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City advertising under Proposition
Board of Supervisors has expressed concern about two publications, the
SF Independent and SF Examiner, seeking contracts for the city’s two
types of legal advertising. The two publications are owned by the
politically connected Fang family. The supervisors are concerned that
the Independent is violating the conditions of its current contract and
that the publication has excessively raised prices due to a lack of
competition for the lucrative contract.
are also concerned that the Examiner is trying to do an end-run around a
city law that requires the publication to be printed in San Francisco.
city pays for two types of advertising. Type 1 advertising is reserved
for daily publications and Type 2 advertising is for publications
published on non-consecutive days, but a minimum of three times a week.
Ten percent of the contracts are set aside for outreach advertising to
the city’s minority populations.
members of the Board of Supervisors put Proposition K on the November
ballot. It is an ordinance that would open up the bidding process for
the city’s legal advertising notices to additional publications – with
the intention of increasing competition and lowering taxpayer costs.
Independent’s Circulation Woes
problem the supervisors have concerning Type 2 advertising in the
Independent is over the newspaper’s distribution.
newspaper, which currently publishes notices for non-consecutive daily
publications, drastically cut the number of Saturday issues it was
delivering in the city, from about 165,000 to 30,000. As a result, many
of the city’s legal notices published during that time in Saturday
editions were unavailable to large segments of the public.
SF Board of Supervisor’s Finance Committee June 12 meeting, the three
supervisors on the committee, Tom Ammiano, Aaron Peskin, and Chris Daly,
all claimed they had not seen the Saturday edition of the paper for
months. Peskin said the Independent’s circulation claims were “laughable
doesn’t meet the spirit of the contract,” SF Supervisor Jake McGoldrick
said of the Saturday distribution changes.
supervisors were also miffed that no one from the SF Independent was at
the hearing to speak for the publication, causing Ammiano to muse that
they might not have known about the hearing because the notice was
probably posted in a Saturday edition of the newspaper. The hearing was
According to the last Verified Audit Circulation audit, the Independent
published an average of 30,115 copies of the Saturday publication from
July 1, 2000 to June 30, 2001. Of the total distribution, 23,045 copies
were inserted into the Sunday Examiner for distribution.
Independent claims the terms of Prop. J, the law passed in 1994 to
govern the terms for awarding the legal advertising contract, were being
fulfilled because the overall number of newspapers being published
weekly exceeded 50,000. They claim the contract does not call for 50,000
copies of the publications to be published on a particular day, even for
issues of the newspaper that carry the city’s public notices.
Independent publishes 211,000 copies of its Tuesday edition and only 500
copies of its Thursday edition. There are no legal notices in the
April of this year, the Independent resumed publishing Saturday editions
for distribution separate from the Examiner. The publication claims in a
written declaration to the SF Purchaser’s Department that it upped its
circulation to 150,775 on April 13, 2002, of which 143,475copies are
result of the circulation discrepancies and updated audit reports being
available, the Board of Supervisors has requested an independent audit
from City Controller Ed Harrington to verify the Independent’s
distribution numbers. As well, the supervisors only granted the
Independent a six-month contract, on a month-to-month basis, while they
monitor the situation.
of Advertising Increases
Prop. J passed in 1994, the Independent has been the only publication to
win the contract for Type 2 advertising. The Independent was awarded the
contract in 1995 and 1996 despite having higher bids than the SF
Chronicle and Examiner. The Chronicle and the Examiner did not submit
bids after 1996, making the Independent the sole source for the
1991, the Independent bid $2.65 per line to publish legal ads, a price
that increased significantly by 2000, when the publication bid $4.78 per
line. In 2001 and 2002, the price per line bid was reduced to $3.98.
city’s total cost for Type 2 legal advertising climbed from $230,103 in
1994, when the Hearst-Corporation-owned Examiner last had the contract,
to $1.1 million in 1998.
order to help lower the current costs for legal ads, the city’s
purchasing department has been working to lower the cost of legal
advertising by rewriting many of the ads with less text.
According to the California Newspaper Service Bureau, the city paid
$466,446 to the Independent for posting Type 2 legal notices in the
2001-2002 fiscal year. And despite the cost per line remaining the same
for the 2002-2003 fiscal year, the total cost for Type 2 advertising is
expected to drop, to about $400,000.
Examiner Bid Rejected
the Fang family took over the Examiner from the Hearst Corporation in
November 2000, the newspaper attempted to win the advertising contract
for Type 1 legal advertising.
purchaser’s department declared the publication out of compliance with
city law. The Examiner was ruled ineligible because it is not printed in
San Francisco and because it is not in compliance with the city’s
“domestic partners” ordinance.
2, 2001, Bob Haddad, the vice president for circulation at the Examiner,
sent a letter to the purchaser’s department saying: “The San Francisco
Examiner is not printed in the city and county of San Francisco nor does
it have plans to begin such printing in the foreseeable future.” The
letter sent up a red flag at the purchaser’s department.
Assistant Director of Purchasing Michael Ward requested an opinion from
the city attorney’s office to clarify the situation.
Examiner cannot continue to be the official newspaper if it doesn’t
publish in San Francisco. There is no way to get around this, unless the
board (of supervisors) wants to amend the law,” the city attorney’s
Examiner now says it does comply with city requirements because five
percent of the publication, including the TV Examiner, “X Files” and
“Wheels” sections of the newspaper, are printed in the city. As well,
Wayne Wash, advertising projects manager at the Examiner, now says the
Examiner plans to print the entire publication in the city as of Dec.2,
According to McGoldrick, the Examiner’s claim that printing five percent
of the Examiner in the city amounts to compliance with the terms of the
contract is a “cynical ploy.”
Currently, the purchaser’s department has extended the Type 1
advertising contract previously held by the Chronicle, on a
month-to-month basis, even though the newspaper did not bid for the
city’s business this year.
2000, the last year the Hearst-owned Examiner had the contract, the city
was paying $3.46 per line for Type 1 legal advertising. The next year,
the Fang-family-owned Examiner bid $5.75 per line even though
Currently, the city is paying the Chronicle $8.85 per line as the only
qualifying newspaper. The greater price is based on the Chronicle’s
500,000-plus daily circulation versus the Examiner’s 50,000 daily
total city expenditure for the Type 1 advertising contract this year is
estimated to be about $30,000.
Prop. K Would Revise Public Notices Law
Sponsored by McGoldrick, Proposition K was put on the Nov. 5 ballot by
McGoldrick and supervisors Peskin, Ammiano, Daly, and Matt Gonzalez.
According to McGoldrick, the supervisors are re-evaluating the city’s
legal advertising needs and Prop. K is a plan to modify the bidding
process for the city’s legal advertising. “It’s time we put competition
back into our bid process for official advertising,” he said. Prop. K
would retain outreach advertising for specific minority populations and
would change the formula for awarding the contract to eliminate
consideration for women- and minority-owned publications. Instead, Prop.
K would award the contract based on advertising cost, circulation, and
cost of the publication to the public.
current guidelines for awarding the city’s legal advertising contract
are governed by Proposition J, passed by San Francisco voters in 1994.
Many of the city’s public officials were behind the effort, including
Fang-family friend Jack Davis – the political consultant who helped
elect Mayor Frank Jordan and Mayor Willie Brown – who helped run the
campaign for free.
is based on a point system that recognizes minority and women-owned
businesses and rewards publications that are widely distributed for
free, versus those that cost money to purchase.
by a Chinese woman, Florence Fang, the Independent is a free
publication. Fang has her two sons, James and Douglas, and a
daughter-in-law, Angela, helping run the family’s newspapers, which
include a number of publications in San Mateo County. A third son, Ted,
was fired by Fang over a policy disagreement at the Examiner. Another
Fang-family-owned publication, AsianWeek, is an official outreach
publication under Prop. J. AsianWeek gets all public notices deemed
outreach for the Chinese community, a contract worth about $9,000 a
Paul Kozakiewicz is the
publisher of the Richmond Review and Sunset Beacon newspapers, where
this article first appeared.