SPUR VOTER GUIDE
JUNE 2008

State Measure	Name	SPUR Position
PROP. 98	Eminent Domain and Rent Control	No
PROP. 99	Eminent Domain Restriction	No
City Measure	Name	SPUR Position
PROP. A	School Restriction Parcel Tax	Yes
PROP. B	Retiree Health Care Reform	Yes
PROP. C	Moral Turpitude	Yes
PROP. D	Diversity on City Commissions	No
PROP. E	SFPUC Commissioner Appointments	No
PROP. F	Affordable Housing in Bayview Hunters Point	No
PROP. G	Bayview Hunters Point Development Plan	Yes
PROP. H	Campaign Contribution Limits	No

Released
May. 1, 2008
Contact
Egon Terplan, Economic Development and Governance Policy Director
415-781-8726 x131, eterplan@spur.org

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Proposition 98
“California's Property Owners and Farmland Protection Act”
EMINENT DOMAIN AND RENT CONTROL

Constitutional Amendment

Proposition 98 makes a number of changes to the California Constitution affecting both eminent domain and the overall regulation of land, property, public safety and the environment. It also specifically abolishes rent control in California.

What it does

Proposition 98 would amend the California Constitution to add, “Private property may not be taken or damaged for private use.” This means that private property (including commercial and residential property) could be “taken” by eminent domain only for public uses, including freeway construction, parks or schools. For example, government could not use eminent domain to transfer land to nonprofit organizations to build affordable housing or to private owners for economic development projects such as a new retail center or a technology or industrial park. Needless to say, there would be no redevelopment involving uses of eminent domain. The only mechanism under which government could transfer land to a private user would be if the property owners willingly sold their home or business to the government.

Prop. 98 also makes other changes that limit the ability of government to regulate land and property for environmental or equity goals, or to protect public safety.

1. Prevents regulations that transfer economic benefit to a private person

Prop. 98 would prohibit regulations affecting the ownership, occupancy or use of real property if the regulations are enacted “in order to transfer an economic benefit to one or more private persons at the expense of the property owner.” This broad prohibition could affect many regulations since regulation, by its nature, usually provides an economic benefit to some private person at the expense of another. In particular, this clause suggests that Prop. 98 might be interpreted to restrict many environmental and land use regulations because they can be construed to transfer economic benefit. For example, this could restrict a local community from passing zoning regulations to restrict adult businesses as nearby homeowners could receive an economic benefit through increased property values.

2. Invalidates rent control and other affordable housing and tenant protections

Under Prop. 98, the government would not be allowed to enact or enforce local rent control laws. While the initiative does retain rent control for current tenants, once they move no control is permitted for them at a new residence, and no further control may be enforced on the dwelling the tenant has vacated. Affordable housing is similarly affected. Resale restrictions on affordable housing would be invalidated. Inclusionary zoning could be deemed illegal.

Prop. 98 would greatly affect the very poor, the elderly and those who qualify for rental assistance. Under current law, if without cause a landlord terminates a Section 8 contract for a rent subsidy, he or she may charge the tenant only the contract rate on the unit – the combination of the amount the tenant was paying directly and the additional amount provided by the local housing authority. Under Proposition 98, the landlord could charge any amount after the contract is terminated, thus making it very difficult for the tenant to pay the rent while finding new housing. Prop. 98 also would invalidate state Ellis Act limitations on the amount a landlord could charge seniors and disabled people in the last year of their residency prior to an eviction that would make way for new development.

Laws governing the return of rental deposits most likely would be invalidated, as would protections regarding terminations of tenancy, and required tenant notice periods, such as the 30-day requirement prior to a rent increase or any other change in the leasing agreement, the requirement for 30 or 60 days’ notice to vacate, the 90-day notice to terminate a Section 8 contract requirement and many others. With all of these statutes invalidated, notice periods and other protections would be subject only to individual agreements between landlords and tenants.

3. Prevents eminent domain for public uses that are similar to the prior private use

Prop. 98 would restrict the government from using eminent domain in situations where the new use — even if it were a public use — would be similar to the prior use. For example, open space that is used for private recreation such as hiking, fishing or horseback riding could not be taken for habitat preservation, conversion into a public park or for any other recreation facilities. This part of the initiative also could affect large water projects, as government agencies could not use eminent domain to obtain water rights and then use those water rights for larger public water projects. For example, any of the properties that make up Point Reyes National Seashore were purchased using the power of eminent domain, but under Prop. 98, this national park would not have been possible unless every landowner had been willing to sell. This provision would restrict the use of eminent domain in open space protection, habitat preservation and historic preservation.

4. Changes the compensation for public works projects

In cases in which the government could still use eminent domain for qualified public works projects, Prop. 98 would change the definition of “just compensation” to allow a property owner to sue if he or she did not consider the amount of compensation to be “just.” The government would have to pay both sides’ attorney fees if a jury awarded the property owner a higher value for the property, even if the difference was minimal.

5. May have broad impact on other environmental and land use regulations

The extent to which some provisions in the measure would be implemented is unclear. For example, some environmental and land use regulations could be restricted or outlawed by Prop. 98:

• Regulation of greenhouse gas emissions to limit global climate change
• Regulations that protect costal areas, wetlands, forestland, farmland, ranchland, and cultural and historic sites
• Restrictions on timber harvesting, water use, pollution and mining
• Regulations to preserve rural character and planning moratoria
• Ordinary planning and zoning regulations, such as restrictions on the development of polluting industry, adult businesses and big-box stores
• “Smart growth” regulations designed to promote compact, walkable and transit-oriented communities that combine residential and commercial land use
• Affordable housing requirements, other tenant protection laws, condominium conversion ordinances and Ellis Act safeguards.

6. Provides stronger legal recourses for property owners

If a public agency takes property under false pretenses or abandons its plans, the property must be offered for sale to the original owner at the original price, adjusted by the fair market value of any changes to the property. The property tax would be assessed at the value of the property when it was originally condemned. If farmers or business owners were evicted by eminent domain, they would be entitled to compensation for temporary business losses, relocation expenses, business re-establishment costs and other expenses. Why it is on the ballot

Prop. 98 is a follow-up to the 2006 measure Prop. 90, which narrowly failed at the ballot. Prop. 90 was a California measure that was similar to many proposed in other states, all of which used the Supreme Court’s Kelo v. City of New London decision (which upheld the right to use eminent domain to take a home and transfer it to a private user) as an excuse to assail broad government regulatory authority.

Prop. 98 is co-sponsored by the Howard Jarvis Taxpayers Association, California Farm Bureau Federation and the California Alliance to Protect Private Property Rights. More than 85 percent of funding to qualify Prop. 98 comes from owners of mobile homes and apartments, and associations that represent them.

These are different organizations than the chief proponents of Prop. 90, but they share a common perspective that courts have not been good at reviewing the administrative actions of government that have a serious damaging impact on the value of private property.


Proposition 98 would severely limit the government's ability to impose specific fees and restrictions on private development. According to the San Francisco City Attorney's office, tens of millions of dollars in local development fees might be rendered illegal. This chart shows some of the fees that might be eliminated if Prop. 98 passes.

Pros

Arguments in favor of this measure:

• By eliminating rent control, this measure could, over time, result in a more reasonable market rate rent, which potentially could benefit future tenants. Some argue that rent control is an unfair taking of the full market value of real estate by suppressing the price of units with long-term tenants. Prop. 98 would end rent control for future tenants without harming existing tenants.
• Proposition 98 would allow a judge to issue an injunction to stop a regulation. This means that monetary damages against regulators are not the only possible response to overreaching laws, but rather it gives the courts better discretion to stop such regulations.

Cons

Arguments against this measure:

• Prop. 98 goes beyond 2006’s Proposition 90 by preventing government actions “taken to protect health and safety.” Land use regulations that restrict building in unsafe or flood prone areas might be illegal under Prop. 98. This is not only unwise, but also unfair to future property owners.
• It would eliminate a long list of tools that communities have to plan for their future, including laws and actions related to land use, the environment, tenants, housing, and public works. In many cases, Prop. 98 not only could prevent governments from passing new laws, but also from enforcing existing laws. For example, Prop. 98 would prevent environmental protection such as habitat preservation. It might eliminate inclusionary housing laws and other affordable housing regulations that require a certain number of units in developments to be priced below the market rate.
• Prop. 98 eliminates rent control and many other tenant protection laws. If the proponents of Prop. 98 are concerned about rent control, they should run a campaign focused on the issue of rent control rather than mixing rent control with unrelated subjects.
• Prop. 98 includes a specific prohibition that would prevent the use of eminent domain for public water projects. This is because the measure includes a prohibition on the “transfer of ownership … to a public agency for the consumption of natural resources.”
• Prop. 98 would make public works projects much more difficult and expensive, as property owners would tie up eminent domain projects in new litigation over the value of “just compensation,” and would force the government to pay all attorney fees if the courts determine that the government should have paid even $1 more for the property than the owners were offered. For example, the measure could also jeopardize the San Francisco Public Utilities Commission’s seismic upgrade of the Hetch Hetchy water system.
• Prop. 98 would result in thousands of new lawsuits to block new homes and businesses, harming our ability to grow our economy and house our workforce.

SPUR’s analysis

Every day, governments make decisions that benefit one interest at the expense of another. Ideally, these decisions are made for the greater public good. But they may involve the transfer of value and sometimes ownership from one property owner to another private person. This process is part of the tradeoffs between various interests in society. This is what planning and government is for.

Prop. 98, however, is a complex and far-reaching measure that would wreak considerable harm on our system of self-government. It outlaws many of the core planning, environmental, public works and housing tools that our communities rely on in order to benefit certain property owners. If passed, it would also launch a slew of expensive and protracted legal battles.

Ultimately, as public policy, Prop. 98 has no redeeming qualities. SPUR has a longstanding belief in the appropriate use of government regulation to protect health and safety, to strengthen environmental protections, and to provide for the creation of affordable housing. Prop. 98 reverses each of those. SPUR recommends a “No” vote on Prop. 98.

Some background on regulatory takings There has been a long battle in U.S. courts and before local governments about the amount of compensation required to property owners when government rules or actions “take” economic value away from property owners. While a “takings” clause was included in the Bill of Rights to ensure that governments would not take over or destroy people’s property without paying them (as had happened under the British), recent debates have focused more on “regulatory takings,” which result from government policies or decisions that affect property values, such as planning and zoning. These actions may change the potential use to which property may be put, and thus change the value of land. While the courts typically have given governments fairly wide latitude for planning and zoning, there has been a growing “property rights” movement that views government planning decisions with mistrust and asserts that property owners should have mostly unrestricted rights to develop their property as they see fit. This movement has seized upon examples of perceived abuses of governmental power to make its case that regulatory takings are bad for property owners. Propositions 98 and 99 both owe their origins to the narrow failure of Proposition 90 in November 2006. That measure lost by just 400,000 votes statewide, 52.5 percent to 47.5 percent. Opponents spent nearly $12 million defeating the measure, while the proponents spent little on the campaign once Prop. 90 qualified for the ballot. Prop. 90 was one of many similar ballot measures around the country — evidence of the national strength of the property rights movement. Why Props. 98 and 99 are on the ballot After Prop. 90 failed at the ballot in November 2006, its proponents returned in May 2007 with what is now Prop. 98. Throughout the summer, they gathered signatures to qualify the measure. The proponents of Prop. 98 are the Howard Jarvis Taxpayers Association (most well known for sponsoring Proposition 13), the California Farm Bureau and California Alliance to Protect Private Property Rights. In an attempt to prevent another expensive and divisive ballot box battle, the League of California Cities, the California League of Conservation Voters, the California Redevelopment Association and others tried to forge a compromise with the Howard Jarvis Taxpayers’ Association. The compromise sought to respond to the concerns about the taking of private property for private uses in redevelopment, but it did not make any attempt to restrict regulatory takings. They crafted a measure, Assembly Constitutional Amendment 8, sponsored by Democratic Assemblyman Hector De La Torre. Partisan politics prevented that measure from moving through the State Legislature. As a result of the failure of ACA 8, the League of Cities, the California League of Conservation Voters and the California Redevelopment Association gathered signatures for an initiative measure — what now is Prop. 99 — to appear on the same ballot as the Jarvis measure, dealing narrowly with restricting the taking of private property through eminent domain for private uses. Prop. 99 contains a poison pill that would invalidate the entire Jarvis initiative if voters approve both measures and Prop. 99 receives more votes. It is the intention of the proponents of Prop. 99 to remove the battles over eminent domain and regulatory takings from the political landscape by narrowly responding to the most potent scare tactics of the other side. It appears to be the intention of the proponents of Prop. 98 to use the issue of eminent domain as an attempt to go after broader regulations such as rent control, as well as land use and environmental regulations.

Proposition 99
“Homeowner Protection Act”

EMINENT DOMAIN RESTRICTION

Constitutional Amendment

Proposition 99 would prevent the state from using eminent domain to take a home and transfer it to a private use.

What it does

Proposition 99 would eliminate the use of eminent domain by state and local governments for the acquisition of an “owner-occupied residence” for the purpose of conveying it to another private user such as a business. An “owner-occupied residence” includes single-family homes, whether attached or detached, as well as condos. Eminent domain thus could be used only to acquire homes for broadly defined public uses, such as highways, schools, flood protection or roads.

This measure is intended to eliminate in as narrow a manner as possible the concerns about abuses of eminent domain, thereby removing the easiest argument of the property rights movement.

Prop. 99 could possibly restrict other uses of eminent domain — a governmental power generally defined as the right to force private owners to sell their property if the property will be used in a way that benefits the public at large, as long as the owners are justly compensated – if the ultimate beneficiary would be a private party. One example of this private-party benefit could be if the government built a road to a new private development, and had to use eminent domain to acquire private property to build the road.

Prop. 99 would not restrict the ability of government to use eminent domain to acquire private property for a public use such as a library or a school. It also would not prevent the state from using eminent domain for the purpose of protecting public health and safety, preventing repeated criminal activity, responding to an emergency or remedying environmental contamination.

Pros

Arguments in favor of the measure:

• Proposition 99 is needed to address the political concerns about eminent domain, and does so without the highly damaging impacts of Proposition 98. It is an attempt to prevent future measures that severely hamper government regulation of private property, and will remove from the state’s political agenda the use of eminent-domain reform as a shield for radical property-rights measures.
• The changes mandated by Proposition 99 will not significantly hinder redevelopment in California cities because residential property is almost never the subject of eminent domain for economic-development purposes.
• Prop. 99 is a careful and narrow restriction of the use of eminent domain. It focuses only on homes taken and transferred to private uses, and allows for appropriate exemptions to protect public health and safety, and for other legitimate purposes. These exemptions do not exist in Prop. 98.

Cons

Arguments against the measure:

• Prop. 99 has the potential to limit smart growth development. In particular, it would make it more difficult to develop transit villages or to restructure single-use subdivisions into mixed-use communities. This is because of a clause that restricts the private benefit of the eminent domain action as being “incidental to or necessary for” the eminent domain. This clause would prevent eminent domain to take a home that results in new buildings with private beneficiaries. While a privately owned coffee shop in a train station might be deemed “incidental” and thus allowed, dozens of condos or offices above a train station or in neighboring buildings might not.
• Prop. 99 could dampen the ability to finance new public transit by making it more difficult to create transit villages near stations. One of the best sources of funding for transit all over the world is the recapture of value from redevelopment around new stations. If Prop. 99 passes, that ability to recapture value will be greatly diminished.
• Prop. 99 would make it more difficult to rebuild or redevelop existing single-use subdivisions throughout the state. If the use of eminent domain were required to connect dead-end streets to the surrounding street pattern or to convert a part of the subdivision into a “main street,” that conversion might become impossible under Prop. 99.
• There is, to our knowledge, no pattern of abuse of eminent domain in California. Prop. 99 solves a problem that does not exist. Most of the examples of abuse of eminent domain took place many years ago and restrictions now apply that regulate how eminent domain is used.
• Proposition 99 represents a misuse of the ballot initiative process. It was placed on the ballot as part of a political strategy that is less concerned about the merits of the measure and more interested in defeating Prop. 98. Rather than support 99, opponents of restricting eminent domain should simply oppose the passage of 98.

SPUR’s analysis

Prop. 99 is essentially a political calculus to help defeat Prop. 98 and remove from the state’s political debate the “eminent domain reform” shield used by the property rights movement. The backers of Prop. 99 argue that Prop. 98 is too dangerous and its proponents too well funded to defeat it with rational arguments alone. Instead, they introduced Prop. 99 in a political move to trump Prop. 98 by seeking to bring more votes to Prop. 99, because it appeals to a broader constituency. SPUR understands the political calculation. We also understand the political furor created by property rights advocates who cynically use public concern over eminent domain to pursue their radical anti-regulation agenda.

We depart from the proponents of Proposition 99 in three areas because of a disagreement about the function and need for Prop. 99, as well as our evaluation of its potential negative ramifications, should it pass. First, abuse of eminent domain has been an extreme rarity in California over the past 25 years. Public opinion has enforced considerable care in the use of this controversial tool. Therefore, SPUR is not convinced that either Props. 98 or 99 address a real public policy issue in their changes to eminent domain. Further, even if Prop. 99 were to pass, and even if it were to garner more votes than Prop. 98, this would not spell an end to the property-rights movement’s abuse of the state ballot. It instead merely would validate that movement’s premise that there is a need for eminent-domain reform in the first place (which we do not believe there is).

Second, we have concerns about the misuse of the initiative process to try to trump another measure, as opposed to simply trying to defeat Prop. 98 on its merits. The far-reaching and possibly unforeseen consequences of this kind of measure will be locked into place unless voters themselves reform the measure.

Third, we feel the need to defend the proper use of eminent domain in a wide variety of situations — including taking homes and transferring ownership to a broadly defined private user. We have serious concerns about reducing the discretion of local cities to carry out appropriate development and redevelopment activities. Over the next few decades, many smart-growth projects could be prevented as a result of Prop. 99, such as the building of transit-oriented development to support high-speed rail and the retooling of our auto-oriented, single-use subdivisions. We all are aware of the historic abuses of eminent domain during the 1950s, 60s and 70s. But the fight against urban renewal was decisively won 30 years ago. Most cities already have restricted eminent domain to prevent such continued abuses. The problem with Prop, 99 is that it broadly eliminates one of the few tools we will have in the 21st century to rebuild our failing suburbs and to retrofit our state’s settlement patterns around transit nodes. SPUR recommends a “No” vote on Prop. 99.

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Proposition A
"San Francisco Quality Teacher and Education Act of 2008"
SCHOOL DISTRICT PARCEL TAX

Parcel Tax

Imposes a $198 per year tax on every parcel of property in San Francisco, primarily to pay for increases to teacher salaries and to provide retention bonuses

What it does

Proposition A is a parcel tax of $198 per year on every parcel of property in San Francisco to support the San Francisco Unified School District. The proceeds would be targeted to improve the quality of teaching in the district, primarily through increases in teacher pay.

The tax would apply both to residential and commercial parcels. A “parcel” of taxable real property is any unit of property in the City and County of San Francisco that receives a separate bill for property taxes from the Tax Collector’s Office. This includes condos, but not tenancies-in-common. In some cases, larger downtown buildings are on multiple parcels and would have to pay the parcel tax for each parcel that receives a property-tax bill. Owners of multifamily properties will pay the tax, but there is no pass-through allowed to renters. Senior citizens are eligible for an exemption from the tax. Under the California Constitution, school districts can levy special taxes if approved by two-thirds of the voters who are registered within that district.

If approved, the tax would be levied beginning July 1, 2008, would last for 20 years and would bring in about $28 million a year, with annual adjustments for inflation. The estimated amount that would be raised under this proposition is about 4 percent to 5 percent of the General Fund of the SFUSD.

Proceeds of the tax could be used to:

• Raise the salaries of teachers and provide retention bonuses so that the SFUSD can compete with other districts for qualified teachers
• Reward teachers working in schools with high teacher turnover and in hard-to-fill subject areas
• Provide additional training to staff, including teachers and paraprofessionals in the Child Development Program and schools from kindergarten through high school
• Provide more competitive compensation and/or benefits to other school personnel
• Develop a Master Teacher program and provide incentives for exceptional teachers to stay in the classroom
• Expand and improve the Peer Assistance and Review program, which provides coaching for new or struggling teachers
• Support best practices at schools through recognition and resources
• Improve academic innovation, technology and support resources
• Allocate a portion of funds, initially $1 million, to public charter schools
• Create an oversight group to make sure that funds are only spent in the manner approved by the voters

Beyond the language written into the ballot measure, the specifics of how money gathered by Proposition A could be used are spelled out in a memorandum of understanding with the teachers’ union. Based on the MOU, the monies from the tax would be allocated as follows:

• 70 percent to teacher salary compensation and professional development
• 30 percent for technology, innovation and equity

If this measure passes, the basic beginning teacher’s salary will be $50,000, an increase from the current $45,000. The maximum teacher salary will become $82,000.

In addition to raising basic teacher salaries, this measure also has the goal of providing a new methodology for “differentiated compensation”. This change would allow the school district to begin to paying teachers different salaries based on the schools they teach at as well as other criteria. This is a major change from the current pay that is based almost entirely on seniority.

The following are some of the examples of differentiated compensation in Prop. A:

• Teachers who teach in less popular or difficult schools would be eligible for incentive pay. This is meant to prevent all the best teachers from choosing to teach at the best-performing schools (which are sometimes the easiest to teach at).
• There would be incentives for teachers of subjects such as science and mathematics, where qualified teachers are hard to find.
• Incentives will be offered to newer teachers to remain in the district. After four years of teaching in the district, teachers would receive a one-time bonus of $2,500. After eight years in the district, they would receive a one-time bonus of $3,000.
• The measure would create a Master Teacher program, in which teaching loads would be reduced by 20 percent so that teachers could spend that time coaching newer teachers. For elementary-school teachers, that would mean one day a week, and for teachers in secondary schools, one less class.
• The current teacher assistance system, called Peer Assistance and Review (PAR), would be modified to ensure higher teacher performance. This program provides additional support and guidance for struggling teachers. The way it is today, struggling teachers can graduate from the program performing only at a basic teaching level. Prop. A would both increase the number of teachers in the program as well as raise the graduation standard to require that teachers graduate at least at a proficient level. Teachers would also not be allowed to re-enter the PAR program. This would give greater impetus to be able to fire an underperforming teacher who is not able to teach at a proficient level.

Entire schools could receive special funds under this measure. Underperforming schools that show the greatest improvement could receive block grants of $30,000.

One million dollars of the total funds would go to public charter schools. There are 10 charter schools in the city today. A Memorandum of Agreement would be created with the district to distribute these funds.

Compliance with the terms of this measure would be provided by an independent oversight committee appointed by the Board of Education, annual reporting to ensure that all funds from the measure are maintained in a special account and used only for the purposes stated in the measure, and annual reports from the district’s chief financial officer to the Board of Education on the amount of the tax collected and the status of projects or programs funded with those tax monies.

Why it is on the ballot

A parcel tax requires a vote of the people, with a two-thirds majority required for passage. Since the passage of Proposition 13 in 1978, local property-tax funds for schools largely have disappeared in California, and the greatest part of school funds comes from the state. The state does not provide adequate resources for education, and the level of funding is very uncertain from one year to the next. This measure is intended to create a local and predictable funding base to supplement state funding.

Parcel taxes are a common way to raise local money in jurisdictions throughout the Bay Area. For example, Oakland, Albany and Kentfield all have school parcel taxes, and other communities such as Berkeley have a parcel tax for libraries. This is the first parcel tax of any kind in San Francisco.

This proposition is part of an overall strategy to provide more local funding for the schools. To date, voters have passed two bond measures — one in November 2003 and another in November 2006 — to provide funds for modernization and compliance with the Americans with Disabilities Act in school buildings. Another bond measure for capital needs is planned for the future. Proposition H, the Public Education Enrichment Fund, which passed in March of 2004, provides money from the city’s General Fund to support arts, music, sports and libraries in the SFUSD.


Proposition A would institute a $198 tax on every parcel of property in San Francisco. Proceeds will primarily go toward raising salaries for public school teachers. This chart shows that the parcel tax would increase the starting and maximum attainable salaries for teachers by approximately three to four thousand dollars.

Pros

Arguments in favor of the measure:

• Prop. A begins to address the growing problem of teachers leaving San Francisco for other districts for higher salaries. By increasing starting teacher salaries as well as providing bonuses for those who stay beyond a particular point, this parcel tax will help attract and retain teachers.
• In addition to augmenting salaries, funds from the parcel tax would bring the district money specifically to support teacher quality. It is widely understood that the single most important factor in assuring acceptable student achievement is teacher quality.
• Prop. A represents a major civil service reform because it creates incentive pay system for teachers who choose to work in underperforming schools. It also provides a higher standard of teaching required of struggling teachers who are recommended for additional support through a peer assistance program.
• The funding for this parcel tax would go directly to the district without the need to pay interest or other charges associated with bond measures. That means that all of the proceeds will be used by the SFUSD.
• The district has done a good job in recent years of overseeing funds. For example, the Citizen Oversight Committee for November 2006’s Proposition A, a bond measure, meets monthly, although it is required to meet only twice a year.

Cons

Arguments against the measure:

• This tax is inequitable because it is a flat rate, which applies without variation to every real estate parcel, large or small, commercial or residential.
• The tax is being levied on less than one-third of all residents in the city, because there is no pass-though to tenants and seniors can be exempted.
• By including an exemption for seniors, the school district will miss out on a significant and growing source of revenue.
• This measure will not provide enough money to solve the problems it is intended to address. If parents and voters do not see improvements in the schools as a result of this parcel tax, they will be less likely to support a subsequent parcel tax that is more appropriately targeted.
• There is little to prevent the school district and the union from redirecting the proceeds of this tax to uses other than the augmenting teacher salaries. In the future, the district and union without voter approval could enter into a new memorandum of understanding to redirect the tax funds among the range of uses specified in Prop. A. While this is unlikely to occur given that here is an oversight committee, the drafting of Prop. A does not bind the district to spend the proceeds only on salaries.
• The measure would provide only a limited amount of support for charter schools.

SPUR’s analysis

Teachers in San Francisco do not receive pay commensurate with their importance to our community. While we see ways in which the parcel tax could have raised more revenue, through capturing a larger number of units in the city or making the flat rate higher, and while we believe that renters as well as owners should share in paying for tax increases, we recognize the challenge of reaching the two-thirds majority needed to pass this measure. A direct tax for teacher salaries is the most precise way to target new revenue without losing a substantial portion of the locally-generated revenue in interest payments. Most importantly, this measure contains the first serious reform of teacher civil service rules in years. On the whole, it will help retain good teachers and improve overall teacher quality. SPUR recommends a “Yes” vote on Prop. A.

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Proposition B
"Retiree health care and improved retirement benefits"
RETIREE HEALTH CARE REFORM

Charter Amendment

For future City employees, requires contribution for retiree health care and increases the number of years of service required to receive retiree health benefits.

What it does

This proposed amendment to the San Francisco City Charter would limit how future City employees earn and receive retirement health benefits. The measure also includes an increase in the City’s pension formula. The purpose of the measure is to ensure that the City’s $4 billion unfunded liability for retiree health care does not grow, by limiting future payouts and by pre-funding the liability with payments from employees and the City.

The key changes to the City charter in Prop. B:

• For future City employees, it eliminates lifetime subsidized health care for retirees with only five years of experience, and increases the threshold for full vesting to 20 years of employment.
• It establishes a new contribution of 2 percent of gross salary for future employees to pay to pre-fund their retiree health costs. The City will match with a 1 percent contribution.
• It increases the pension for all current and future employees. The current maximum formula for most City workers is 2 percent of salary per year of service at age 60. The proposed change would increase pensions to a maximum of 2.3 percent of salary at age 62.
• It establishes a compounded cost-of-living adjustment for pension payments. Today, the cost-of-living adjustment each year is the same simple 2 percent of the original pension payment. The compounded growth means that the 2 percent growth is based on the prior year’s pension payment and grows each year.
• It imposes an 18-month wage freeze effective July 1, 2009 through Dec. 31, 2010.

How retiree health care and pensions work now

HEALTH CARE

Under existing policy, when employees with five or more years of service with the City retire, the City pays 100 percent of their health costs so long as the person is 55 years or older. The City also pays 50 percent of the health-care costs for the retiree’s domestic partner or spouse. The required five years of service may include years of service at another eligible California public entity such as the State of California, and the five years of service do not have to be served consecutively. Neither employees nor the City contribute to a fund to pay for the cost of retiree health care. Each year, the City pays the full cost of retiree health care directly out of its General Fund. Whereas in 2001 the City expended $17 million on retiree health care, in 2007 it expended $130 million on retiree health care, an increase of $113 million.

RETIREMENT

Under current policy, the City’s employees — except for those in public-safety departments — are eligible to receive retirement benefits at age 50. The amount of the retirement benefit varies according to the age at which the employee retires and the number of years of service; the older the employee at retirement and the longer the period of service, the higher the retirement payment.

Existing policy also dictates that retirees receive an annual cost-of-living adjustment equal to a maximum of 2 percent of the employee’s initial retirement payment. In years when the retirement system’s investment earnings exceed expected returns, the retirement system may pay employees a supplemental payment equal to 1 percent of their COLA.


Proposition B would eliminate fully subsidized health benefits for retirees who have worked for the City for fewer than 10 years. Instead, it would require future employees to help contribute to their retirement health care funds. The changes would only affect City employees hired after January 10, 2009. Current employees would not have to make any contributions to their future retirement and would keep the same benefits.

Proposed changes under this measure

HEALTH CARE

The proposed measure will make no changes to the health care contributions and retiree care for current employees. It will make changes to the benefits of employees who start work for the City after Jan. 10, 2009. First, it will increase the number of years for which City employees must work before the City will pay 100 percent of their retiree health benefits. Under the proposed legislation, for employees hired after Jan. 10, 2009, the City would begin paying a percentage of the employee’s retiree health cost after 10 years of service, and would not pay for 100 percent of retiree health costs until retirees had completed 20 years of service.

The second change proposed by Proposition B is to establish a mandatory employee and employer contribution to future retiree health-care costs. The mandate would apply to all employees who start after Jan. 10, 2009. Employees would contribute 2 percent of their gross pay and the City would contribute 1 percent.

The proposed legislation would further reduce future retiree health costs by eliminating reciprocity benefits. For example, employees no longer would receive credits for years they worked for other public entities, and employees would be required to retire within 180 days of leaving City employment. Therefore, only consecutive years of service that end in retirement would count toward retiree health-benefit calculations.

The proposed legislation would pre-fund future retiree health costs by creating the Retiree Health Care Trust Fund. Like the City’s retirement fund, this fund would be financed by employee and employer contributions and would be administered by a board of trustees. This board would be known as the Retiree Health Care Board and would be composed of five trustees.

The Retiree Health Care Board would be responsible solely for administering the Retiree Health Care Trust Fund and would not be responsible for decisions regarding the level or type of health coverage offered by the City. The Health Service Board would continue to make those decisions.

The Retiree Health Care Trust Fund would be financed via payments from the City and from employees hired after Jan. 10, 2009. Under the proposed legislation, until the trust fund is fully funded, the City would pay an amount equal to 1 percent of each employee’s salary into it. In addition, employees hired on or after Jan. 10, 2009 would pay an amount not exceed 2 percent of their gross income into the trust fund. Once the Retiree Health Care Trust Fund is fully funded, ongoing costs would be split evenly between the City and employees hired after Jan. 10, 2009. Proponents expect that the contributions from the City and employees would fully fund future retiree health costs by 2031.

RETIREMENT

Under the Prop. B, employees who work beyond the age of 60 would receive enhanced retirement allowances.

The proposed legislation also would change the way cost-of-living adjustments are calculated as well as increase the supplemental COLA from 1 to 1.5 percent. Existing policy mandates a simple 2 percent COLA, which means COLA increases are the same each year — that is, they always are equal to 2 percent of the employee’s original retirement payment. Under the proposed legislation, COLAs would be calculated as a compound 2 percent adjustment, which means that each COLA would take into account all previous increases.

Why it is on the ballot

The City has a $4 billion unfunded retiree-health liability. Changes to the federal General Accounting Standard Board rules now require that public entities report all unfunded future liabilities. Consequently, the City now is required to report that it owes $4 billion in future retiree health costs and that it has no dedicated funding source. This situation is likely to negatively affect the City’s bond rating, making it more expensive for the City to borrow money. In addition, as the City’s workforce ages and employees retire in increasing numbers, the City’s future retiree health costs are likely to increase. As a result, a larger portion of the City’s budget will be dedicated to funding retiree health care and less discretionary funding will be available to fund City programs and priorities.

The mayor and Supervisors Sean Elsbernd and Aaron Peskin sponsored this charter amendment. It received unanimous support from the Board of Supervisors to be placed onto the June ballot. Like all changes to the city charter, it requires a vote of the people.

The final version that will appear on the ballot is the result of a major compromise between the City and the many public-sector labor unions who also support the measure. Proposition B’s adjustments to the City’s pension formula are necessary components that secured the support of unions for the new requirement of employee payments for retiree health care.


Under Proposition B, employees who work beyond the age of 60 would receive enhanced retirement allowances up to a maximum of 2.3 percent of their final salary per year for every year worked.

Pros

Arguments for this measure:

• This is a timely and necessary measure that addresses the growing issue of how to pay for future retiree health costs. It establishes a fair and new system whereby both the City and future employees will pay to fund their retiree health costs.
• Because the City’s workforce is aging, retiree health costs are expected to increase even more quickly in the future, and we need to begin solving this issue now.
• The City would be taking an important step toward containing future retiree health costs, which likely would have a positive effect on the City’s bond rating and therefore reduce the City’s borrowing costs. In addition, pre-funding the City’s future retiree health-care liability would make San Francisco a pioneer in good governance.
• San Francisco offers one of the most generous retiree health systems in the region, but ranks second to last among regional public agencies in terms of retirement pension benefits. The proposed legislation requires the City to strike a delicate balance between reducing health benefits and increasing pension benefits.

Cons

Arguments against this measure:

• While the proposed legislation reduces the City’s future retiree health costs, it also establishes a permanent increase in pension payments. The actual costs of this increase are unknown and could be substantial for the City in perpetuity.
• Estimated costs and savings for the retiree health and pension plans are highly sensitive to actual hiring and retirement patterns, turnover in the current workforce, the number and demographic profile of new hires, and societal conditions such as the presence or absence of a national health-care system. If any of the assumptions made when calculating the costs and benefits of this measure were to change, the increased pension cost could actually exceed retiree health savings.
• While pre-funding retiree health benefits is likely to positively affect the City’s bond rating, increasing the City’s pension costs is likely to negatively affect credit analysts’ view of the City’s financial condition. Therefore, the net financial impact of this legislation is unknown.
• The proposed legislation creates a two-tier system that requires future City employees to participate in funding their own retiree health-care benefits, but requires little of existing City employees. Whereas future City employees will receive the benefit of pension enhancements but must partially fund their retiree health-care benefits, current City employees will benefit from pension enhancements without being required to make a financial contribution toward retiree health benefits. This measure greatly advantages existing employees at the expense of future ones.
• While the proposed legislation addresses the critical issue of funding the retiree health costs of future city employees, the legislation does nothing to resolve the existing $4 billion unfunded retiree health liability. This is because the current unfunded liability is based on the projected retiree health costs of existing City employees. Because of legal restrictions, it is not possible to reduce the expected level of City contribution to the health care for existing employees when they retire.

Fiscal analysis

Proponents of the proposed legislation estimate that the City would save $49 million dollars by reducing and pre-funding the City’s future retiree health costs. However, these savings would emerge over time. In the short-term, due to pension enhancements, the proposed legislation likely would increase retirement expenditures. In the very short-term, these increases would be partially offset by the proposed 18-month wage freeze for non-safety employees that would begin July 1, 2009 and end June 30, 2010. Considering all factors, in the first 20 years of its implementation the proposed legislation is expected to cost $84 million annually, which represents a 3.55 percent payroll increase. After 20 years, when the effect of pension enhancements that encourage employees to work until age 60 — the age at which Medicaid coverage begins — is felt, the total cost of the proposed legislation would decrease to $27 million per year, resulting in a $35 million savings per year.

SPUR’s analysis

The City’s pension and health systems are highly technical policy arenas that require a great deal of expertise and patience to understand. In addition, both systems are highly politicized. The fact that we have a compromise measure on the June ballot that received both unanimous support from the Board of Supervisors and support from the public-sector unions is a testament to the importance of the issue and the effectiveness of the proponents.

Still, the measure combines an attempt to address the retiree health-care issue with an increase in pension benefits. By conflating these two independent issues, the measure loses some of its effectiveness. Given that the fiscal benefits of this measure are expected to emerge over the course of 30 years, it is likely that some of the assumptions made when the fiscal analysis was conducted are incorrect. Most importantly perhaps, it does not begin to address the current unfunded health liability, because it asks nothing of current employees. All costs and contributions will be borne by future employees and the City.

Still, this potential solution to the retiree health-care problem is the result of a unique confluence of political and economic circumstances and personalities that might not appear again. We believe that the charter amendment before the voters is the best possible policy reform we could have, given the current political environment. Lastly, many of the potential pitfalls in the proposed legislation can be addressed through future action by the City. Some of those suggested reforms:

• The City should create a separate funding scheme that would address how the City should finance the existing retiree health liability. One of the tough legal and political questions is how to get existing employees to help fund this outstanding liability. as opposed to saddling future employees with the entire burden of paying it off.

• Given the level of uncertainty regarding the assumptions and the length of time over which benefits are expected to accrue, SPUR recommends the City perform regular financial analyses that measure the financial impact of the proposed legislation.

Though far from perfect, Prop. B is an adequate solution to the unfunded retiree health liability. SPUR recommends a “Yes” vote on Prop. B.

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Proposition C
"Retired employees convicted of crimes involving moral turpitude to forfeit pension benefits"
MORAL TURPITUDE

Charter Amendment

Increases funding and reduces student fees at California Community Colleges without identifying a specific revenue source for the increase funding.

What it does

“Moral turpitude” is a term that refers to the conditions and motivations under which a crime was committed, not an action defined in the wording of a law. Courts have made varying determinations of what constitutes moral turpitude in the commission of other crimes, but in general it means that a crime was committed with depravity or moral corruption. As applied to crimes that might be committed in connection with employment with the City, moral turpitude often involves some kind of theft of public property, including materials and services.

Proposition C is an amendment to the San Francisco City Charter that would prevent retired City employees who are convicted of crimes of moral turpitude from receiving the City-funded portion of their pension, if the crimes were committed “in connection with their employment.”

There are two types of retirement from employment with the City: service retirement and disability retirement. Service retirement means that an employee retires because he or she has worked for the City for a specified number of years, or because he or she has reached a specified age. Disability retirement means that an employee retires because he or she is physically unable to continue to perform the duties of his or her job.

This charter amendment clarifies an existing provision in the charter to specify that employees who retire because of disability are subject to the same restriction that prevents other retired employees from collecting the part of their retirement benefits funded by the City if they are convicted of crimes of moral turpitude. If a retiree were denied the publicly funded portion of his or her retirement benefits, the employee still would get back all of the contributions he or she made toward those benefits.

In the 40 years that San Francisco’s existing law has been on the books, only a handful of people have been convicted and denied City-funded benefits under its provisions.

Any retirement benefits that are funded by employee contributions would not be affected by Proposition C or by the existing portion of the charter it would amend.

Individuals and employees of businesses who perform services for the City under contract, as well as City employees who are not covered by the City retirement system, would not be affected by this proposition.

Why it is on the ballot

While only a few people have been denied City-funded benefits under existing law, Proposition C is on the ballot because of a recent court decision regarding a case in which the City tried to enforce that law.

Several years ago, a City employee was convicted in court of stealing auto parts from the City and County of San Francisco. That person later was injured on the job, and retired from City work under disability provisions.

The San Francisco Retirement Board denied the retired employee City-funded retirement benefits based on the moral turpitude rule. This retired employee sued, arguing that the city charter was not clear regarding whether the rule applied to people who retired because of disability. In a decision earlier this year, the San Francisco Superior Court agreed.

The retirement board wanted to clarify this question and explicitly stipulate that the moral-turpitude rule applies to employees who retire because of disability as well as those who retire because of age or length of service with the City. Because a voter-approved amendment to the San Francisco City Charter created the 1966 moral-turpitude law, the only way to modify it is through another charter amendment approved by voters.

The vote at the Board of Supervisors to place this measure onto the ballot was 10-1, with Supervisor Chris Daly the dissenting vote. There had been a proposal for an amendment that would have made the moral turpitude rule apply only to felony crimes. That amendment did not pass. Daly voted for the amendment, along with other members of the Board.

Pros

Arguments in favor of the measure:

• San Francisco provides its public employees with generous retirement benefits, partly out of an implied trust that these employees will serve the public good efficiently and ethically. The public should not be required to subsidize the retirement of employees who violate this trust, particularly when they violate it with depravity.
• Prop. C clarifies existing charter language that had been unclear about whether or not someone convicted of a crime of moral turpitude was still eligible for pension benefits even if they retired from the City as a result of a disability. This measure doesn’t impose any new restrictions on disability retirees, but instead clarifies the law by reiterating the intent to include them in the provisions of the existing law, an intent expressed by the voters who passed the original charter amendment in 1966.
• The government must take measures to safeguard the public’s property from misuse and theft. Proposition C will serve as a strong deterrent against the calculated misappropriation of public property.

Cons

Arguments against the measure:

• While the intent to discourage criminal behavior in the execution of public duty has merit, this measure casts its net far too widely. Without the failed amendment to specify that this measure would apply only to employees convicted of felonies, it is possible that some longtime employees could be stripped of their City-funded benefits for petty violations of the law.
• Many employees who chose to retain their City jobs for years easily could have chosen instead to leave for more lucrative positions in the private sector. It is only fair that in return, the City should provide rules governing their eligibility for retirement benefits that are clear and explicit. The moral-turpitude rule instead provides a moving target, with crucial retirement benefits hanging on the matter of an employee’s supposed intent and on the courts’ constantly changing definition of what moral turpitude actually is.

SPUR’s analysis

The purpose of this measure is straightforward — to clarify the language of a long-standing City law and addresses a problem that comes up only rarely. San Francisco voters were clear in their intent in 1966, when they approved the Charter amendment to deny publicly funded benefits to retired employees convicted of crimes of moral turpitude. Proposition C simply clarifies the language of the law to satisfy the concerns of the Superior Court.

While the definition of moral turpitude may be somewhat fluid, and while it would be better if this rule were narrowed to apply only to convictions for felonies, Proposition C is a strong good government measure that deserves our support. SPUR recommends a “Yes” vote on Prop. C.

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Proposition D
“City policy regarding diversity on City boards and commissions”
DIVERSITY ON CITY COMMISSIONS

Charter Amendment

Strengthens the City’s policy to promote diversity on boards and commissions and adds “types of disabilities” as a diversity criterion to consider.

What it does

Proposition D makes three changes to the San Francisco City Charter related to diversity on City boards and commissions. First, it adds “types of disabilities” to the list of diversity criteria. Second, it mandates that each commission should “reflect the interests and contributions” of the people represented by the broad mix of diversity criteria. Third, it specifies that the Commission on the Status of Women shall conduct an analysis of appointments to City boards and commissions every two years to track the diversity of appointments to those bodies.

The current charter includes language mandating that the “composition of each appointive board, commission or advisory body … be broadly representative of the communities of interest, neighborhoods, and the diversity in ethnicity, race, age, and sexual orientation of the City and County and have representation of both sexes.” Proposition D would add “types of disabilities” to the list of diversity criteria.

Proposition D also adds language that specifies that this diversity goal is official City policy. The additional language also specifies that “each Board or Commission … shall reflect the interests and contributions of both men and women of all races, ethnicities, sexual orientations, and types of disabilities” and “urge in the strongest terms” that City officials “consider and as appropriate support” nominees who meet the diversity criteria. This new section, however, only identifies race, ethnicity, gender, sexual orientation, and disability as diversity goals. The current list of diversity criteria in the charter also includes age and neighborhood.

Proposition D would require a report every two years by the Commission on the Status of Women regarding appointments to the various boards, commissions and advisory bodies.

Because state law prohibits quotas, this measure could only provide stronger language in the pursuit of goals, and does not give legal recourse to nominees or potential nominees if they ultimately are not selected to a board or commission that could have become more diverse with their appointment.

Why it is on the ballot

This measure is a charter amendment that received the support of a majority of members of the Board of Supervisors to go onto the ballot.


According to an analysis by the Department on the Status of Women, the percentage of women on commissions, boards and task forces is slightly less than the percentage of women in the city overall. Of the 284 commission seats that are filled, 48 percent are filled by females and 52 percent by males.

Pros

Arguments in favor of this measure:

• Current City policy does not include disabilities as a distinct diversity goal on our boards, commissions, and task forces. By adding disabilities, this measure broadens our diversity goals as a City.
• Keeping track of diversity is an appropriate way to measure progress towards an existing City policy goal of increasing diversity. Prop. D both requires a biannual report and assigns this report to a specific agency, thus establishing a system for tracking progress over time.

Cons

Arguments against this measure:

• We already have a City goal and policy to promote diversity on boards and commissions. This measure does not seem to address a problem that requires charter reform to solve.
• While the measure adds disability as a diversity goal, it leaves out many other factors of diversity. In particular, Prop. D does not include many key diversity criteria that are particularly relevant for San Francisco — namely ancestry, national origin, marital status, familial status, religion, educational status and income. As a charter reform of our diversity goals, it would be more appropriate for Prop. D to have included a more complete list of diversity criteria. Many of these additional diversity criteria are already recognized in the Constitution of the State of California.
• It is inappropriate for the diversity analysis to be conducted by the Commission on the Status of Women instead of the Human Rights Commission, which has a broader mandate. If we wish to use the City Charter to identify a permanent role for a specific department to write a report, this is best done as part of a broader charter-reform effort that looks at all charter agencies.
• Whenever more requirements are put on commissions, it becomes harder to fill the seats, and can lead to vacancies on the commissions.
• This proposition could make future appointments a fight over whether or not a candidate helps a specific commission reflect the diversity of the City at large, as opposed to a decision based on the qualifications of the candidate. Further, it moves the City away from a goal of looking at the aggregate diversity across all commissions.
• There is no provision in this proposition for filling commission seats when no candidate can be found who meets the diversity criteria.
• “Types of disabilities” is a vague term that does not reflect the true interests of people who are disabled.
• This measure implies that the current composition of many commissions is inappropriate. For example, the measure implies that the membership of the Commission on the Status of Women, which is all women, is out of keeping with the overall diversity of the City. The measure makes it unclear what should happen to commissioners or commissions that do not precisely reflect the overall diversity of the City.

SPUR’s analysis

There is no question that broad diversity across all commissions is a paramount goal in a diverse city such as San Francisco. Our current charter includes such language and goals. Therefore, it is not clear what specific problem this charter amendment is seeking to solve. In addition, while it does add disabilities to the list of diversity criteria, it leaves out other important sources of diversity that already are protected classes in our state constitution — namely ancestry, national origin and religion. Further, by strengthening the language of the charter, it creates an impossible goal that each commission should reflect the diversity of the City (as measured by a partial list of criteria). Instead, we should be pursuing a goal as a City that the aggregate representation on our appointed boards, commissions, and task forces reflects the broadest set of diversity criteria. Unfortunately, this charter amendment is not such a policy. In the end, we agree with the goals of diversity but think that this measure is not fully thought through as the solution to increasing diversity. SPUR recommends a “No” vote on Prop. D.

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Proposition E
“Requiring Board confirmation of appointments to the Public Utilities Commission”
SFPUC COMMISSIONER APPOINTMENTS

Charter Amendment

Establishes minimum qualifications for members of the San Francisco Public Utilities Commission and makes it easier for the Board of Supervisors to block the mayor’s appointments to the SFPUC.

What it does

Currently, the mayor can appoint all five members of the San Francisco Public Utilities Commission. The Board of Supervisors can reject a nominee from the mayor with the votes of eight of the 11 members of the Board of Supervisors. If the Board of Supervisors cannot get eight members to vote against a nominee, the nominee automatically becomes a member of the SFPUC. In addition, the mayor can select whoever he or she wants to be on the SFPUC. There are no minimum qualification requirements for being a commissioner to the SFPUC.

Prop. E makes two changes to the charter section affecting the governing commission of the SFPUC. The first change is to reduce from eight to six the number of supervisors needed to reject a mayoral nominee. The second change would establish minimum qualifications for specific seats on the SFPUC:

• Seat 1: Experience in environmental policy and an understanding of environmental-justice issues.
• Seat 2: Experience in ratepayer or consumer advocacy.
• Seat 3: Experience in project finance.
• Seat 4: Expertise in water systems, power systems or public-utility management.
• Seat 5: No specific experience required. This seat is “at-large.”

The onus will be put on the nominated commissioner and the mayor to prove that the individual meets the specified requirements.

If this measure passes, all current members of the SFPUC as of Aug. 1would resign. The mayor then would have to appoint new members to the SFPUC or reappoint existing members under the new minimum qualifications. To provide for staggered terms, Seat 2 and Seat 4 would have an initial term of only two years, while the other seats would have terms of four years. At the end of their respective terms, the members of the SFPUC could be reappointed by the mayor and again would be subject to the same approval process at the Board of Supervisors.

Why it is on the ballot

In recent years the Board of Supervisors has sought greater control in the nomination or approval of commissioners. For example, a 2002 ballot measure split the nomination of members to the Planning Commission and Board of Appeals between the mayor and the Board of Supervisors. Previously, the mayor appointed all members to those two City bodies. Prop. E continues that ongoing struggle between the City’s legislative and executive branches by giving more authority to the legislative branch in the approval of nominees.

Early drafts of this measure included provisions to give members of the Board of Supervisors the power to appoint some of the commissioners themselves. However, the final version included only language allowing them to reject or approve the mayor’s appointments with a simple majority of six supervisors, as opposed to a super-majority of eight.

This measure is nearly identical to a measure drafted several years ago by former Supervisor Tony Hall. That measure did not make it onto the ballot.

Pros

Arguments in favor of this measure:

• Requiring a minimum set of qualifications is a practice used by many advisory bodies and committees, in both San Francisco and throughout the state. The qualifications required under Prop. E could help ensure that there will be the right mix of expertise on the SFPUC over time.
• Unlike many commissions, the SFPUC makes decisions that directly financially affect many local residents when it sets water and sewer rates. By giving members of the Board of Supervisors greater power to approve or reject nominees, this measure allows supervisors to be more responsive to constituents who take issue with SFPUC rate changes.

Cons

Arguments against this measure:

• This measure transfers power to the Board of Supervisors and reduces the authority of the mayor in nominating commissioners. San Francisco's traditional split between legislative functions and executive functions has served the city well. The 1996 San Francisco City Charter continued the strong-mayor form of government, so that the voters can hold the mayor accountable for the actions of the executive-branch commissions at election time.
• By reducing the mayor’s power, this measure makes it less clear who would be held accountable for the performance of the SFPUC on major projects affecting the entire city.
• Adoption of this measure could lead to the replacement of the entire membership of the SFPUC, which would be disruptive — especially because of the significant repairs and upgrade projects in progress for the water system.
• This is a solution in search of a problem. There is no evidence that the current mix of commissioners on the SFPUC is inadequate or lacking in appropriate experience.

SPUR’s analysis

The institutional design of a public body needs to have a long-term policy logic, and should not be based simply on the personalities of the individuals who are around today. It is bad policy to make such a major change in the philosophy of the balance of powers in the city charter based on the political leanings of current elected leaders. This measure is, in fact, a straightforward power grab in the continuing attempt by the current members of the Board of Supervisors to reduce the power of the office of the mayor.

SPUR has been consistent in our view about similar measures to shift the balance of power between the executive and legislative branches. In 2006, we opposed Proposition C, which would have given the Board of Supervisors majority control over the Transbay Joint Powers Authority. In 2002, we opposed Proposition D, which gave the Board of Supervisors more control in appointees to the Planning Commission and Board of Appeals.

There are clearly policy choices the SFPUC faces such as the relative reliance on water conservation versus storage, how rainwater should be managed relative to sewage, and the extent of local investments in energy. These policy choices should involve the Board of Supervisors as the City’s legislative deliberative body. However, day-to-day management of City agencies is not something that needs to be overly politicized. Sometimes, we just need excellent service delivery. We believe that giving the mayor more leeway in nominees to the SFPUC is one of the ways to accomplish this. It also allows us to hold the mayor more accountable if the SFPUC does not achieve its goals.

While we recognize that other departments do have minimum qualifications for members of commissions, and we see the merit of including those qualifications at the SFPUC, we think the harmful impact of the timing of this measure trumps the public-policy arguments in favor of that reform. SPUR recommends a “No” vote on Prop. E.

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Proposition F
"Affordable Housing Requirement for the Bayview Hunters Point Area Development Plan"
AFFORDABLE HOUSING IN BAYVIEW HUNTERS POINT

Ordinance

Mandates that 50 percent of all new housing units built in the Bayview Hunters Point Redevelopment Area are “affordable” at specific income levels.

What it does

Proposition F is an initiative ordinance that sets forth policies requiring that in the development plan for the Bayview Hunters Point area, at least 50 percent of all new housing units developed in the project site must be “affordable.” The initiative specifies that one-sixth of all units affordable to households earning no more that 80 percent of the San Francisco median household income; one-sixth affordable to households earning no more than 60 percent; and one-sixth affordable to households earning no more than 30 percent.

Bayview Hunters Point is currently proposed to undergo major redevelopment. The overall scope of the new development is the subject of a different ballot measure on the same ballot– Prop. G. This initiative ordinance (Prop. F) is a competing measure to Prop. G in that it sets different terms for the level of affordable housing than what is included in Prop. G.

As part of planned changes for the Bayview Hunters Point area, the existing Alice Griffith public housing development at Griffith Street and Gilman Avenue is scheduled to be demolished and rebuilt, as the City has done with a number of other public housing developments throughout San Francisco. The Alice Griffith public housing development was built in 1962 and has 254 units.

Prop. F also requires that the rebuilding of the Alice Griffith public housing development provide at least the replacement of the same number of units at the same income levels as those of existing residents, and requires that the rebuilding be phased so that no displacement occurs until replacement units are ready for occupancy.

The measure provides that preferences for the rental or purchase of new affordable housing be given to families in the following order of priority: any Alice Griffith resident in good standing; people entitled to residential relocation assistance; individuals paying more than 50 percent of their income for housing or residing in public housing or federal Department of Housing and Urban Development Section 8 housing; San Francisco residents; and the general public. (Section 8 is a federal program that subsidizes the housing costs of people with very low incomes, who live in units that are not owned by the government.)

The City would not permitted to sell or lease City-owned land at Candlestick Point until the Board of Supervisors finds, following the required public review process, that the integrated development plan incorporates these policies.

Why it is on the ballot

Prop. F appears on the ballot as a result of a voter initiative spearheaded by Supervisor Chris Daly and the local organization People Organized to Win Employment Rights (POWER).

In May 2007 the Board of Supervisors and the mayor endorsed a “conceptual framework” for developing Hunters Point and Candlestick Point. The framework set forth certain goals and principles to guide the proposed redevelopment of the areas and contains a guiding principle that at least 25 percent of the new housing units should be “affordable.” The framework does not define “affordable” but instead states: “the affordable units will serve a range of income levels and household sizes and generations, and will be integrated into the Project as a whole with the market rate housing. The affordable housing program will be shaped to serve the BVHP community, where the median income is lower than that of the City as a whole.” The framework also calls for possibly rebuilding Alice Griffith public housing units as part of the project, and those units would be in addition to the 25 of new affordable units.

The proponents of Prop. F believe that the conceptual framework proposes a level of affordable housing that should be far higher. The level of 50 percent affordable that is in Prop. F was not selected based on financial feasibility.


Proposition F calls for 50 percent of new housing units built in Bayview Hunters Point to be affordable to individuals who earn no more than specified income levels. Increasing the required level of affordable units to 50 percent would render the development plan financially infeasible.

Pros

Arguments in favor of this measure:

• There is a large need for affordable housing in San Francisco and the neighborhoods affected by this proposal. If this measure could produce as much affordable housing as it purports to, it could help solve one of our most vexing challenges.

Cons

Arguments against this measure:

• This measure would make redevelopment of Bayview Hunters Point infeasible. It is not possible to produce 50 percent of the units in the plan area as affordable housing without significant public subsidy.
• The Bayview Hunters Point neighborhood has experienced massive disinvestment and job loss over the past three decades. To propose an initiative that could be, in effect, a “poison pill” to the redevelopment plan for the area is irresponsible, as it could result in no further redevelopment for the area.
• The final development plan must be reviewed and approved by the Redevelopment Agency, the mayor and the Board of Supervisors. There will be ample opportunity through the normal review process, which will include review of detailed financial analyses, to determine what level of housing-unit affordability it is economically feasible to require.
• Affordable requirements, like all exactions on development, need to be established through a rigorous feasibility analysis, not pulled out of the air. There has been no economic analysis to support the feasibility of the initiative’s affordability requirements.
• Establishing specific income-level requirements for the housing units through the ballot box is bad planning and bad policy.

SPUR’s analysis

SPUR is a strong advocate for affordable housing. We have supported efforts at the state and local level to increase funding for affordable housing and supported the recent increase the inclusionary zoning requirement in San Francisco The conceptual framework for the development plan provides that 25 percent of the units must be affordable. This level is already higher than the citywide inclusionary housing law and the state requirements for redevelopment plans. Increasing the requirement to 50 percent at the ballot, without an analysis of its economic feasibility and impact on project viability, is irresponsible at best. There will be ample opportunity, as the project plans go through the myriad approvals that are required, to set fees and exactions at the right levels. If something sounds too good to be true – like 50 percent affordable housing without having to impose a tax on ourselves to pay for it – then it probably is. This is not a serious housing proposal. SPUR recommends a “No” vote on Prop. F.

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Proposition G
“The Bayview Jobs, Parks and Housing Initiative”
BAYVIEW HUNTERS POINT DEVELOPMENT PLAN

Ordinance

Approves a framework for a new mixed-use development plan for Bayview Hunters Point and Candlestick Point, and repeals the 1997 voter initiative for a stadium and mall at Candlestick Point.

What it does

“The Bayview Jobs, Parks and Housing Initiative,” Proposition G, is a general framework for the continued redevelopment of the Hunters Point Naval Shipyard and Candlestick Point. The areas affected include the former shipyards, the Alice Griffith public housing development, the Candlestick Point State Recreation Area, and the Candlestick/Monster Park stadium and associated parking areas. Prop. G sets out the purposes, objectives, policies, and governmental and public review that will guide the development plan for the project site), and provides a mechanism for making changes resulting from the public review process. It also repeals the ballot measure approved in 1997 to accommodate the now-abandoned proposal for a new stadium and mall at Candlestick Point.

Proposition G would establish as City policy that the City — subject to the public review process — shall encourage the timely development of the project site with a mixed-use project that includes new space for parks, housing, economic development and entertainment.

If approved in June, Prop. G would also express the voters’ intent that the City and other applicable agencies should move forward with the revitalization of the project site in Bayview Hunters Point. Prop. G specifically identifies investments in parks, housing, retail, economic development, and entertainment.

Parks: Prop. G aims to improve and create additional public parks and public open space in the Bayview. Prop. G proposes more than 300 acres of public parks and public open-space improvements, including improvements to the existing Candlestick Point State Recreation Area. Prop. G also includes establishment of a new state park area on the shipyard property.

It also authorizes the transfer of the current open space of Candlestick Park and its adjacent parking to non-park uses. This reauthorization requires voter approval and stipulates that the new public parks or open space must be at least equal in size to the lost open space and must be created in appropriate locations elsewhere in the project site.

Housing: Prop. G aims to improve the quality, availability and affordability of housing in the Bayview, and potentially improve the quality of the Alice Griffith public housing development by rebuilding. The measure proposes between about 8,500 and 10,000 new housing units, with a mix of rental and for-sale affordable and market-rate units. Although the ballot measure does not specify a specific percent of those units to be affordable, the measure does refer to a conceptual framework for the development plan (adopted in May 2007) that contains a guiding principle that at least 25 percent of the new housing units should be affordable. The level of affordability, however, is not defined.

Retail: Prop. G seeks to add retail space that will serve both local residents and residents from throughout the City. The measure calls for about 600,000 square feet of regional retail space and 100,000 square feet of neighborhood-serving retail.

Economic Development: Prop. G intends to elevate Hunters Point shipyards into a regional center for green development and the use of green technology, and to provide commercial opportunities and jobs for the residents of the Bayview. The measure proposes about 2 million square feet of green office, biotech research and development, and industrial uses on the shipyard and on about 1,500 square feet at Candlestick point.



Entertainment: Prop. G intends to encourage the 49ers football team to remain in San Francisco. The concept put forth in Prop. G includes a site for an arena or other public performance venue, if practicable. It also includes a site for a new 49ers stadium and green parking surfaces serving as parking during stadium events, and as public playing fields at other times. If a stadium is not built, then additional green businesses or cleantech research and development, industrial space or housing could be built on the stadium site.

Although Prop. G specifies development goals described above, the measure also states that as a result of factors such as a public process, changes to market conditions, economic feasibility and decisions by the 49ers about their departure from Candlestick Park, the final development plan and the boundaries of the project site may be materially different than those put forth in the proposition.

The development plan will require approval from the Board of Supervisors, the mayor and the Redevelopment Agency, and implementing it would require amendments to the City’s General Plan and existing redevelopment plans. Prop. G encourages the approval of such final development plans so long as the Board of Supervisors and mayor determine that such plans are generally consistent with the following objectives:

• Plans should produce tangible community benefits for the Bayview and the City.
• Plans should unify the project site with the Bayview and protect the character of the Bayview for its existing residents.
• Plans should include substantial new housing in a mix of affordable and market-rate units, both for rent and for sale, and should encourage the rebuilding of Alice Griffith public housing.
• Plans should incorporate environmental-sustainability concepts and practices.
• Plans should encourage the retention of the 49ers by providing a site for a new stadium and supporting infrastructure.
• Plans should be fiscally prudent with or without a new stadium.

Why it is on the ballot

Hunters Point was established as the Pacific Coast’s first dry dock in the 1860s. The Navy then began using the site for ship repair and construction in 1919 and purchased the land in 1939. From WWII until 1974, the Shipyards was a Navy base specializing in ship building and repair. Between 1976 and 1987, the site was leased to a private company. In 1989, as a result of decades of use of toxic substances onsite by both the Navy and private firms, the Federal government declared the Shipyards one of the nations worst toxic sites. Then in the early 1990s, the Department of Defense selected Hunters Point Shipyards for closure and the City began working closely with the Navy on transferring the property to the City.

In 1997, the City voters approved a redevelopment plan that provided a framework for the reuse and development of the site. That plan included the creation of a new 49ers football stadium and adjacent mall. The plan was not implemented, however, in part because of leadership changes at the 49ers.

In the past several years, the 49ers stated their intention to leave San Francisco. They determined that the new stadium proposed in the 1997 plan would not work at its current site because there would not be sufficient room for surface parking (as the plan relied on structured parking for fans). This indication by the 49ers that they were seeking to leave San Francisco provided new urgency to approve a different development plan for the Shipyards. The City and the Redevelopment Agency began a planning process to develop a vision for the site that is different from the 1997 voter-approved plan for a 49ers stadium and mall.

Prop. G repeals the 1997 initiative and redevelopment plan and replaces it with a new conceptual plan for the redevelopment of Bayview Hunters Point. While voter approval is not required to revise the 1997 plan, such approval is necessary to change the zoning for the existing stadium to allow a different type of use, because the current stadium and the surrounding parking lots are classified as open space. According to the San Francisco City Charter, converting open space to another use requires a vote of the people. The charter also requires that the City replace the lost open space with at least as much new open space.

Since this voter approval already was required to change the use of the stadium land, the mayor decided to seek voter support for the broad outline of the development plan. The idea was to seek voter approval for the conceptual framework outlined in this initiative.

Prop. G was placed onto the ballot through signatures. The main source of funds for the measure was from Lennar Corp. who hired the signature gatherers who gathered about 20,000 signatures over the course of 10 weeks. For some years, the City has been working on the Development Plan for Hunters Point Shipyard with the Lennar Corp., which has an exclusive negotiating agreement with the Redevelopment Agency.


The development plan for Bayview Hunters Point includes provisions for new commercial uses, affordable housing and public open space along the waterfront. Prop. G would expand the Candlestick Point Recreation Area, which is currently proposed for closure.

Pros

Arguments in favor of this measure:

• For several decades, Hunters Point was a major job center in San Francisco, but since the 1970s it has lost tens of thousands of jobs and has struggled with the lost investment in economic development. This plan would bring back to the area many jobs, housing opportunities and overall economic development, while enhancing the economic base of the city.
• The plan provides tangible job and business opportunities to residents of the Bayview neighborhood. In particular, the plan includes significant space for cleantech firms, which (if properly planned) could help spur growth of that emerging sector in San Francisco.
• Proposition G would make a major contribution of much-needed housing, including a significant amount of affordable housing. In particular, it would enhance the feasibility of replacing the dilapidated public housing units in the plan area without adversely affecting current residents — and without using public dollars.
• Prop. G would provide substantial additions of useable public parks and open space for residents of Bayview, the city and the region, without using any General Fund dollars. In particular, Prop. G would expand the Candlestick Point Recreation Area, which is proposed for closure by the governor, and make it attractive and useful.
• Prop. G would facilitate the toxic cleanup of the shipyard. The federal government has awarded $86 million for the cleanup, on the condition that a development plan goes forward.
• Prop. G would provide for the possible retention of the 49ers without additional public investment, but provides for viable development with or without a 49ers stadium.
• Because Prop. G is mainly a framework for development, the specifics of the development can be changed by the ongoing planning process. This measure does not lock in detailed planning and zoning language at the ballot box.

Cons

Arguments against this measure:

• While the measure states many desirable goals, as a framework for development, there is insufficient guarantee that all the elements will be accomplished.
• Too much reliance is placed on Lennar Corp., which has the exclusive negotiating agreement to carry out the development plan. If the company were to face financial troubles, some of the proposed development in the plan might not occur.
• Some argue that the conceptual framework does not provide enough affordable housing and that more could be provided if the investors were willing to have a lower profit margin.
• The plan includes far too much land for the 49ers football stadium, which could just as well be located in Santa Clara. The land could be much better used as either park space or additional land for cleantech businesses and year round jobs . Locating the stadium in the shipyard requires overbuilding a road infrastructure from the freeway to the stadium for only about eight 49ers home games.
• The plan is not well served by transit. In many ways, the area could end up more like the Presidio (which is relatively car-dependent) than Treasure Island (which will be more dependent on transit and walking) because it has not solved the enormous transportation challenges faced in most former military outposts. Locating so many trip generators far from BART or Muni metro creates huge challenges if one is seeking to avoid a car-dependent environment. It requires a particularly inventive transportation plan, which this plan lacks.

SPUR’s analysis

We are always skeptical and cautious about proposals for planning and zoning at the ballot box. But Prop. G (unlike ballot-box zoning that sets a plan into stone) is a framework stated in general terms that allows City and Redevelopment Agency staff to make changes as it continues through the planning process, without going back to the ballot.

The transfer of parkland from Candlestick Park stadium to the shipyards must come to voters for approval. This action could not be taken legislatively.

We also know that the planning and redevelopment of the Hunters Point Naval Shipyard and Candlestick Point have been challenging. City and Redevelopment Agency staff members have done an admirable job of putting forth a proposal that combines economic development, neighborhood creation and enhancement, affordable housing opportunities, and much-needed parks and open space. We look forward to future refinements of the plan. Specifically, we hope that the plan increases its orientation toward sustainable transportation and also includes specific targets for affordable-housing production.

We strongly support the plan’s encouragement to rebuild the Alice Griffith public housing development in consultation with Alice Griffith residents, and the replacement of the Alice Griffith units on a one-for-one basis targeted to the same income levels as those of the existing residents.

While we are skeptical of building a plan around the uncertain location decisions of a sports team, we are pleased that this plan works with or without the 49ers. We believe that the idea that the plan ought to provide 50 percent of its units at affordable levels (expressed in Proposition F on this same ballot) is unrealistic. While we hope that the maximum amount of public benefits (including affordable housing) will be provided by this project, and we hope that the City continues to negotiate aggressively for a strong public-benefits package, we do not want to see public-benefits requirements pushed to the point of making the project financially infeasible — an outcome that would result in no new economic development, no new open space and no new affordable-housing opportunities in this important and historically underserved part of the city.

In total, the basic concepts for the redevelopment of Bayview Hunters Point should move forward. SPUR recommends a “Yes” vote on Prop. G.

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Proposition H
“Prohibition on accepting campaign contributions from contractors doing business with the City”
CAMPAIGN CONTRIBUTION LIMITS

Proposition H would extend the existing campaign-contribution restrictions on City contractors to include the elected official or candidate who solicits the contribution.

What it does

Proposition H expands restrictions in the San Francisco City Charter to make it illegal for an elected official or candidate to accept or request funds from someone who does business with the City, or someone who is negotiating a contract with the City.

Current law regulates contributions from people who have business contracts with the City of San Francisco, the San Francisco Unified School District, the San Francisco Community College District or a state government board on which an appointee of the official serves. The restriction applies to a contractor who gives money to a candidate for local office, a sitting elected official or a political committee that a candidate or official controls. The restriction applies only to those with contracts or series of contracts worth more than $50,000. People covered by the regulations are prohibited from making contributions from the start of negotiations for the contract until six months after the City approves the contract (or six months after the contract is finalized, whichever is longer). Under current law, it is not illegal for a candidate or elected official to solicit the funds from a City contractor.

Prop. H would add to the current law to prohibit candidates and elected official from soliciting or accepting contributions from City contractors. Current law only restricts the contribution from a contractor but does not prohibit the candidate elected official from accepting the money. Under current law the only penalties apply to the contractor, but Prop. H would establish penalties for officials and candidates who accept such contributions.

Prop. H would require candidates or elected officials to determine whether the people from whom they solicit contributions are restricted contractors with the City. Under Prop. H, if the candidate or elected official accepts prohibited contributions, then he or she would be subject to the same penalties as the contractor.

Penalties for violating these donation restrictions include civil and criminal penalties. The criminal penalties for any person who knowingly violates these regulations can be as much as $5,000 in fines and six months in county jail. So far, no one who has broken a campaign-finance