproportionately high COVID-19 caseloads and deaths among county residents. Latinos also face a stark vaccination gap.
Community outreach groups like Latino Health Access and the Coalition of Orange County Community Health Centers have been critical in getting testing, education and isolation resources to residents throughout the hard hit communities of Orange County.
But the funding for such work often falls short of the need.
To help address that gap, county health officials got a $23 million grant from the CDC – which the county calls the Equity in OC program – to reduce health disparities among Asian-Pacific Islanders, Blacks, Latinos, people with disabilities, LGBTQ people and seniors.
The largest portion of that grant is the $15 million contract to United Way, the vast majority of which would be distributed to other, yet-to-be named organizations in an effort to close various health gaps throughout OC.
At Tuesday’s meeting, Supervisor Katrina Foley also raised concerns with Chau, saying there’s no budget breakdown for the $600,000 Chau wanted supervisors to award the nonprofit group Advance OC to expand its health equity map as part of the CDC-funded contracts.
“I asked for a budget. And I’ve asked for it over several weeks, from both management, from you [Dr. Chau], from [Advance OC]. And no-one could give us a budget,” Foley said, adding that she’s been wanting to know “what they’re going to pay for.”
Advance OC’s map details a wide range of health disparities between OC communities, like rates of obesity, diabetes, asthma and heart disease.
Foley said Chau has been unable to explain what Advance OC will do with the additional $600,000.
“There’s not anything that really tells us, how many people are they hiring? What is the cost of those individuals? What are the services that relate to those costs? We don’t have any itemized budget, for $600,000,” she said. “How did you [arrive] at $600,000? And they said that they would prepare something after the contract was approved.”
“Well, that doesn’t answer my question because they had to come up with $600,000 somewhere. There has to be some basis to support and justify paying $600,000.”
Chau didn’t respond to those questions from Foley.
But Advance OC’s leader says the nonprofit did in fact provide the spending plans Foley asked for.
“[Advance OC] DID provide a budget to Supervisor Foley’s office,” wrote the nonprofit’s board chair, Katie Kalvoda, in a text message to Voice of OC Thursday.
Kalvoda declined to provide Voice of OC with copies of those documents, which she said were provided to Foley’s chief of staff.
Foley said Thursday morning she wasn’t aware of any such budget documents.
After looking into it further, she said it turns out Advance OC emailed a budget plan to her chief of staff late the night before Tuesday’s meeting – after Foley had been asking for that level of detail for weeks.
“I had been asking for a breakdown since the beginning – since I first continued this item,” Foley said in an interview Thursday, referring to late September when she first delayed the contract approvals.
“I never saw it until [Voice of OC] brought it to my attention today,” she added.
“We’ve been a little focused on some redistricting issues over the last 48 hours. And why, when I requested this from others – county staff – how come they don’t have a copy of it?” Foley said.
“You can’t send something to us at 9 o’clock at night the night before the meeting, and not tell us about it,” she said, adding that she was getting “hundreds of emails” in the couple of days before the meeting.
“If you want us to see something for the meeting, you’ve got to tell us.”
Foley provided a copy of the email from Kalvoda with the budget info, which is dated 8:36 p.m. Monday night.
Foley said she had asked for that info again more than a week beforehand when she met with Kalvoda.
Asked if the late Monday email was the only communication of the budget plans to Foley, Kalvoda said: “She only asked that we send it to her prior to the meeting. And we did as she asked.”
“We only found out about our item being on the agenda late afternoon same day,” Kalvoda said, adding that Foley “only asked us for it one time” and that it wasn’t months ago.
Foley said she that prior to meeting with Kalvoda, she had asked for that budget info from county staff, who have not provided any.
“The whole reason I continued the item in the first place [in September] was to find out what the money was going to be spent on and how the amounts for each contract or justified.”
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Tuesday’s public conversation got heated — with an accusation of racism — after Foley alleged Chau was wrong in saying OC is the first county to publish an interactive health equity map for the public to use.
“We’re not the first county,” Foley told Chau.
“Yes we are, ma’am,” Chau responded.
“We aren’t,” Foley replied. “In America, we’re not the first.”
Supervisors’ Chairman Andrew Do interjected.
“‘In America’? Really?” Do said.
Foley responded, “Well he said we’re the first county. And that’s not true. Because I learned about health equity maps before I even got here.”
“You of all people, who are so quick to jump on the racist card, and you’re trying to say that to – ‘in America’?” Do shot back.
“What are you talking about?” Foley responded. “He said county, and I’m talking about counties in America. I have no idea what race has to do with it.”
Chau then clarified that he meant OC is the first county in the state to publish such a map, and Do dropped the issue.
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Foley also wondered how Chau could justify a no-bid, $200,000 contract to a marketing firm in Berkeley by saying they’re the only ones who can do the work, when there’s many marketing firms locally in Orange County.
She noted Chau’s billion-dollar Health Care Agency does not have an in-house marketing person on staff, and asked if the marketing firm could instead be redirected to hiring a staffer.
Chau responded that the Berkeley-based marketers are experts, and that he doesn’t currently have staff for marketing.
But, Chau said he could hire a staffer in two years if the CDC grant program is extended beyond that point.
Ultimately, supervisors voted unanimously to approve the contracts, with Foley unsuccessfully trying to have separate votes on the contracts she had concerns about.
This article has been updated to include comments from Kalvoda and Foley about the budget documents.
Nick Gerda covers county government for Voice of OC. You can contact him at ngerda@voiceofoc.org.