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ballot analysis
NOVEMBER 2006
A Comprehensive Guide to San Francisco's Ballot Measures
Released
Oct. 1, 2006
Contact
Egon Terplan, Economic Development and Governance Policy Director
781-8726 x131, eterplan@spur.org
SPUR's Ballot Analysis
Eleven City measures appear on the San Francisco ballot on Nov. 7, 2006. As we do each election, SPUR has thoroughly analyzed each of them. This year we've also decided to analyze six key state measures. For each measure, our Ballot Analysis Committee invited representatives of both sides of the issues, debated the merits and provided recommendations to the full Board of Directors. The Board then considered each measure. It takes a 60 percent vote of the Board to make a recommendation.
A well-meaning proposition isn't enough to earn an endorsement?it needs to propose a viable fix to a real problem. Ill-considered and politically motivated measures always end up on the ballot, but they don't have to become law.
For each of these eleven measures we asked: is it necessary and appropriate to be on the ballot? Is it practical, and if enacted, will it achieve the result it proposes? And most importantly, we ask if it is a worthy goal, one that will make San Francisco a better place to live for everyone.
CITY Proposition A
SCHOOL IMPROVEMENT BONDS
Proposition A authorizes the San Francisco Board of Education to issue up to $450 million in general-obligation bonds to meet disability-access requirements and health and safety codes, and to rehabilitate the buildings and grounds of 64 schools in the San Francisco Unified School District. There would be a $29.6 million state match, for a total rehabilitation cost of $479.6 million.
Of the costs in the bond, 75 percent will go toward new construction while 25 percent will be spent on soft costs such as architecture, consultants, and engineering1. Of the new construction, 45 percent of that money will be spent to bring the schools into compliance with the Americans with Disabilities Act.
Under state law (Proposition 392) Prop. A needs 55 percent voter approval to pass. It will be paid for by an increase in property taxes of $33 per $100,000 in assessed property value.
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Background
The school board placed Prop. A on the ballot to address the significant deterioration of the district's school facilities and to comply with the federally mandated stipulated settlement in 2004 of the Lopez et al. v. SFUSD, et al. class-action lawsuit, wherein the district agreed to address accessibility deficiencies at 116 district facilities3.
The Lopez decision is, in effect, a compliance lawsuit for the federal Americans with Disabilities Act, with specific agreements and timelines with a federal court on how to make every school in the system ADA compliant. These upgrades are not just for students, but also for teachers, parents and the public using the facilities. Every school will be required to have Braille by the doors; every school would be made accessible to people in wheelchairs or provide for exit in an emergency by disabled people.
Many of these ADA upgrades also require modernization for the facilities to be operable. For example, wider wheelchair-accessible doors trigger new electrical upgrades to buildings, because it is most efficient to also bring the electrical systems to more modern standards while the walls are already being moved.
The Lopez decision identified three groups of schools (approximately 90 total) requiring upgrades. However, only one of those groups of schools (30 total) was included and funded by 2003's identically named Proposition A bond. This is because the 2003 was designed and passed prior to the settlement in 2004. While the district is on target to complete all the upgrades in this initial group of schools, it does not have the funding to finish improvements to the other two groups of schools in time with the strict timeline required in the Lopez settlement. This 2006 bond would provide enough funding to finish the upgrades of another 64 facilities and provide improvements other than the ADA compliance.
If the voters do not pass this bond, the district would be unable to comply with the terms of the stipulated settlement and a federally appointed special master might be appointed to complete the mandated work utilizing whatever funds are available, including the operating funds used to run the schools day to day. In three to four years, the school district will likely need to put forward a separate bond for school modernization, specifically to address those schools not part of the Lopez case.
Prior to 2001, the district had a poor record of performing such repairs. Facilities operations were marked by poor management, lack of financial controls, cost overruns, and fraud. Voter approval of the $295 million 2003 Proposition A School Improvement Bond was a turning point for the district. A bond program manager and project-management staff were hired and an outside, professional bond-program management firm was engaged to play an integral role in the implementation of the bond program.
This school board has a solid record of complying with and completing school projects. As of May 31, the planning and design work for 19 of the 32 schools listed in the 2003 Prop. A bond measure was complete. Among those, 15 projects are under construction or already complete. The Citizens' Bond Oversight Committee set up to monitor the implementation of the measure meets regularly, and the first annual audit of the bond program found that all funds expended to date were spent in accordance with the bond.
Analysis
The 2006 Proposition A addresses deficiencies in four high schools, four middle schools, 31 elementary schools, 13 child-development centers, five county community schools, four charter schools and two administrative facilities. Its funds would repair or replace roofs, heating systems, electrical and plumbing systems, doors and windows, damaged walls, ceilings, floors, restroom fixtures, lockers, drinking fountains, stadium and auditorium seating, and other worn out or damaged facilities. Renovated areas would be painted. In a few schools, a new building might replace temporary bungalows. The work designated for each school is quite specific, but if costs exceed estimates, not all the projects would get done. Because the number of students in the city's public schools is declining, there would be no net increase in the amount of space built as part of this bond.
From the 2006 Prop. A, $15 million would be set aside for the long-promised School of the Arts. While the 2003 Prop. A set aside another $15 million, and $10 million in Federal Emergency Management Agency money has been granted, the current estimate for rehabilitation of the district offices at 135 Van Ness Ave. to house the School of the Arts is in excess of $100 million, leaving a significant amount of funds remaining to be raised from other government and philanthropic sources.
Five million dollars would be used to "green" some of the bleak asphalt and concrete schoolyards and provide environmental education opportunities for children. Elementary schools would have first priority for the "green schoolyards" funding, followed by middle schools and high schools.
It is important to understand that this $450 million bond measure is the second of a multiple-bond program necessary to fund the district's backlog of repair, rehabilitation, renovation and code-compliance work. The board anticipates proposing another bond measure in about four years. The Board of Education's Citizens' Bond Oversight Committee will continue to inform the public of the progress of bond-funded projects. A master facility list is included in the bond measure.
To comply with state law, the measure specifies which schools will be affected and what work will be done at each. Items not in the measure cannot be substituted, and the measure does not guarantee that there will be enough money to perform all the listed work. In addition to annual performance and financial audits, the Board of Education will appoint an independent citizens' oversight committee to inform the public about how the bond monies are being spent. The bonds will be issued for 25 to 30 years and are estimated to cost $33 per year for each $100,000 in assessed value. It is important to note that many San Francisco property owners own homes whose assessed value is much less than its market value because assessed value is based on purchase price (plus additions or remodels).
It is expected that the cost of the bond would be shared between landlords and tenants. Under current law, the drafter of a measure may include language specifying that some or all of a bond can be passed through to tenants. If the language is not inserted into a measure, the default position is that costs may not be passed through for bonds that are sold by the City and County of San Francisco or the school board.
Proposition A's bonds will be sold by the Board of Education of San Francisco, a separate governmental body from the City and County of San Francisco. Because of this distinction, the bond was not initially written to include a pass through to tenants. This required specific language. Recently, legislation was introduced by Supervisor Tom Ammiano that would change the rent-control ordinance to allow landlords to pass through 50 percent of the cost for all City and Board of Education bonds. As of print time, this legislation had not yet passed the full Board of Supervisors, but is unlikely to face any opposition because it was put together specifically as a compromise measure.
Under state Proposition 39, a 55 percent majority of participating voters is needed to pass these bonds. Prior to Prop. 39, a two-thirds majority was required for education bonds.
Pros
Those who support this measure claim:
• The money from the bond would improve the many San Francisco public schools that are unattractive places and that fail to meet basic health, safety and disability-access codes.
• Children need a clean, healthy and safe environment for learning, and the funds from this bond measure would help improve conditions in 62 schools and two administrative facilities throughout the city.
• Providing money for the green-schoolyards program is an important step forward for the city. This program was funded for 17 elementary schools in the 2003 bond. The $5 million in this bond will create additional demonstration projects at 31 elementary schools in every neighborhood and build long-term public support for the concept.
• The current school administration has demonstrated through management of the 2003 bond that it can manage the design and construction of school facilities on time and within budget. The 2003 bond program's independent auditor found that expenditures complied with the intended use of the bond proceeds.
• San Francisco's funds will be augmented by state money. Passage of Prop. A would attract an estimated $29.6 million in state matching funds.
• If we do not pass the bond, we face the possibility of federal takeover of our school system, which could result in significant cuts in all programs exclusively to pay for bringing many schools up to compliance with disability standards.
• Costs for infrastructure improvements increase significantly every year. In recent years, costs have been escalating at 9 percent a year, driven in part by demand for materials and expertise to rebuild after the damage of Hurricane Katrina, rapid economic growth in China and India, and local hospital-modernization laws. Not only are these cost increases accounted for in Prop. A, but if we do not pass the bond this year, the costs also will continue to go up far more quickly than inflation or overall property-tax revenues.
Cons
Opponents of Proposition A claim:
• The school district, not San Francisco's voters, entered into the Lopez settlement and voters should not be responsible for bailing the school district out because it has failed to comply with the terms of that settlement. If the district could not keep to the terms of the agreement with the plaintiffs, it should not have settled the lawsuit the way it did.
• If we are spending significant funds to bring our schools into the 21st century, we should instead put that money into science and computer labs. This bond spends half a billion dollars largely to pay for bathrooms, entryways and related construction work.
Recommendation
SPUR recommends a "Yes" vote on Proposition A. Although we would rather see $450 million go toward modernizing science and computer labs, or other investments that improve the overall outcome of learning for the majority of the student population, not passing this bond poses far greater potential harm to our school system. If we can successfully move beyond the strict timelines and terms of the Lopez settlement, we will be able to make those other needed investments. Passing this bond is the only reasonable way to achieve that goal.
1Definition of Soft Costs: "These costs are related to those items in a project that are necessary to prepare and complete the non-construction needs of the project. Soft costs include such items as architecture, design, engineering, permits, inspections, consultants, environmental studies, and regulatory demands needing approval before construction begins. Soft costs do not include construction, telecommunications, furnishings, fixed equipment, and expenditures for any other permanent components of the project." See: http://www.appa.org/Research/SAM/projectsoftcostindex.cfm
2Note: Prop. 39 reduced the requirement for bond passage from two-thirds to 55 percent for education bonds.
3See: Lopez et al. v. SFUSD, et al., Case No. C 99-3260 SI (EMC)
CITY Proposition B
PARENTAL LEAVE AND TELECONFERENCING FOR PUBLIC OFFICALS
This amendment to San Francisco's City Charter would require the Board of Supervisors to adopt parental-leave policies for supervisors and members of other boards and commissions. These parental-leave policies would include permitting members to attend and vote at public meetings via teleconference. This measure requires the approval of a simple majority of participating voters for passage.
Background
Supervisor Michela Alioto-Pier presented this measure in response to her experience of giving birth while in office, She is the first elected official in the history of the City to give birth while holding office. She was forced to miss several committee and board meetings because there exists no provision for supervisors or commissioners to attend meetings, such as via teleconference, if they are unable to be physically present.
Analysis
Under the current San Francisco charter, a quorum for the board and for commissions is defined as the presence of a majority of its members. Although the word "presence" is not specifically defined in the charter, it has been construed to prohibit electronic attendance.
This measure makes two specific changes in the charter. First, it defines "presence" to include participation by teleconferencing or other electronic means but only when a member is unable to attend in person due to pregnancy, childbirth or related condition. Second, the measure requires the Board of Supervisors to adopt a parental-leave policy that includes allowance for a member of a board or commission to attend meetings electronically if the member is absent in order to care for a child after birth, or after adoption or foster-care placement.
While the charter amendment appears to be a straightforward provision to permit greater flexibility for public officials, it may have unforeseen consequences, particularly as regarding providing notice of and public access to meetings. Under California law, public officials (members of boards and commissions) are permitted to participate in meetings via teleconferencing if the teleconference meeting complies with the standard features of the "Brown Act" for public noticing (state Government Code Section 54953). This requires that "each teleconference location shall be accessible to the public" and that "each teleconference location shall be identified in [a] notice and [an] agenda of the meeting or proceeding [by] the local government." The local government is also compelled to "post agendas at all teleconference locations."4 These legal requirements suggest that an elected official or board member teleconferencing into a meeting would have to open his or her home (or other teleconference location) to the general public. For example, if Alioto-Pier were teleconferencing into a committee meeting from her home, she would have to give notice of the meeting and could not deny access to members of the general public to attempt to watch her as she participates in the meeting. Further, the state code also requires that all open and public meetings comply with the federal Americans with Disabilities Act.
Given these requirements, it is possible that elected officials and members of boards and commissions would make infrequent use of teleconferencing from private locations. This suggests that by making a private place a public one, the measure may not actually solve the very problem that prompted its creation.
Pros
Supporters of this measure claim:
• Under the status quo, women who are elected to office or who serve on commissions are not allowed to fulfill their duties during the time they choose to build a family. Such a restriction disallows a woman from participating in her official duties at a time when she is fully capable intellectually of contributing.
• This change allows full participation by women in the governance of the City. Without this change, the voters lose the participation of their elected representative if she chooses to give birth.
• Although this measure primarily addresses equal opportunity for women in governance, the measure is written without gender bias, and specifically recognizes the importance of family leave - for either a mother or father - whenever a new child enters the home. It is, at its core, a pro-family measure.
• Modern technology makes it relatively simple and inexpensive to participate remotely in important meetings. Such technology is routinely used in all other sectors and is well developed for use by government.
Cons
Opponents of this measure claim:
• This measure is much more narrow in scope than is wise. Electronic meeting attendance should be allowed for any supervisor or commissioner who is unable to attend meetings in person for medical reasons. Limitation of the measure to one condition is discriminatory. The measure should have included a provision to permit attendance due to long-term disability as well.
• The importance of personal interaction at meetings is vital to the public good. It is important for members of the public to be able to speak directly to their representatives, and for decision-makers to interact on equal footing, in person, to reach thoughtful decisions. The role of a public official - either elected or appointed - is ceremonial. Rather than permit the official to vote from a remote location, it might be a wiser and simpler option to delay important votes
• The state law provision to require the teleconference meeting comply with public notice and attendance may result in limited use, if at all. By allowing public attendance at the meeting, it invalidates the original logic behind the measure to permit a mother to participate in a meeting while she is attending to her child in her home or another private location.
• The measure was placed on the ballot by a sitting supervisor who is up for re-election this fall. This provision reinforces the power of incumbency because no challenger in a supervisorial race can directly place a measure on the ballot with only three other signatures from colleagues.
Recommendation
SPUR recommends a "Yes" vote on Prop. B. Although the provision is written more narrowly than we would prefer, it still moves the City toward a more up-to-date practice and addresses an important social issue. While SPUR has taken a strong stance against measures that appear on the ballot in the same election as one of their sponsors, at least this measure was vetted through a process of several months in consultation with members of the City Attorney's Office and members of the Board of Supervisors. Most importantly, we agree with the public policy goals of the measure. We should also note, however, that teleconferencing is unlikely to be used very often given how it triggers public notice requirements and access to the teleconferencing location.
4 See: http://www.leginfo.ca.gov/calaw.html for Government Code. Search for "54953."
CITY Proposition C
SETTING SALARIES OF CERTAIN ELECTED OFFICIALS
This charter amendment would require the Civil Service Commission to set the salary for San Francisco's mayor, city attorney, district attorney, public defender, assessor-recorder, treasurer, and sheriff every five years. To determine the salary for each of these city officials, the commission would calculate the average salary paid to comparable officials in the counties of Alameda, Contra Costa, Marin, San Mateo and Santa Clara. The City would pay this average salary to these elected officials beginning July 1, 2007. In addition to recalculating the average salary every five years, on July 1 of each intervening year, the commission would be required to adjust these salaries to account for inflation, up to 5 percent per year. In any year, the commission could reduce the salaries of these elected officials if the compensation of other City employees is also reduced to achieve cost savings.
The charter amendment was placed on the ballot by a 10-1 vote at the Board of Supervisors. It requires a simple majority to pass.
Background
In the early 1990s, San Francisco moved to full collective bargaining for all employees except the top seven elected officials. Even managers and members of the Board of Supervisors became their own collective bargaining units.
Then in June 30, 1994, a new initiative froze the salaries of these top elected officials ? the mayor, city attorney, district attorney, public defender, assessor-recorder, treasurer, and sheriff at the levels set by the Civil Service Commission. The commission may - but is not required to -increase these salaries each year to account for inflation but not industry trends. Salary increases may not exceed 5 percent in any year. The commission may not reduce salaries. The Civil Service Commission is appointed by and serves at the pleasure of the mayor. Members serve for six-year terms.
Under the existing city charter provision described above, these seven officials have received inflation adjustments of between 2 percent and 5 percent per year, except for the fiscal years that began July 1, 1994 and July 1, 1995.
Analysis
Except for the treasurer, each of the other six elected San Francisco officials currently is paid a salary between 8 percent and 42 percent less than the average of the salaries paid to their respective counterparts in the five comparison counties to be used under Proposition C. In total, the seven elected officials are paid in aggregate 16 percent less than the aggregate of their counterparts in the five comparison counties, and this difference is the same when benefits are included. The sheriffs in surrounding counties receive salaries 42 percent higher on average than in San Francisco.
Most of the San Francisco officials covered by this proposed charter amendment has one or more assistants who are paid substantially more than the respective official. On the other hand, the mayor has three assistants whose salaries are limited to 70 percent of the Mayor's salary.
It should be noted that the measure specifies the "average" of the salaries of five nearby counties. It does not specify whether this average would be the mean (weighted average) or median (the midpoint salary). We presume that they are referring to the mean given the small number of comparable salaries.
Pros
Supporters of this measure claim:
• This is a small financial cost to the city to level the playing field among top executives in our region. If we want to be the center of the region economically, culturally and politically, we should offer the top salaries to continue to attract the top quality individuals. This is also particularly true for the legal positions (city attorney, district attorney) where the City is competing directly with the private legal profession, which pays much higher salaries.
• Using the average compensation for the same elected positions from officials in the surrounding counties compensation is a sound and accepted way of salary setting. It is a method that does not lead to abuse.
• San Francisco is a complex place to govern and in which to work, and our top officials deserve to have respect shown for that work through providing top salaries.
• Each of these seven officials has one or more assistants paid more than the respective official, which seems unfair and could counter the authority of the top position. Conceivably, it could have the perverse effect of inducing the top official to quit and apply to be an assistant.
Cons
Opponents of this measure claim:
• The measure too narrowly focuses on salaries and fails to consider the overall compensation including health benefits, paid time off, retirement-program contributions, and so on. Additionally, the measure ignores long-term retiree pension and health benefits City officials receive. Those benefits are among the state's most generous.
• Setting salaries by reference to an average produces a perpetual upward spiral as each increase tilts up the average.
• The long-term costs to the City may be far greater than the projected first-year cost of approximately $210,000. Not only will the costs increase further each year as average wages in surrounding counties rise, but also with expected "wage creep" in these offices in which staff salaries are sometimes capped at a rate relative to the executive's salary. The proposed salary increases would create pressure to increase the salaries paid to the assistants of these officials.
• While we may need to reform how our citywide elected officials are paid, this ballot measure relinquishes local control to others outside of San Francisco. This proposal gives five other Bay Area counties and their voters control over what our local officials are paid. We would never want to link our health care and other social-service spending, for example, to these other counties in a similar way.
• The measure links San Francisco's elected officers to "similar" positions found in the other counties, despite significant differences in their responsibilities and functions. For example, because San Francisco is both a city and a county, its sheriff's duties do not include patrolling, unlike in the other counties. Therefore, comparison with those counties is not a valid measure of relative job responsibilities.
• These officials hold prestigious positions in a prestigious city and therefore do not need more monetary compensation, nor are they likely to give up those positions for more money.
• The cost of the proposed salary increases could instead go to raising the salaries of other worthy officials within the city based on merit, not title.
Recommendation
SPUR recommends a "Yes" vote on this charter amendment. This is not about costs - the financial impact of this measure is insignificant in a budget of more than $6 billion. Instead, SPUR approached the charter amendment from the perspective of whether this is the right process by which to set the salaries of these public officials, whether the salaries set are appropriate and whether those new salaries are necessary to attract the right people. On all three issues, we think the answer is yes.
CITY Proposition D
NONDISCLOSURE OF PRIVATE INFORMATION
This measure would ban the City from disclosing private information except when specifically authorized by the individual or by contract, or where required by federal or state law or judicial order. "Private information" is defined as "any information that could be used to identify an individual, including without limitation name, address, Social Security number, medical information, financial information, date and location of birth, and names of relative."
An existing section of the San Francisco Administrative Code bars contractors from disclosing or selling private information. Prop. D replaces Chapter 12M of the Administrative Code, "Nondisclosure of Private Information," with a few changes. The existing chapter prohibits contractors from disclosing private information except under three circumstances: if the contract specifically permits it, if the City provides written approval to disclose the information or if the disclosure is authorized by law. The new ordinance adds a provision that prohibits the City from disclosing private information unless three additional circumstances are met: the individual whose information would be disclosed authorizes its disclosure, a contract authorizes the disclosure, or the federal government, the state government or a court of law require its disclosure (with some exceptions).
The new ordinance was placed on the ballot by the signatures of four members of the Board of Supervisors and only requires a simple majority for passage.
Analysis
Many people are concerned about the loss of privacy due to governmental and non-governmental actions. The emergence of software protecting Internet users against spyware reflects growing intrusions from new technologies into people's lives. Further, in the past year, controversies emerged around the commercialization of private information by financial institutions. As companies learn to better target their direct solicitations - often electronically - personal information is in higher demand and increasingly profitable.
Identify theft is also a growing problem. The country suffers $50 billion in losses due to identity theft. In the past year, there have been 43,000 reported instances of identity theft in California and 1,100 cases of identity theft reported to the San Francisco police. Growing concern prompted the San Francisco Civil Grand Jury to investigate city policies with regard to identity theft. However, its report of May 2006 indicated that no identity theft had occurred within the departments surveyed and that current practices would not allow that to happen. In their report, the grand jury focused primarily on the theft of Social Security numbers and credit-card numbers.
San Francisco already collects significant personal data on local residents. Collection points include the Department of Public Health, the Treasurer's Office, the Department of Parking and Traffic and the Controller's Office. Collection by contractors within these departments is currently protected, but similar protections do not exist for private information that the City itself collects. The City could make use of this information for profit. Current policies are silent on the protection of citizens from this possibility. Some companies troll public records to gather information for commercial or political purposes. The City can probably do the same in a more efficient and cost-effective way because it is in control of the infrastructure. San Francisco has also chosen to contract out credit-card processing to nationally recognized firms specializing in Web-based remittance processing, thus minimizing or eliminating identity-theft risks.
The existing Administrative Code section provides for enforcement by the City if a contractor violates Chapter 12M of the Administrative Code. There is no added provision for enforcement against the City by an individual whose personal information has been disclosed.
Although it appears that information that is now a part of the public record would not be affected by this measure, it remains unclear how this would affect information about city employees. For example, some of this information is public record now but might be construed by the measure to become private information.
The measure provides for amendment by the Board of Supervisors by a two-thirds vote, which would allow modification of the measure without another ballot measure. SPUR supports having this modification clause within ballot measures to ensure flexibility to amend such measures to respond to future circumstances.
It is important to note that a simple majority of the Board of Supervisors alone could have added this provision to the Administrative Code. Having it added by a vote of the people may give the provision more weight, but removes the opportunity for public debate and discussion.
Pros
Those who support this measure claim:
• There is a trend in the country toward the selling of private information for a profit. As this information becomes increasingly valuable, it is necessary to put up barriers to prevent our City government from being tempted to sell or reveal private information.
• The incorporation of this measure puts the government squarely in the role of protecting and respecting the privacy of its citizens. It provides additional protections of private information at a time when such information is increasingly in demand by both thieves and private companies looking to target their marketing efforts directly at consumers with specific wants and needs.
• The proposal grows out of grand jury recommendations related to identity theft and thus responds to real needs that have been explored by an independent group of residents.
• This measure will facilitate the greater provision of government services to its citizens by increasing their trust in government. Recipients of City services who fear that the government will turn over their private information would no longer need to hold such fears since the City could not do so under this measure.
Cons
Those who oppose this measure claim:
• This is a complicated measure that has not received full scrutiny and review. There could be many unintended consequences of the passage of this ordinance that have not been assessed. Since this was placed on the ballot without any public hearings, there was no process through which such shortcomings could have been detected and corrected. Providing for amendment by the Board of Supervisors is important, but the supervisors should have debated this measure. Complicated policy decisions with the potential for unintended consequences should go through a public process.
• This measure might inadvertently limit the ability to do substantial investigative research on public officials where the City is in possession of "private information" that is not otherwise considered "public record." Private records might include the addresses of emergency personnel who may not live in the City (as was discovered by a recent article in the San Francisco Chronicle). This issue is worthwhile as a subject of an investigative journalism report that might become outlawed under this ordinance.
• This is a solution seeking a problem, as the Administrative Code already covers contractors and no one has suggested that the City has disclosed private information or has any intention of doing so.
Recommendation
SPUR recommends a "No" vote on this measure. Although there are legitimate concerns about privacy and identity theft facing San Franciscans, it is unclear what problems Prop. D is designed to solve. It is also unclear what the effect of the measure might be. We are somewhat ambivalent about recommending a "No" vote. We do not feel that either SPUR or the voters have enough information to understand this measure, and it appears there might be some unintended consequences that have not been fully investigated. Clearly, the goal of protecting privacy is necessary, but it is not clear if this measure will further that goal in the right way. In general, we believe that attempts to resolve complex modern challenges to privacy and identity theft are best done with rigorous analysis and after healthy public debate. Asking the voters to decide upon a measure so difficult to understand - and asking them to do so without such a debate - is irresponsible and an abuse of the initiative process. It is possible that there are better solutions to the problems of identity theft that could be solved through hearings, discussion and action by the Board of Supervisors.
CITY Proposition E
PARKING TAX
This measure would increase San Francisco's existing gross-receipts tax on parking from 25 percent to 35 percent, and extend the tax to cover valet parking. The measure is a non-dedicated general tax whose proceeds would go entirely to the General Fund, unlike the current tax which has historically dedicated 40 percent to the General Fund, 20 percent to Muni and 20 percent to senior programs. In the proposed Prop. E tax increase, a percentage of the General Fund is allocated to Muni through the Metropolitan Transportation Agency as provided for in 1999's Proposition E.5 As a general tax, Prop. E must be on the ballot for a general election (such as when members of the Board of Supervisors are also up for election). If this were not on the ballot in 2006, the next possible ballot would be 2008. Prop. E requires a simple majority vote to pass.
Background
San Francisco first passed a parking tax of 25 percent in October 1970, with all of the proceeds going to the General Fund. Since then, the tax has varied, with portions of the tax going to specific services. The tax was reduced to 10 percent in 1972. In 1977, the tax was increased to 15 percent, with the additional 5 percent dedicated to senior programs. The tax was increased again in 1980 to 25 percent, with the additional 10 percent going to the City's General Fund.
In 1993, voters passed Proposition M, which rededicated much of the parking tax's revenues. Forty percent went to Muni (now the MTA), 20 percent to senior programs, and 40 percent to the City's General Fund. This allocation remains today.
In 2004, Flying Dutchman, a parking operator, sued the City over the parking tax. The court ruling on the Flying Dutchman case invalidated the allocation to senior programs, which had been implemented after the passage of state Proposition 13, though without the required two-thirds vote, but the ruling left the dedication to the MTA intact. The Flying Dutchman ruling also invalidated the City practice of collecting parking tax on valet operations, as the original text specified that the tax was on parking spaces, rather than parking services. Since 2004, the Board of Supervisors has continued the set-aside for senior programs by budgeting a like amount of General Fund support. Although there has been an agreement that 20 percent of the parking tax revenues would be dedicated to senior programs, that allocation is not legally defensible.
Analysis
The current 25 percent parking tax raised $55.18 million in the 2005-2006 budget year, of which $33.12 million went to the General Fund and $22.06 million went to the MTA. Twenty percent of the total goes to fund senior programs. The City projects that a 35 percent tax would generate approximately $22 million in additional annual revenues. The entirety of these additional revenues would go into the City's General Fund. This is because a dedicated tax requires a two-thirds majority and the proposed tax only requires a simple majority. The only amount of the new tax revenues guaranteed for Muni would be based on Muni's share of General Fund revenues to the MTA per the city charter. And because of the Flying Dutchman case, no amount of money can be dedicated to senior programs.
Despite these limitations, it is expected that the Board of Supervisors will observe the historic 40 percent/40 percent/20 percent split of the new revenues. The board has continued the allocation to senior services despite the Flying Dutchman ruling, and in recent years has allocated greater funding to the MTA from the General Fund than the minimum guaranteed by the charter.
Most large U.S. cities have a parking tax. At 35 percent, San Francisco would have one of the higher tax rates in the United States, although not the highest. The highest known tax is Pittsburgh, which has a 50 percent tax.
There are several ongoing efforts to assess the parking tax on areas other than the traditional public and privately owned parking garages. Until a few years ago, hotel parking paid into neither the parking tax nor the City's hotel tax, but the Treasurer's Office has been working to collect the appropriate tax on hotel parking. Employer-provided parking does not pay the tax, although the treasurer is investigating whether it should do so.
Unlike many San Francisco taxes and fees, the parking tax is shared by residents and non-residents alike. A recent study found, for example, that 62 percent of monthly parkers in city-owned garages downtown reside outside of San Francisco. Increasing this tax could result in these commuters shifting their mode to transit (which would reduce some congestion on the region's roadways).
It is uncertain how the additional parking tax will affect demand for parking and whether parking operators or consumers will bear the increase in costs. If parking demand is inelastic, increasing the parking tax will not result in a reduction of drivers and parking operators will pass all of the parking tax increase on to consumers. If parking demand is elastic, parking demand will decrease as taxes increase. In that case, parking-garage operators would simply bear most of the cost of the increased tax rate in order to not lose further business. It is expected, however, that the elasticity of demand for parking will vary by the type of consumer ? whether resident or non-resident, short-term or commuter.
A study of the effects of San Francisco's alteration of parking tax rates in the 1970s found that commuters were much more sensitive to price increases than were shoppers and recreational users, so an increase in the parking tax might serve to discourage commuter parking to a much greater degree than short-term parking. If we can assume these behavioral changes still apply today, the 62 percent of monthly parkers who are nonresidents would shift away from driving. This reduction in commuter parking could then reduce congestion within the city (and thus increase the speed of Muni service) and free up additional spaces for short-term parking.
In general, however, parking demand and parking rates are more strongly driven by factors such as the amount of parking available and the strength of the downtown job market. Parking rates would likely increase more during a downtown job boom than as a result of a 10 percentage point increase in the tax. Overall, the biggest indicator of demand for parking is the strength of the economy - not the price of parking.
The proposal for a 35 percent parking tax emerged from SPUR's recent paper "Muni's Billion Dollar Problem" (March 2006). In that paper, SPUR called for an increase in the parking tax as one of the solutions to Muni's structural deficit. SPUR made the case that most or all of the new revenue from a parking tax should go to support Muni. SPUR also supports policies that encourage downtown parking to be dedicated primarily to high-turnover visitor parking rather than commuter parking and to reduce the traffic congestion that results in Muni delays. SPUR also supports shifting taxes and fees onto environmentally unsustainable activities, such as congestion and pollution, and away from productive activities, such as housing construction or job creation. In other words, SPUR policy supports taxes on waste, not work.
This is a general tax that requires a vote of the people and must be on a ballot for a general election (such as when the Board of Supervisors is also up for election). If this were not on the ballot in 2006, the next possible ballot would be 2008.
Pros
Those who support this measure claim:
• The parking tax generates needed revenue to the City - up to an additional $22 million per year.
• Past increases in the parking tax encouraged commuters to shift to public transit, which furthered the City's transit-first policy.
• A higher parking tax discourages long-term commuter parking, which frees those parking spaces for short-term parking that supports downtown retail and entertainment uses.
• A parking tax increase discourages commute-period trips and reduces traffic congestion downtown, which improves Muni reliability, decreases Muni costs, and improves air quality and pedestrian and bicycle safety.
• Parking taxes get non-residents to pay their fair share to support San Francisco's roads, public transit and other city services. Past increases in the parking tax encouraged commuters to shift to public transit, which furthered the City's transit-first policy.
• An increase in the parking tax could reduce congestion, which would directly benefit Muni through increasing its speed. A recent study for the Planning Department noted that what is hurting Muni most might be congestion not the cost of providing additional capacity (i.e. seats on the bus). Anything that can be done to reduce congestion is a benefit to Muni. If there are fewer cars on the road, then Muni can run more quickly which results in fewer trips and drivers and thus cost savings.
• The parking tax is a "green tax" that encourages environmentally friendly behavior, discourages congestion and pollution, and shifts the tax burden away from things we want to encourage, such as new housing and job growth.
Cons
Those who oppose this measure claim:
• This measure should have been a dedicated tax that would go directly to Muni. There should be a direct connection between the parking tax and the increase in transit funding. Placing all the money directly into the General Fund undermines the relationship between reducing driving and increasing transit. Given past practices, a maximum of only 40 percent of $22 million would possibly go to Muni (and this is not even required or legally permitted to be required).
• It is unclear exactly how far this tax will be implemented. The current law leaves open the possibility that many more locations will be subject to the tax - such as employee-provided parking or rented parking spaces within apartment buildings.
• Increases in the parking tax could result in a decrease in visitors coming to shop in San Francisco. As we move toward being more of a location for high-end regional shopping (such as the new Bloomingdales) this may negatively affect shopping, and thus sales-tax revenues.
• The new tax may inadvertently reward parking operators who are evading or underpaying the parking tax. Since the existing tax is poorly collected, some operators may simply use the new tax as an excuse to raise their parking rates without ever sending the city any additional revenue.
• This is a punitive tax, since many people cannot take public transit to get to where they need to go. Many of those people may use parking garages for short trips. They will be affected negatively.
Recommendation
SPUR has no position on this measure. Our Board of Directors was unable to reach the 60 percent majority we require to take a "Yes" or "No" stance. While SPUR did call for increasing the parking tax to 35 percent in our March 2006 paper "Muni's Billion Dollar Problem," our policy proposal called for a dedicated tax, not one that simply goes entirely to the General Fund. SPUR believes that the parking tax is generally a benign and environmentally beneficial source of revenue. However, we strongly believe that the parking tax should pay for increases in transit service. Making this a general tax rather than one dedicated to Muni does not meet our standards of how parking taxes should be used. Although a dedicated tax would have required a two-thirds majority and would have been much harder to pass, that would have made the case for the parking tax much clearer. The ordinance has many merits, but the lack of dedicated funding fails to directly tie increasing the costs to automobile drivers and demonstrated improvements in public transit.
5 In 1999, San Francisco voters approved Proposition E, which combined the Municipal Railway (Muni) and the Department of Parking and Traffic (DPT) into a new agency, the MTA. Among the many hoped-for benefits of the merger was the prospect of better management of the city's streets, in keeping with a strengthened "Transit First" policy, which would both improve Muni service and make the streets friendlier to pedestrians and bicyclists.
CITY Proposition F
PAID SICK LEAVE
This initiative ordinance would require employer-financed paid sick leave for all employees in San Francisco. Employees would earn paid sick leave at the rate of one hour for every 30 hours worked after the first three months on the job. Employees who work in businesses with fewer than 10 employees could accumulate up to 40 hours (five days) of paid sick leave per year. Employees at businesses with 10 or more employees could accumulate up to 72 hours (nine days) of paid sick leave per year. Employees who remain at the same business could roll over unused sick leave into subsequent calendar years, up to the maximum accruals. There is no "cash out" upon termination of employment. Unless both parties opt out, it would supersede collective bargaining contracts.
Under the ordinance, paid sick leave could be used for the employee's own physical or mental illness, injury, diagnosis or treatment, or to provide care in case of the employee's child, parent, spouse, sibling, grandparent, grandchild, legal guardian or ward, domestic partner, or any other person designated annually by the employee.
Employers could require employees to give reasonable notification of an absence and could take only reasonable measures to verify that an employee lawfully used paid sick leave. Enforcement would be allowed by the City, an aggrieved individual or any member of the public. Relief could be in the form of back wages, reinstatement and penalties. Employers would have to maintain records documenting hours worked and paid leave taken for up to four years.
If an employer already provides sick leave, vacation time or paid time off greater than or equal to the amounts required in this ordinance, then the employer already is in compliance with this ordinance and does not need to provide any additional sick leave. This is an "equivalency requirement."
This measure requires only a simple majority for passage.
Analysis
In recent years, San Francisco has become a national leader in legislation focused on improving wages and benefits for employees, particularly in low-income industries. This has become more common as incomes have become increasingly polarized and union representation in service industries continues its steady decline (thus limiting labor's ability to increase wages). Previously, unions represented larger segments of the restaurant, hotel, retail and building services (janitorial) industries. Lacking the power to set wages and benefits through industry-wide bargaining agreements, unions recently formed coalitions with community groups to push for changes to local legislation such as living-wage laws for city contractors, minimum-wage laws for all employees, health care benefits for the uninsured and now paid sick leave.
In 2003, San Francisco passed a citywide minimum-wage ordinance that placed the City's minimum wage at $8.50, plus inflation. With that increase, the City's wage floor became $1.75 an hour higher than the State's. The wage is currently $8.82, and applies to all adult and minor employees who work two or more hours per week.
In June of this year, the City passed legislation to provide health benefits to all uninsured people in San Francisco. That measure included numerous public meetings and triggered the writing of an economic-impact assessment prior to its passage.
While the process to develop the health care legislation was not universally praised, Proposition F had virtually no public process. Two weeks before the ballot deadline, the Board of Supervisors held a hearing on the general topic of sick leave. However, no legislation was presented or introduced. The coalition supporting this ordinance also held several meetings with the Chamber of Commerce and the Golden Gate Restaurant Association before placing this measure onto the ballot. Since those meetings were informal and outside of a legislative process, they did not result in substantive changes to the proposed legislation. For example, this sick leave ordinance introduces a new definition of a small business that differs from the one recently adopted within the City's health care legislation. While the health care legislation defined a small business 20 or more employees, this measure defines a small business as 10 or more employees. Enshrining such inconsistencies in law will make it more difficult to provide small-business assistance and develop a comprehensive set of regulations that benefit both workers and businesses.
Despite the lack of an impact assessment in the development of the legislation, the lack of access to paid sick leave is a real and pressing problem. Nationally, 42 percent of all private-sector workers do not have paid sick leave, nearly double the 23 percent who lack paid vacations. Although this number has declined since 2000 (when 47 percent lacked paid sick leave)6, this percentage who lack paid sick leave is higher in many low-wage industries such as food service and retail. As many as three-quarters of workers who receive the bottom quartile of wages lack paid sick leave.7
The sick leave ordinance would increase the cost of labor in San Francisco by approximately 3.3 percent for employers that do not currently provide sick leave or paid vacation. Standard economic theory presumes that as the cost of labor increases, employers will seek to reduce the cost of labor by laying off workers, thus reducing overall employment. In addition to hiring fewer workers, it is possible that employers may choose to not provide pay raises beyond what is required by law or union contract. Because the value of the sick leave increases as an employee's wages increase, for all workers the paid sick leave constitutes in effect pay increase without any related increase in productivity, based on earning one hour paid leave for every 30 worked. For a worker to accrue the maximum benefit of 72 hours, he or she would have to work 40 hours a week for 52 weeks straight. Employers may choose to forgo expected salary increases by instead paying for the sick-leave provision.
Others argue that these cost increases will simply result in businesses closing. As costs go up in restaurants, the customers will spend less when they eat out. This would result in less overall revenue to the restaurants and could lead to the loss of employment at restaurants. Already, 10 percent of restaurants in San Francisco have gone out of business in the past few years. The largest growing segment within the restaurant industry is "fast casual" (that is, counter service), where there are fewer employees. It is expected that these increased costs could provide an additional disincentive to restaurants to provide full sit-down service, given the higher labor costs associated with that service.
Proponents counter these assertions by claiming that many workers will not make use of the maximum number of days, so the total cost could be much less than expected.
The proposed ordinance also attempts circumvent labor agreements. Many building trade unions have taken extra wages in lieu of sick leave. This would affect those contracts and may require the reopening of those contracts to decide whether both sides want to exchange the sick leave for other benefits.
Pros
Those who support this measure claim:
• This measure would improve the quality of the work experience for all workers who otherwise would not receive paid sick leave. All employees deserve a work environment where they go to the doctor or care for a sick child without fear of losing employment or wages. This is particularly true for people with lower wages in industries where they have less bargaining power as employees.
• Increased benefits not only improve employee morale and productivity but also reduce employee turnover, and thus administrative costs to employers. Turnover among workers is costly to employers, as they have to find and then train new workers.
• Time off with pay for employees who are sick or are caring for others will have significant benefits in terms of workers' health outcomes, reducing the spread of illness among coworkers and increasing the likelihood that workers can access preventative care.
• This measure would level the playing field for employers already offering paid time off and thus reduce a competitive cost disadvantage to employers who provide such benefits.
• Some employers take punitive measures when workers take their paid time off. This proposition would impose a penalty on employers who take such measures and could possibly help prevent such punitive actions from happening.
Cons
Those who oppose this measure claim:
• Proposition F does not need to be on the ballot. The Board of Supervisors could enact this legislatively, as it did with recent health care legislation. It is on the ballot to avoid having to compromise with the needs of the restaurant industry as well as with the requirement for an economic impact assessment.
• The number of paid sick days in this measure is arbitrary and does not provide any incentive for workers to stay at any job longer than three months. It is standard practice for most employers with paid sick leave or time off to offer an incentive for workers who remain on the job for more than a year. The ordinance should have been written to provide five sick days for the first year or two and then increase the benefit to a maximum of 10 days.
• Many recent pieces of legislation benefit workers but impose significant costs to businesses. There has yet to be a cumulative impact assessment for all these measures. Instead, each is introduced independent of the others. Prior to enacting one additional measure that imposes such added costs, it would be prudent to study the cumulative impacts.
• Like any measure that increases the costs to employers, this could result in a decrease in employment, particularly in high-labor, low-margin industries such as restaurants and retail. In order to stay in business and comply with both the health care legislation and the paid sick leave ordinance, many employers will simply make do with fewer employees, whether that comes through layoffs or hiring freezes.
• Establishing this sick leave benefit will project a negative message about San Francisco's business climate. San Francisco already is one of the most expensive places in the country for businesses, and a paid sick leave benefit will reinforce the impression that San Francisco is unaccommodating, deterring new businesses from moving to the city.
• The vast majority of San Francisco businesses provide paid sick leave or have a paid time off program. Many others have unofficial leave policies. Local government should not be regulating issues unrelated to workplace safety and base wages, such as vacation and leave policies.
Recommendation
SPUR recommends a "No" vote on this measure. While SPUR supports the idea of workers having paid time off to care for themselves and their families, this measure was brought forward without significant analysis of its impacts and was not drafted to accommodate industry standards. Although it purports to reduce turnover, it would provide no added benefit for workers who remain at the same job because it would never increase the accrual rate of sick leave. Further, in recent months and years there have been several new policies that collectively place a significant added financial burden on employers (such as citywide minimum wage and health care requirements). While these measures will improve the quality of the work environment for employees, there has not yet been any assessment of the cumulative economic impact of these measures both on employers and the city's overall economy. It would have been prudent to assess these cumulative impacts prior to bringing forth so many measures at once. Finally, this particular sick leave measure does not need to be before the voters. It should have been introduced at the Board of Supervisors and should have been subject to committee hearings, debate, compromise and action by the full board. As San Francisco continues to chart new policy territory in economic and social policy, it is incumbent on the proponents of new legislation to provide a thorough review and analysis in the legislative process.
6 See www.bls.gov. go to "Wages, Earning and Benefits" and search for "Percent of All Workers with Access to Paid Sick Leave."
7See graph on page 12 in http://www.iwpr.org/pdf/B242.pdf.
CITY Proposition G
CONDITIONAL USE FOR ALL FORMULA RETAIL IN NC DISTRICTS
The measure would require any "formula retail use" (as defined by the San Francisco Planning Code) desiring to locate in any neighborhood commercial (NC) district to obtain a conditional-use permit prior to starting a business. A conditional-use permit request is granted or denied by the Planning Commission and requires a public hearing. Granting the conditional use is discretionary, which means the Planning Commission is not required to grant the request. This measure requires only a simple majority to pass.
Background
In 2004, the Board of Supervisors enacted legislation governing the location and planning-approvals process for formula retail businesses. Under this existing ordinance, any time there is a change of use from one type of business to another (such as from a clothing store to a restaurant) within a neighborhood commercial district, and where the new business is a formula retail business, this triggers a review by the Planning Department for consistency with the Planning Code and any adopted neighborhood design guidelines. This measure also requires notification to nearby property owners in the NC district, as well as to occupants and neighborhood groups that have requested to be notified. It also requires on-site posting regarding the proposed application. Any opponents of the application have 30 days to request that the Planning Commission review the application under its discretionary-review authority. These provisions do not exist in circumstances where there is not a change of use, such as when a local coffee shop closes and a Starbucks wants to open in the same location.
Neighborhood commercial districts include all the major commercial corridors in the city such as Valencia Street, Irving Street, Geary Boulevard, Polk Street, Chestnut Street and Castro Street. There are no NC districts downtown.
Following that citywide legislation, other supervisors introduced new measures for specific neighborhoods, such as outright bans on formula retail in North Beach and Hayes Valley, and classifying all formula retail as a conditional use in the Upper Haight, along Divisadero Street between Haight and Turk streets, in western SOMA, and around Cole and Carl streets and Parnassus and Stanyan streets. A future zone requiring CU is being considered for the Showplace Square/Potrero Hill/Central Waterfront area. In each of these cases, the district Supervisor brought forth legislation at the Board of Supervisors and received support from colleagues that resulted in either the outright ban on formula retail or the CU requirement. The current legislation appears to be working as intended and there have not been any circumstances in which a supervisor who sought to impose a CU requirement has not been successful.
Analysis
The proposed ballot measure is an amendment to the Planning Code that would extend the conditional-use requirement for "formula retail uses" to all NC districts citywide. It would leave in place the requirement for neighborhood notification and the potential for opponents to request a discretionary-review hearing. In essence, it would extend the conditional-use requirement that exists in the Upper Haight and several other streets to cover all NC districts in the city.
The existing ordinance defines "formula retail use" as one in which there are 11 or more stores in the United States that maintain two or more of the following features: "a standardized array of merchandise, a standardized facade, a standardized decor and color scheme, a uniform apparel, standardized signage, a trademark or a servicemark." The ordinance defines each of these features as follows:
(1) Standardized array of merchandise shall be defined as 50 percent or more of in-stock merchandise from a single distributor bearing uniform markings.
(2) Trademark shall be defined as a word, phrase, symbol or design, or a combination of words, phrases, symbols or designs that identifies and distinguishes the source of the goods from one party from those of others.
(3) Servicemark shall be defined as word, phrase, symbol or design, or a combination of words, phrases, symbols or designs that identifies and distinguishes the source of a service from one party from those of others.
(4) Decor shall be defined as the style of interior finishings, which may include but is not limited to, style of furniture, wallcoverings or permanent fixtures.
(5) Color Scheme shall be defined as selection of colors used throughout, such as on the furnishings, permanent fixtures, and wallcoverings, or as used on the facade.
(6) Facade shall be defined as the face or front of a building, including awnings, looking onto a street or an open space.
(7) Uniform Apparel shall be defined as standardized items of clothing including but not limited to standardized aprons, pants, shirts, smocks or dresses, hat, and pins (other than name tags) as well as standardized colors of clothing.
(8) Signage shall be defined as business sign pursuant to Section 602.3 of the Planning Code. "Retail sales activity or retail sales establishment" shall include the following uses, as defined in Article 7 of this code: "bar," "drive-up facility," "eating and drinking use," "liquor store," "restaurant, large fast-food," "restaurant, small self-service," "restaurant, full-service," "sales and service, other retail," "sales and service, retail," "movie theatre," "video store," "amusement and game arcade," and "take-out food."
The broad definition of formula retail captures a large number of businesses that currently exist within San Francisco's neighborhoods and may inadvertently result in a decrease in neighborhood services. For example, under this proposed law, if a local supermarket shuts down, this ordinance would prevent the neighborhood from getting a new supermarket for months, if not years. Recently, Supervisor Elsbernd introduced legislation to remove supermarkets from the definition of formula retail.
Unlike many other cities, most of San Francisco has a wide diversity of local businesses and a limited number of national and international chains. However, in particular neighborhoods that are struggling to receive investment, chain stores are often the only businesses that are willing to take financial risks and make new investments. By applying the conditional-use requirement citywide, this measure will place the same burden on all neighborhoods regardless of their local economic needs. It is also possible that the citywide CU requirement could be used by elected officials as a negotiating tool with future chains - by making the claim that their district is one of the only places where they can make it through the CU process due to the lack of opposition.
In addition to regular criteria required by the Planning Commission for all conditional-use requests, the existing ordinance requires the Planning Commission to apply the following additional criteria:
(A) The existing concentrations of formula retail uses within the Neighborhood Commercial District.
(B) The availability of other similar retail uses within the Neighborhood Commercial District.
(C) The compatibility of the proposed formula retail use with the existing architectural and aesthetic character of the Neighborhood Commercial District.
(D) The existing retail vacancy rates within the Neighborhood Commercial District.
(E) The existing mix of Citywide-serving retail uses and neighborhood-serving retail uses within the Neighborhood Commercial District.
The measure was placed on the ballot without any public hearings, public process or review of the measure. It was within the power of the Board of Supervisors to adopt this proposal without going to the voters. There is no provision in the measure to allow the Board to revise the legislation in the future with a two-thirds vote (as some other recent ordinance-level ballot measures have included). This might prevent a future Board of Supervisors from changing the aspects of the underlying ordinance, such as the definition of formula retail including small businesses with as few as 11 stores.
Pros
Those who support this measure claim:
• San Francisco's distinctive aesthetic character is one of our most important assets, but it will be lost if chain stores take over our neighborhoods. Nationwide, there is a growing loss of uniqueness among communities as each city has a nearly identical set of cultural icons, signs and shops. If our city offers the same stores and shops as all other cities in the country, we may lose a part of what draws people to our city as visitors and residents.
• Competitive pressures from formula retail and chain stores often put small businesses out of business. Chain stores are better able to tightly control their supply chains, pushing down purchase prices, and often use regional warehouses to bring new products to their stores more quickly than smaller stores that have to rely on individual orders. These economic advantages to chain stores make it difficult for smaller businesses to compete. The more chains that come in, the greater the threats to small, mostly locally owned business.
• Chain stores provide fewer local economic benefits than locally owned stores, which tends to keep money within the local economy more (by greater use of local vendors and by keeping profits local).
• The existing ordinance places the burden on residents to petition the Planning Commission to exercise its discretionary-review powers. This measure would shift the burden on to the chain store to establish that it is appropriate for the neighborhood. Neighbors would have the opportunity to be proactive in participating in the location decision.
• Chain stores are different from other types of stores and have the resources to go through a conditional-use process to establish that they will not have a detrimental effects on the neighborhood. Many chains and formula retail businesses are part of larger, sometimes multinational corporations, which exert disproportionate power upon the state and local communities.
Cons
Those who oppose this measure claim:
• This measure wipes out neighborhood choice regarding chain stores and imposes a citywide, uniform set of rules. Until now, all legislation about chain stores has been done one neighborhood at a time, respecting the distinct problems of each shopping street. This measure imposes a one-size-fits-all template over the entire city. As written, there is no way to opt out - except, perhaps, to rezone the area to take it out of an NC district. This may be a particular concern for lower-income neighborhoods that are struggling to bring in any type of business.
• This is another example of ballot-box planning - asking the voters to weigh in on a citywide land-use rule change that would be best solved through real community planning processes. When measures such as this are enacted at the ballot, there is no opportunity for debate or compromise, no space for nuance and no ability to fix mistakes later. Ballot-box planning means that the policy is locked in place by the voters and cannot be amended by either the Planning Commission or the Board of Supervisors.
• This type of measure will clog up the Planning Commission with conditional-use hearings, even in neighborhoods where there is no opposition to the formula retail. That is costly for the city.
• This measure will stop successful small businesses in their tracks. Any business that reaches 10 stores will be effectively cut off from growing further in San Francisco - just when it's becoming successful. Many of these businesses are small, run by families and do not have the resources to endure the conditional-use process. This would prevent the growth of innovative, socially responsible firms such as American Apparel as well as successful homegrown companies such as the San Francisco Soup Company or Martha Brothers Coffee. Other local businesses, such as Squat and Gobble, are soon to have five stores - all in San Francisco. If they were to grow up to 10 stores, this law would effectively halt their continued growth in San Francisco and force them into the same restrictive process as an international chain such as Starbucks, Blockbuster or Pizza Hut.
• The measure would impede the growth of such locally owned and locally started businesses from becoming much larger, locally owned headquarter firms such as Jamba Juice, Williams Sonoma or The Gap. All of those businesses began as neighborhood shops but have grown to become large firms with many high-paying, export-oriented local jobs.
• This measure does nothing to help small businesses. Instead, it tips the balance toward wealthier chains with thousands of stores that can wait out the slow process of getting approvals. Most landlords would be unwilling to rent to a local store that happens to have more than 10 stores for fear it would not make it through the conditional-use process. But landlords might be more willing to work with the large chain stores that can afford to sign a contract before all operational approvals are granted.
• The Board of Supervisors has been successful in passing legislation that increased the burden on formula retail. This legislation should also have gone through the Board of Supervisors process.
• This reduces the ability of the Planning Department to do its basic mission of planning. Planning should be done in a flexible way that allows for neighborhood variety and diversity. Whenever there are more requirements, it becomes more difficult for the planning staff to provide what is best for each neighborhood based on its specific context.
• This ordinance is a case of the supervisors with existing controls in their districts trying to force it on other districts, a position that belies the ongoing support for district elections and the importance of allowing residents of each district to decide matters in their district. If citywide voters place new burdens for formula retail in all neighborhood commercial districts, a district that is open to chain stores or formula retail may not ever get such businesses.
• The conditional-use requirement triggers the California Environmental Quality Act, which can make the process much longer than the three months claimed by the proponents.
Recommendation
SPUR recommends a "No" vote on Prop. G. We recognize that San Francisco's local small-business sector is vital to our economic health and that our neighborhoods should retain their distinct character. But this measure goes too far and applies a citywide rule to what really is a local decision. The existing ordinance allows local supervisors to propose the conditional-use requirement on a neighborhood-by-neighborhood basis. That process permits each neighborhood to decide what is best for itself. We also think that the definition of formula retail in this measure casts the net too wide and hurts small businesses just as they are becoming successful. Calling any business with more than 10 locations "formula retail" sets the threshold too low and may inadvertently tilt the playing field in favor of the largest of formula retail businesses because they are the ones with greater resources to endure the longer process. Lastly, because this is a ballot measure and not legislation at the Board of Supervisors, it can be amended only by a vote of the people. That form of ballot-box planning leaves no room for modification or compromise or changing the rules under different circumstances.
CITY Proposition H
RELOCATION BENEFITS
Proposition H would provide additional relocation benefits to eligible tenants who are evicted in a "no-fault eviction." No-fault evictions are when a landlord evicts a tenant for reasons that are not the tenant's fault. Examples include the owner moving in to the unit, the need to undertake substantial rehabilitation of or capital improvements to the unit, demolition of the unit, or permanently removing the unit from rental use under the provisions of the state law known as the Ellis Act.
Current law requires $1,000 in relocation benefits per eligible tenant for several types of no-fault evictions. The proposed ordinance increases relocation benefits to $4,500 per eligible tenant (up to a maximum of $13,500 per unit). It also provides a new additional benefit to seniors, the disabled or households with children: $3,000 per tenant, with no limit on the number of eligible tenants. For each eligible tenant receiving $4,500, 50 percent must be paid when the eviction notice is served and the other 50 percent when the unit is vacated. The legislation proposes that all benefits be annually adjusted in accordance with regional urban residential housing indexes provided by the U.S. Department of Labor.
Additionally, the measure adds relocation benefits for three categories of no-fault evictions that do not currently require relocation benefits:
(1) Demolition or permanently removing the rental unit from housing use
(2) Capital improvements
(3) Substantial rehabilitation
For the purposes of this measure, an "eligible tenant" is defined as someone who has occupied his or her rental unit for 12 months ore more. "Disabled" means a person with a disability, as defined by California Government Code as someone with "chronic or episodic conditions such as HIV/AIDS, hepatitis, epilepsy, seizure disorder, diabetes, clinical depression, bipolar disorder, multiple sclerosis and heart disease."8
The legislation contains a retroactive clause that anticipates the passage of the legislation in November. The effective date of the legislation is Aug. 10, 2006, the date this proposition was placed on the ballot. This measure requires only a simple majority for passage.
Background
The current tenant benefit for an owner move-in-evictions and capital improvements were set between 8 and 20 years ago. There have been no new adjustments since these benefits were first established.
An earlier form of this legislation was sponsored by Supervisor Matt Gonzalez more than two years ago. After Gonzalez left office, Supervisor Tom Ammiano chose to sponsor the legislation, although it never received enough votes to leave committee. The current measure before the voters was placed on the ballot with the signatures of four supervisors, although eight supervisors now have endorsed the measure.
San Francisco is one of the most expensive rental markets in the country. Although rents have flattened in recent years, they are beginning to climb again as the San Francisco economy recovers. Rental units make up almost two-thirds of the housing stock in San Francisco, creating a stark contrast with the national housing picture, where 60 percent of households are homeowners. Over the past decade there have been a number of ballot measures that have successfully asserted the rights of tenants. These include restrictions on owner move-in evictions, restrictions on passing through the costs associated with new taxes or bond repayments to tenants, limitations of rent increases per year on allowable pass-throughs, expansion of the protected-tenant status and limitations on condominium conversions. Supporters of these measures assert that tenant protections help preserve affordable housing without government subsidy and protect low-income renters who are being priced out of San Francisco.
The high cost of housing has many consequences for the overall diversity of San Francisco - Additionally, according to data from the U.S. Census Department's American Community Survey, 75 percent of people who are evicted relocate out of the city9 and particularly its racial and economic diversity. For example, over the past five years there has been a significant drop in the proportion of African-Americans living in San Francisco. Given that the high cost of housing provides an incentive to transition rental units to ownership units, many argue that tenant protections help to prevent or slow the loss of San Francisco's economic and racial diversity.
Since the late 1990s, the number of Ellis Act applications has steadily increased. The Ellis Act creates a legal mechanism that enables owners of rental property to withdraw their properties from the rental housing market by asserting that they are "going out of business." Under the Ellis Act, the property owner must then evict all tenants from the development and may not re-rent the units for five years after the eviction, unless the units are rented at the same price as that offered prior to the Ellis Act evictions. Since the Ellis Act was enacted, San Francisco has seen an increase in Ellis Act evictions leading to tenancy-in-common ownership conversions. Tenant-rights advocates have raised concerns that the overall number of rental units available in the city has continued to decline due to the fact that TICs provide a loophole to enable rental housing to convert to ownership housing. Additionally, due to a variety of factors, the vast majority of newly constructed units are ownership units, not rental units.
Analysis
The proposed ordinance confronts the rising number of evictions and the impact of high housing costs by increasing the cost to landlords for no-fault evictions and the benefit earned by tenants. However, the calculation for the benefit amount is not based on a consistent or clear methodology and is not tied to the actual cost of relocation. Although relocation benefits have not been adjusted for a number of years and may be undervalued, this measure ties the calculation of the relocation benefit to the average rent burden for a market-rate replacement unit in San Francisco. Proponents of this measure argue that move-in costs to a new unit often exceed $6,000, not including moving costs (because of the cost of first and last months' rent, and a security deposit). They also argue that relocation benefits being proposed should not be tied to the number of bedrooms in the unit but to the number of tenants in the unit. However, this particular formula does not resemble traditionally accepted formulas of calculating relocation expenses that take into account unit size and the distance between the old unit and the relocation unit.
Further, the increase in relocation benefits proposed in this measure is not means tested, meaning that increases in relocation benefits are provided both to those who can afford to relocate and those who cannot. The size of the relocation benefits presumes that tenants have little savings and cannot afford the relocation costs for an average San Francisco apartment. Some argue that implementing a fair means test would be very difficult, if not impossible.
Pros
Those who support this measure claim:
• Tenants who are evicted are forced to move through no fault of their own and therefore deserve some compensation to mitigate the negative impact of their evictions.
• For many tenants, the costs of relocation are extremely high. Landlords typically require first month's rent, last month's rent and a security deposit before occupancy. For an apartment renting for $1,800, the move-in cost at a new apartment would be $4,400, not including the actual costs of moving. In addition, prior landlords have 21 days to return the deposit. Relocation benefits provide evicted tenants with the resources they need to secure a new apartment.
• Relocation benefits help protect vulnerable tenants from homelessness. In a hot housing market, if tenants are unable to find new housing, they are at risk of becoming homeless.
• Relocation benefits reduce the incentive for owners to use the Ellis Act to evict tenants in order to convert buildings to TICs, thereby protecting the city's rental-housing stock.
• In relation to the total cost of buying a new unit of housing, the additional amount of relocation benefits is a relatively small amount of money - whether it is borne by the seller or the buyer.
Cons
Those who oppose this measure claim:
• This provision would increase the cost of entry-level home ownership. Due to the fact that San Francisco does not encourage the construction of new ownership housing, converting existing rental units to ownership through the use of TICs is one option for providing relatively affordable ownership housing.
• The relocation benefits provided by this measure are not tied to the real cost of moving. Instead, they are set by an inflexible formula that assigns benefits based on the number of tenants being evicted and not the number of bedrooms in the unit from which the household is being evicted.
• The amount of the increase in benefits proposed by this ordinance far outweighs the increases in the consumer price index since the time the original relocation-benefit measures were passed.
• Relocation benefits should be provided to those who are the most economically vulnerable, not to any renter regardless of income. This measure does not include any means testing.
• Owners might try to avoid paying relocation benefits by keeping units vacant prior to selling their buildings, thus reducing the number of rental units on the market and thereby increasing the price of rental housing citywide.
• By characterizing families with children as a protected class along with seniors and the disabled, San Francisco is charting new territory. It is unclear what the implications of creating a new protected class would be. This could result in landlords not renting to families.
Recommendation
SPUR recommends a "No" vote on Prop. H. The Board of Supervisors had more than two years to take action on this measure but chose not to do so. Using the ballot box as a means to pass this legislation now is an inappropriate use of the ballot process. Some feel that the supervisorial endorsements for this measure constitute political posturing by some supervisors to gain favor with their constituents, allowing supervisors to support the measure without having to take responsibility for actually passing it through normal legislative means.
SPUR is also concerned about the methodology for calculating relocation benefits and the potential for over-subsidizing certain recipients. The relocation benefit does not take into account the financial situation of an evicted family or household. Some households could see relocation benefits of up to $30,000, an amount that far outweighs the real costs of relocation. This is because there is no limit to the number of eligible tenants receiving relocation benefits who are seniors or disabled, or who reside in a household with a child younger than 18.
Although SPUR believes there is a need to update and increase the City's existing relocation-benefit requirements, we feel this measure employs a faulty methodology that creates far-reaching consequences that could ultimately prove to be detrimental to San Francisco.
The real question we are facing as voters is about whether the amounts of relocation benefits laid out in this ordinance are reasonable. Our analysis is that by assessing relocation costs per tenant, as opposed to per unit, benefits potentially add up to far more than the real costs of moving. This measure would impose excessive costs on new homeowners and goes too far. Some would say that it is necessary to impose these excessive costs to reduce the incentive for speculation and evictions. But simply increasing relocation benefits does not solve the basic problem of competition between tenants and would-be owners (which is based on an imbalance between housing supply and demand). This measure sets those relocation benefits too high.
8See State of California Government Code 12926.1. http://www.leginfo.ca.gov/calaw.html
9The American Community Survey is an annual survey that will be replacing the Census long form.
CITY Proposition I
MAYOR'S APPEARANCE AT BOARD OF SUPERVISORS
The measure is a very brief, non-binding policy statement that reads, in its entirety, "It is the policy of the voters of San Francisco that the Mayor should appear in person at one regularly-scheduled meeting of the Board of Supervisors each month to engage in formal policy discussions with members of the Board." Under the current city charter, the mayor is allowed, but not required, to appear before the Board of Supervisors. If the measure passed, it still would not require the mayor to appear before the Board of Supervisors because the measure does not have the force of law. This measure requires only a simple majority to pass.
Background
This measure was originally drafted as a binding charter amendment requiring the mayor to appear before the Board of Supervisors, but failed to gain the required six votes to go on the ballot as a charter amendment. Four supervisors then put forward the current version as a non-binding policy statement focusing on a "formal policy discussion." Policy statements and ordinances require four signatures of the supervisors to be placed on the ballot.
Analysis
The measure is modeled after the British tradition of "question time," during which the prime minister appears before the House of Commons and answers questions. At least six other countries have similar systems, including Canada and South Korea.
The actual length, content and character of the "policy discussion" is not described in the proposed ballot measure, although proponents have suggested that it could take the form of 10 minutes per supervisor (with roughly half the supervisors having an opportunity to speak per monthly session) or a one- or two-hour session overall. There is nothing in the measure that would limit the amount of time the mayor should appear and who would set the terms of discussion. It is likely that the president of the Board of Supervisors would preside over the meeting.
Supporters of the measure present it on its face as a measure intended to increase accountability, or "sunshine," in local government by allowing our two elected branches of government to question each other - or discuss in consensus, if they prefer - in public. Detractors believe that it is little more than an attempt to create opportunities for board members (or, conversely, the mayor) to score political "gotcha" points against each other. Further, detractors argue that the mayor is accessible to the board in many other ways (such as the location of the mayor's office just around the corner from all the supervisors' offices). If the supervisors are seeking productive dialogue with the mayor, opponents say, they should simply head down the hall to meet with him.
Supporters of the measure also may have advanced it out of frustration with the failure of Congress (and national media sources) to thoroughly question President George W. Bush before the Iraq war and to advance dissenting viewpoints. Opponents of the measure would argue that San Francisco's local politics are not troubled by the same lack of accountability, and that in any case applying this solution at the local level does little to affect federal procedures or national news.
Past mayors have occasionally appeared the Board of Supervisors, including Willie Brown, who appeared at a committee of the board. The current mayor has yet to appear before either the full board or one of its committees. While there may have been instances when the current mayor should have appeared before the board, SPUR believes that each measure should be evaluated on its policy merits without regard to the specific personalities of today. Although this measure is a non-binding policy statement, it does set forward a policy position for how the two elected bodies in San Francisco should communicate monthly. In this particular measure, the question should not be whether we want Gavin Newsom to be held accountable for his actions by the current group of supervisors. Instead, we should ask whether city laws should be amended to encourage whoever holds the office of mayor to appear before the board.
Pros
Those who support this measure claim:
• The measure increases accountability for elected officials by creating the opportunity for tough questions to be asked in a public forum where evasion would be obvious.
• Opportunities to hear from our local elected officials are almost entirely filtered through various media that may have their own axes to grind. Being able to hear directly from officials is a valuable means of communication for the public as well as the board and the mayor. This measure would strengthen the public awareness of their elected officials.
• The general nature of the provision leaves room to evolve a style of discussion that is workable for each mayor and board, and the public.
• The measure is neutral as to who will be able to take more advantage of it politically. It is just as likely that the appearance before the board will make the board members appear unprepared as it is that the mayor will be put on the defensive.
• California and San Francisco are often leaders in public policy innovations such as ranked-choice voting and consumer protection. This increase in democratic accountability is intended to be a template for a necessary national movement for greater transparency and accountability in government.
• The current mayor does not consult the board frequently enough on policy issues. This measure would encourage such consultation and dialogue.
Cons
Those who oppose this measure claim:
• The measure does little other than make a spectacle of our local politicians. The current British "question time" is filled with catcalls, boos and irrelevant speeches. Given the current level of discourse among and between the mayor and the board this attempt in San Francisco would be the same or worse.
• Although it is not clear from the measure, presumably the president of the Board of Supervisors would control the discussion, thus being able to embarrass or gavel-down the mayor at will. This would permit the opportunity for grandstanding and for members of the Board of Supervisors to directly attack the mayor. It could also result in various politicians ganging up on another. This could also lead to greater polarization among the board and the mayor as supervisors try to push the mayor into a corner.
• To the extent there is a communication problem between the board and the mayor, this measure (even if it were an enforceable charter amendment) would not fix it. The ability of the mayor and supervisors to communicate depends on the personalities and politics of the individuals. If the personalities and politics do not line up, "question time" will only further divide the players.
• As written, this measure sets no limit to the length of the policy discussion, thus creating the possibility that the question time could be quite extensive until critics of any particular politician have their say.
• Other areas that use this system have a parliamentary democracy, where the prime minister is elected from within (and by) Parliament, unlike San Francisco, where the mayor and board are elected separately. Forcing them to interact this way violates the separation of powers and duties of our executive and legislative branches.
Recommendation
SPUR recommends a "No" vote on Prop. I. Although Although it is important to hold our elected officials accountable to the public, the temptation will be to turn the discussion into political theater, with great risks to our overall city discourse. We are increasingly polarized on many issues that must be solved through rigorous debate and examination of the issues. Unfortunately, a monthly requirement to appear before the board does not constitute rigorous public debate, as there are no provisions in the measure to limit or define the scope of the discussion. Further, SPUR does not support increasing such requirements on elected officials who should be able to work together on their own. Prop. I gives the appearance of sunshine while ultimately clouding the more important effect that our elected officials might replace substantive policy making with political posturing. There are many more important issues facing San Francisco. Preparing for and organizing this "question time" event will diminish our ability to adequately work together on those issues.
CITY Proposition J
IMPEACHMENT OF BUSH AND CHENEY
Proposition J is a policy statement calling for "the impeachment of President George W. Bush and Vice President Richard B. Cheney." The measure lists several reasons why the president and vice president should be impeached, including the abuse of power in relation to illegal electronic surveillance, the detention of citizens and non-citizens, the use of torture, the disregarding of his duty regarding the impact of Hurricane Katrina, and the abuse of executive power. This measure is a non-binding resolution that requires a simple majority for passage.
ANAYLSIS
It is already San Francisco policy to call for impeachment. In February 2006, the board passed a resolution with a vote of 7-3 "calling for a full investigation, impeachment or resignation of President George W. Bush and Vice President Richard B. Cheney." The measure was not signed by the mayor but became law when he did not veto it within the required period of time.10 The current measure before the voters differs primarily in that it specifies as a goal the "removal from office" of the president and vice president.
Similar measures have been adopted or proposed in other localities, including the Vermont communities of Newfane, Brookfield, Dummerston, Marlboro and Putney, as well as Arcata and Santa Cruz in California. This November, Berkeley voters will decide on a similar measure. Th
