SPUR VOTER GUIDE
NOVEMBER 2008

Released
October 2, 2008
Contact
Egon Terplan, Economic Development and Governance Policy Director
415-781-8726 x131, eterplan@spur.org

Authorizes the release of $9.95 billion in bonds for the construction of a high-speed train system in California.

What it does

Proposition 1A, the "Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century," would authorize the California High Speed Rail Authority to issue $9.95 billion in bonds to construct a statewide high-speed train system. It would set aside $950 million of the potential bond proceeds for capital improvements to intercity and commuter rail lines and urban rail systems, to provide connectivity to the high-speed train system.

California high-speed trains would employ electrically powered, high-speed, steel wheel on steel rail technology. The California High Speed Rail Authority chose this technology from among others it considered prior to 2002, including "maglev" technology. The proposed high-speed trains would have the advantage of being useful for high-speed service as well as for lower-speed service on the high-speed tracks or on any regional or local system powered by electric overhead wires. The trains would be capable of speeds up to 220 mph because of a combination of design details in both the trains themselves and the paths on which they would operate. For instance, the course of the tracks would make very wide turns, would be "grade separated" to minimize the places where the tracks would intersect with other surface transportation and would have very slight changes in elevation, while the rails themselves would be "continuously welded" to provide a smooth, even surface for the wheels. The trains would have lightweight electric motors and in-cab signaling, among other features.

In most of the Central Valley, the alignment of the system would be relatively simple due to the flat terrain, straight lines and rural character along most of the route. In mountainous areas, extensive and costly tunneling would be required to achieve the conditions necessary for the speeds proposed. In urban areas, costly measures also would be required to completely separate the train tracks from crossing roads. Usually this means the trains would be built in trenches that other roads will cross on bridges, but it could also mean building the tracks on elevated platforms.

The system is projected to cost from $30 billion to $40 billion. It would be financed by the $9 billion provided by this bond, plus expected contributions from the federal government and private investors. Public partnerships with private investors represent the typical model for developing high-speed train systems elsewhere in the world. In this model, private companies provide most of the capital to build the system in exchange for a negotiated share of the revenue from operating the system. California's proposal requires revenues from the system to be reinvested in expanding the system.

No more than 10 percent of the bond funds could be used for administration, planning, and preliminary engineering. The network would be built in segments, with segments that require the least amount of bond funds relative to the total cost of the segment given first priority for construction. The CHSRA may not begin construction on any segment until a full funding plan is in place. While no segment would get a legal preference, the necessity of private participation in funding means that the first segments to be built would be those most likely to be profitable: heavily traveled corridors where train travel is competitive with automobile or airplane travel. Trains would be an attractive option for commuters in the Altamont corridor, for example, where more growth is expected to worsen already severe highway congestion, and in and around Los Angeles. Another likely profitable segment would be the major link between San Francisco and Los Angeles, where a downtown to downtown trip on the train would take about two hours and 40 minutes, the same as a flight (considering airport access times and security delays) but much more comfortable.

The details of the proposed system are spelled out in the statewide program environmental impact report/environmental impact statement in November 2005. The EIR/EIS demonstrated the feasibility and profitability of the Los Angeles-to-San Francisco route. With trains using one-third of the energy of cars and one-fifth the energy of airplanes, per passenger, California's trains would save 22 billion barrels of oil per year and reduce greenhouse gas emissions by an amount equivalent to removing 1 million vehicles (about one in 30 cars now in operation) from California's roads. In the report predicted that in 2030, with 14 million more Californians than today, California's trains would obviate the need for 2,970 lane miles of highways, 91 airport gates and five airport runways.

This summer, the CHSRA also certified the EIR/EIS for the alignment of the system between the Central Valley and the Bay Area. It looked at two main choices for routing the trains from the Central Valley to the Bay Area: through the Pacheco Pass south of San Jose and through the Altamont Pass parallel to Interstate Highway 580—and essentially chose both, opting for the Pacheco Pass as the main route for trains between San Francisco and Los Angeles, and the Altamont Pass for feeder services.

Why it is on the ballot

Since the TGV, or Train a Grande Vitesse, debuted between Lyon and Paris in 1981, the use of fast passenger trains capable of speeds faster than 200 mph has become very common throughout the world, especially in western Europe and eastern Asia. The United States, on the other hand, has relied on air travel and the interstate highway system for intercity travel, with the partial exception of Amtrak's moderate-speed service in the northeast corridor. Interest in high-speed rail has grown here, however, as policy makers have contemplated high-speed systems variously in Texas, Florida, California and Illinois. None will be as far along as California's proposal if voters approve the bond measure on this November's ballot.

The California High Speed Rail Authority was created in 1996 and charged with developing California's high-speed rail system. It produced a business plan in 2000 that led to the development of a bond proposal in 2002. Legislators originally placed it on the November 2004 ballot, but prior to the election voted to defer its appearance on the ballot until November 2006, in deference to other bond measures considered higher priorities at the time. Then again, prior to the 2006 election, legislators deferred the measure until November 2008.

In the months leading up to the deadline to submit measures to the November 2008 California ballot, legislators worked to update the original language of the ballot measure, which hadn't been revised since 2002. That effort, Assembly Bill 3034, finally succeeded August 26, changing Proposition 1 to Proposition 1A and altering some important, but not essential, details about the bond measure.

Pros

Arguments in favor of Prop. 1A:

• California is falling behind its major competitors in the world economy due to its continued reliance on inefficient and expensive automobile and air travel. High-speed train systems are developing and expanding throughout the world, even in places far less wealthy than California (such as Vietnam and Algeria).
• The $10 billion bond is a relatively small down payment on a very large system that would be paid for mostly by private investors without further state tax subsidy.
• The alternative to high-speed rail — more highways and expanded airports — is not only more expensive, but it also would increase pollution at a time when we are moving to reduce the level of pollution in the state.
• With California's growing population and consequent travel demand, there is no way to meet our greenhouse-gas reduction goals other than through the projected diversion of trips from air and automobile travel that high-speed trains would accomplish. In fact, the environmental impact of not building high-speed rail is devastating.
• Increasing fuel prices will drive up the cost of driving and flying relative to air travel, likely making the high-speed train system even more attractive as an alternative to travelers, more profitable to the operator and a bigger contributor to reductions in greenhouse gas emissions than predicted in the EIR.
• Los Angeles to San Francisco is the most highly trafficked air corridor in the world. Compared to air travel, the proposed high-speed trains would be much more comfortable, offering passengers the ability to walk around, access the Internet and mobile phone networks, and avoid onerous security checks. With roughly equal door-to-door travel times between San Francisco and Los Angeles, many business travelers would prefer the train and pay a premium to use it.
• The system not only would facilitate high-speed travel between San Francisco and Los Angeles, but also improved commuter rail and regional intercity rail, giving Californians throughout the state important transportation alternatives.

Cons

Arguments against Prop. 1A:

• By enlisting private investors in the construction and operation of the system, the state is giving away an important public asset and even subsidizing it by the issuance of these bonds to sweeten the deal.
• While Los Angeles to San Francisco may be the most profitable segment due to the lucrative business traveler market, the most important segments for replacing vehicle trips are the regional lines. The system should not emphasize the long-haul trips as it does, and instead should focus on shorter trips that can be more affordably accommodated by rail. The goal should not be to compete with air travel over 500 miles but to compete with car travel over shorter distances.
• While trains are a nice idea, it's just not a priority for California right now. We're still paying back the highway-expansion bonds from two years ago and we have prisons and dams to build. And with gas as expensive as it is, we should save some of our bonding capacity to support the exploration of more oil off the coast.

SPUR’s analysis

The high-speed train system is well planned and long overdue. Criticisms of the proposal, for the most part, amount to the charge that "it's not good enough," and its associated presumption that we should reject this proposal until a better one comes along. This point of view fails to recognize that every delay in building the system increases its costs due to the severe escalation in construction costs hitting all construction projects.

The argument that the proposed system's emphasis on competing with air travel between San Francisco and Los Angeles is misguided fails to recognize the collateral benefits of that emphasis. Operating surpluses generated by the system must, by law, be put into the expansion of the system—and there is no source of funding for expansion of high-speed trains other than the user fees the initial segment is expected to generate. Also, most trips would not be for that full distance, but rather for shorter trips in between. A trip between the downtowns of San Francisco and San Jose would take just 30 minutes, for example, much faster and far more comfortable than an automobile trip.

Further, while connecting downtown San Francisco to the downtowns of other California cities with fast and efficient train service would have a positive benefit to San Francisco's economy, it could transform the economies of struggling downtowns in the Central Valley, as well as help expand jobs and increase the number of residents in and around downtown San Jose. Suburban office sprawl is as dangerous a contributor to global warming as residential sprawl. High-speed trains give us the opportunity to vitalize downtowns that need it.

Finally, the system is planned to minimize the effects of sprawl and maximize the potential for transit-oriented development throughout the system. In response to urging from SPUR and others, the California High Speed Rail Authority chose to place the route along the populated U.S. Highway 99 corridor instead of along the Interstate Highway 5 corridor. It also agreed to place the train stations in the city centers instead of at the edges, and it has developed principles and guidelines that must be followed before cities will receive a station. These decisions slightly increased the cost of the project but dramatically increased the benefit, as city-center stations would lead to transit-oriented development and limit the sprawl inducing effects that might otherwise be the result of a high-speed train system that makes it easier to commute long distances.

This bond is necessary to improve mobility throughout California, shift the growth in intra-state travel from cars and planes to trains, and reshape our low-density, sprawling land use patterns of the past half century.

SPUR recommends "Yes" vote on Prop. 1A

Increases requirements for the state Renewable Portfolio Standard for electricity generation, and restructures the way renewable energy programs are managed.

What it does

Proposition 7 would make many changes to the laws and regulations affecting public and private electrical utilities in California. The most significant change proposed by Prop. 7 affects state law regarding California's Renewable Portfolio Standard. The RPS is defined in the state Public Utility Code as the specified percentage of renewable energy that retail electricity sellers are required to procure. Prop. 7 would raise RPS targets for the state's regulated private electricity providers — including PG&E, Southern California Edison, San Diego Gas & Electric, and other smaller providers — and apply these new requirements to municipal utilities. Currently, only private electrical corporations are required to generate 20 percent of their power from renewable energy by 2010. Prop. 7 would retain this benchmark, and then raise the RPS for all utilities to 40 percent by 2020 and 50 percent by 2025. To meet this goal, all electricity providers would need to increase their share of renewable electricity purchasing by at least 2 percent per year, rather than the current 1 percent.

Prop. 7 also makes a number of changes to the rules about new renewable energy plants. It shortens the time frame for certification of new renewable energy plants and transmission lines, giving the California Energy Commission a six month deadline rather than the current 12 to 18 months. It also changes two types of review, limiting the authority of the courts to halt construction or operation of renewable facilities, and limiting public comment to a 100 day comment period. Further, Prop. 7 expands the CEC's permitting authority, which now resides in local governments, and transfers some functions — including permitting electrical transmission lines and determining the market price of electricity — from the California Public Utilities Commission to the CEC.

Prop. 7 appears to limit electricity rate increases to 3 percent though it does not provide a mechanism for this "cap." The measure would require electricity providers to offer renewable energy procurement contracts of no less than 20 years in duration. It expands penalties and removes the cap on monetary penalties if an electricity provider fails to procure sufficient amounts of renewable energy. It directs this penalty revenue into a "Solar and Clean Energy Transmission Account" to purchase property or rights of way for renewable energy.

Lastly, Prop. 7 amends the Public Utilities Code to allow executed contracts, rather than completed infrastructure, to count toward meeting renewable obligations. It also excludes energy produced from facilities that generate less than 30 megawatts from the amount that qualifies for the new higher renewable energy standards.

Why it is on the ballot

Prop. 7 is an initiative state statute put on the ballot through a signature petition drive. The primary financial backer is Peter Sperling, an environmental philanthropist, whose well known father, John Sperling, is the founder of the University of Phoenix. The campaign has also been partially funded by Jim Gonzalez, the chairman of the campaign and a former member of the San Francisco Board of Supervisors.

California has demonstrated national leadership in setting aggressive targets to reduce greenhouse gas emissions and fight global warming. Over the past several years, California has adopted a suite of legislation and executive orders that set mutually reinforcing targets to address emissions reductions through the many ways we use energy and fuels. Principal among these measures is the Global Warming Solutions Act of 2006 (Assembly Bill 32), which set a target of reducing emissions to 1990 levels by 2020. The state has a longer-term target of an 80 percent reduction from 1990 levels by 2050. Implementation of AB 32 will take an economy wide approach to reducing emissions, including redirecting energy production toward renewable and alternative energy resources. The draft scoping plan for implementation was released in June 2008 and is scheduled to be adopted in November, after public review.

California also has the highest renewable energy targets of any state in the country. The first Renewable Portfolio Standard was passed in 2002. This legislation originally called for a goal of 20 percent renewables by 2017, and was later amended by Senate Bill 107, which pushed the 20 percent goal to 2010. California is taking steps each year to increase the amount of renewable energy provided in the state. Gov. Arnold Schwarzenegger has proposed a target of 33 percent renewables by 2020, a goal that pending legislation, Senate Bill 411, has been crafted to implement.

These targets are ambitious compared to the amount of renewable electricity that is purchased today. In 2006, investor owned utilities — such as PG&E and Southern California Edison — had an average of 13 percent of their electricity from renewable sources. Other private electricity service providers, such as those supplying certain government entities and universities, averaged 2 percent. Municipal utilities, such as L.A. Water and Power, and the Sacramento Municipal Utilities District, averaged 12 percent, but only 7 percent if large hydroelectric sources are excluded.

Numerous agencies are responsible for managing and regulating energy production and use in California. The California Public Utilities Commission is responsible for regulating electricity rates charged by investor owned utilities. The California Energy Commission issues permits for power plants exceeding 50 megawatts. The Federal Energy Regulatory Commission is responsible for hydroelectric facilities. Local governments are usually responsible for permitting facilities smaller than 50 megawatts, including renewable sources such as wind and solar. The California Independent System Operator is responsible for ensuring the reliability of the electric grid and managing the queue of suppliers providing electricity to the statewide grid. Energy transmission lines are subject to permitting based on the ownership of the line, but may involve the California PUC if an investor owned utility proposes the line, the CEC if the line is related to a large power plant, FERC if the line is part of the state transmission grid, and local governments if the line crosses their territory.

Pros

Arguments in favor of Prop. 7:

• The measure would bolster California's efforts to fight climate change, and would promote renewable energy in a time of rising oil prices. It would push California's electric providers to buy more electricity from renewable sources and speed the establishment of more, larger sources of renewable energy generation than might otherwise be built.
• It is a worthwhile goal to set even more aggressive targets than those in place, in spite of the gap between today's renewable energy purchasing levels and the goals of the existing RPS. Ambitious goals and removing the cap on penalties would change the pace at which utilities and regulators work to bring renewable sources to market.
• The measure would attract investment and clean technology business to California to take advantage of the increase in demand for renewable energy supplies.
• The measure would require the California Energy Commission to identify clean energy "zones" to promote them as sites for new facilities, specifically of large-scale solar facilities in the desert. Renewable energy zones and transmission corridors have been identified as a way to improve the permitting process while facilitating public participation and minimizing environmental damage.
• This measure would bring equity to the statewide rules for renewable energy goals by requiring municipal electric utilities to meet the higher RPS standards expected of private and investor owned utilities. Municipal utilities account for approximately 24 percent of retail electricity sales in the state, and are not subject to the existing RPS for private utilities.
• The measure would extend the period of required procurement contracts from 10 years to 20 years, ensuring a longer-term commitment by utilities. This would also provide greater financial security for investors.

Cons

Arguments against Prop. 7:

• Prop. 7 would limit the growth of renewable energy projects by excluding projects smaller than 30 megawatts from being counted toward the state's renewable energy targets. These smaller projects supply more than 60 percent of the renewable energy contracts under today's RPS.
• Prop. 7 actually would make its ambitious renewable energy targets harder to reach. The measure would allow for contracts—as opposed to installed capacity — to count toward the RPS. It also would allow retail sellers (in certain circumstances) to avoid compliance with RPS standards, rather than the current flexible arrangement that allows them to defer compliance for up to three years. By allowing utilities to engage in speculative contracts—which already have a high failure rate under today's RPS — and providing a way to avoid compliance altogether, this measure could result in less installed renewable energy than expected.
• The measure sets a rigid timetable for permitting decisions while limiting the scope of judicial, expert agency and public review. Delays in project permitting that occur today are generally due to factors outside of the Energy Commission's control. The existence of a shorter timetable would not help speed up the development of renewables, and the loss of public and agency participation could lead to insufficient evaluation, poorly designed projects and controversy.
• The measure could result in an increase in electrical rates, by guaranteeing renewable energy providers a rate at least 10 percent above the market price of electricity, as determined by the California Energy Commission. This artificial cost increase could stifle competition, and the measure provides no mechanism by which ratepayers would be protected from resulting price increases.
• Prop. 7 fails to address the barriers to the development of renewable energy and could thwart more effective legislation in the future. A statewide initiative is already underway to address barriers to the development of renewable energy. The Renewable Energy Transmission Initiative is assessing renewable energy zones and transmission corridors in California and neighboring states that could provide significant renewable electricity to California by 2020. RETI is identifying the areas that would be cost effective and have the least impact on the environment. RETI involves numerous natural resource agencies and other stakeholders, and is a much more comprehensive and broad based approach to address this barrier than is Prop. 7.
• The measure does not address the backlog of 68,000 megawatts of renewable projects in the California Independent System Operator queue awaiting interconnection to the grid. Since the adoption of the RPS, and of California's climate action goals in AB 32, power plant developers have flooded the interconnection queue, with more than 105,000 megawatts awaiting study. Under Federal Energy Regulatory Commission rules, these projects are vetted on a first-come, first-served basis. Cal ISO, the CPUC, and other stakeholders have been working to reform this process, and the Cal ISO board voted in July 2008 to support several queue planning changes that will also dovetail with the RETI process. Prop. 7 does nothing to address the problem of the grid connection backlog.
• This measure could harm California's environment—particularly sensitive desert ecosystems. The measure misleadingly claims to guarantee environmental protections, citing the Desert Protection Act, which is a provision of federal law and cannot be enforced by state agencies such as the CEC. The initiative would actually override current environmental protections such as the California Environmental Quality Act by reducing public and environmental review time frames in the name of expediting permits.

SPUR’s analysis

While increasing renewable energy production is a worthy goal, Prop. 7 as crafted would hamper California's efforts to green our energy portfolio.

There are two main reasons to oppose Prop. 7. First, it would do nothing to address the issues and problems we face in meeting existing goals for renewable energy, which are already ambitious at 20 percent by 2010. These barriers include finding sites for new transmission infrastructure, speculative contract failures, bringing new projects online—especially smaller facilities that are closer to load centers and that can provide grid reliability—and identifying areas for the development of renewable energy and transmission zones in a way that minimizes environmental damage and facilitates public participation. Second, Prop. 7 actually undermines the ways that energy agencies, utilities, renewable-energy developers and environmental organizations and others have identified as ways to help reach goals for renewable energy. Its fatal flaws include limiting judicial, agency, environmental and public review to an arbitrary and short time frame; excluding projects smaller than 30 megawatts from counting towards the RPS; and rushing the development of clean energy zones when there is already a public process underway to identify the best and lowest cost sites; and creating a loophole for utilities that allows them to avoid compliance altogether. Experience shows that rushing environmental reviews and eliminating public oversight does not lead to strong outcomes that earn public support.

SPUR recommends a "No" vote on Prop. 7.

Authorizes the state to sell $5 billion in general obligation bonds to provide rebates for the purchase of alternative fuel vehicles, and financial incentives for research and development of renewable energy.

What it does

Proposition 10 would authorize the state to sell $5 billion in general obligation bonds to provide rebates to reduce the consumer cost of purchasing alternative fuel vehicles. The bonds also would provide financial incentives for research, development, design and demonstration of alternative fuel vehicles and renewable energy technologies, and provide grants to some local governments and universities to conduct demonstration projects and public education. Approximately $3.4 billion is allocated for rebates on new vehicles and development and production of alternative-fuel vehicles. Prop. 10 designates $1.25 billion for renewable energy research and development, with $800 million specifically for solar technology. It designates $325 million for local government and university grants.

The largest account created by the bond—$2.875 billion—is designated for alternative fuel rebates, a program to be administered by the state Board of Equalization. The rebates would encourage the purchase of alternative fuel vehicles and fueling appliances that are presumably more expensive than those consumers would purchase in the absence of the rebates. The rebates could be used for the purchase of new vehicles or "repowered" vehicles, which are modified to use alternative fuels. Approximately 235,000 vehicles would be eligible for rebates, roughly split between rebates for passenger cars and light-duty vehicles, and for medium- to heavy-duty trucks. Rebates range from $2,000 for light-duty vehicles that achieve a 45 mpg standard, up to $50,000 for heavy-duty vehicles weighing more than 25,000 pounds.

In addition to the rebates, Prop. 10 would allocate $550 million under the Clean Alternative Fuels Account for the research and development of low-carbon fuels, production of alternative fuel vehicles, and alternative fuel vehicle testing and certification. The Air Resources Board would be responsible for administering these incentives. There is no provision in the measure to retire older, polluting vehicles "replaced" by the rebates, or to fund the retrofit of vehicles that already have been purchased.

The other major component of Prop. 10 is the Solar, Wind and Renewable Energy Account, which would provide $1.25 billion for research, development and production of electric-generation technology to reduce greenhouse-gas emissions. Of this total, $800 million must be spent on solar technology, though the measure does not specify why solar should receive 80 percent of the funds. The California Energy Commission is responsible for administering these incentives, as well as $200 million in additional funding provided by the measure for local governments to promote and demonstrate alternative fuel and renewable energy use in recreational and cultural venues. Eight cities are eligible for these funds: Los Angeles, San Diego, Long Beach, Irvine, San Francisco, Oakland, Fresno and Sacramento. Finally, the measure would provide $125 million in grants to California universities, colleges and community colleges for public outreach and educational programs dealing with renewable energy, alternative fuels, and tuition assistance for low-income students.

The total cost of Prop. 10 would be approximately twice the value of the bond, or $10 billion, with an average payment from the state's General Fund of $325 million per year for 30 years.

Why it is on the ballot

Proposition 10 is an initiative state statute put on the ballot through a signature petition drive. The sole financial backer of the campaign is Clean Energy Fuels Corp. of Seal Beach.

California has made great progress in improving air quality, in spite of our population doubling over the last 30 years. Still, today more than 90 percent of Californians live in areas that have unhealthful air at times, exceeding air quality standards for ozone and particulate matter.

The state administers a number of programs through regulation and financial incentives to promote air quality, clean alternative fuels, energy efficiency and renewable energy. Funding for these programs has come primarily from fee revenues. One such program, the Carl Moyer Memorial Air Quality Standards Attainment program, administered by the California Air Resources Board, is funded at $141 million annually through 2015. This program provides grant funding to encourage the voluntary purchase of cleaner than required engines, equipment and emission reduction technologies. It also is used in some air districts to fund the voluntary retirement or buy back of older light-duty vehicles. In 2006, voters approved Proposition 1B, which provided $1 billion to reduce emissions from school buses and the movement of goods. Of this program, $760 million was allocated for replacing heavy-duty trucks. CARB has guidelines to ensure these two programs complement each other.

California also leads the nation in creating policies designed to reduce carbon emissions, fight global warming and redirect energy production toward renewable and alternative-energy resources.

The Global Warming Solutions Act of 2006, Assembly bill 32, put climate change on the national agenda and has spurred action by many other states. In June 2008, CARB released the Climate Change Draft Scoping Plan, crafted to implement the mandate of AB 32 to reduce greenhouse-gas emissions to 1990 levels by 2020. The measures in the draft that are adopted by CARB will be further refined over the next three years and should be in place by 2012. One of the principal ways emissions will be reduced under this plan is through a market based cap-and-trade program, which strives to reduce emissions for the lowest possible cost. In 2007, Gov. Arnold Schwarzenegger signed Executive Order S-01-07 to adopt a low carbon fuel standard, which will produce a 10 percent reduction in the carbon content of all passenger vehicle fuels sold in California. This is expected to replace 20 percent of the gasoline cars consume with lower-carbon fuels. It also is predicted to more than triple the size of the state's renewable fuels market and place more than 7 million alternative fuel or hybrid vehicles on the roads (20 times more than are on California's roads today).

In 2007, the California Assembly also passed Assembly bill 118, creating the Alternative and Renewable Fuel and Vehicle Technology Program to be administered by the California Energy Commission. AB 118 authorizes the commission to award approximately $120 million annually as grants, revolving loans, loan guarantees and other appropriate measures to develop and deploy innovative fuel and vehicle technologies that attain the state's goals for the use of alternative fuels and reduction of petroleum use in a manner consistent with climate-change policies.

California also has the most aggressive targets in the country for renewable electricity production. Our Renewable Portfolio Standard requires investor owned and privately owned utilities to meet a goal of generating 20 percent of their electricity from renewable sources by 2010. Pending legislation would raise the target to 33 percent by 2020, a goal Schwarzenegger supports.

According to climate scientists, California and the rest of the developed world must cut emissions by 80 percent from today's levels to stabilize the amount of carbon dioxide in the atmosphere and prevent the most severe effects of climate change. This long-range goal is reflected in Executive Order S-3-05, which requires an 80 percent reduction of greenhouse gases from 1990 levels by 2050. The measures and approaches in the scoping plan for AB 32 are designed to accelerate this necessary transition, promote the rapid development of a cleaner, low carbon economy, create vibrant livable communities, and improve the ways we travel and move goods throughout the state.

In 2006, voters rejected Proposition 87, which would have raised $4 billion via a state oil production tax of 6 Percent. The revenues would have been used to fund renewable-energy development.

Pros

Arguments in favor of Prop. 10:

• Californians should invest early in research and development, public information, and programs to implement technologies that reduce global warming. This initiative would further bolster California's position as a global leader on climate change, and would attract investment and clean technology businesses to the state.
• While California leads the nation with laws and regulations to curb global warming and accelerate the use of alternative fuels, funding for clean energy research and development has been chronically underfunded. This measure makes an aggressive public investment to speed the transition to cleaner fuels and renewable energy. The bond amount of $5 billion is more than double the amount of money annually expended on clean-energy research and development by the federal government.
• Reducing the price of cleaner cars and trucks would make them more attractive to consumers. In the short term, this would slightly improve the average efficiency of California's vehicle fleet as a whole.
• The state cannot wait for the slow process of implementing our landmark climate change legislation, AB 32, over the next several years. Voters must act now to address global warming. Special interests may weaken the AB 32 legislative objectives as the implementation plan is codified, but ballot initiatives can be implemented quickly and without a lengthy public review or consensus building process.
• Heavy-duty diesel trucks are highly polluting and very expensive, and this measure would provide funding to make it more affordable for buyers to choose cleaner vehicles. The amount of funding for new, clean heavy-duty trucks—$1 billion—is a significant addition to the amount California invests annually in the replacement of heavy-duty vehicles.
• Rebates for heavy-duty trucks would decrease pollution at the state's ports. Air pollution from diesel emissions around these ports is a significant health hazard. The proponents of the successful state 2006 Transportation Bond, Proposition 1B, successfully presented the same argument, earmarking $1 billion for projects to improve transportation in and around ports.

Cons

Arguments against Prop. 10:

• It is premature to obligate the state to emissions reduction strategies before a comprehensive "road map" is in place. Voters should wait until the state has adopted the implementation plan for its landmark Global Warming Solutions Act, AB 32, before adopting any bond measure. The Prop. 10 program has not been technically analyzed against the implementation plan, or scrutinized by the public. The allocation of bond resources may not fulfill AB 32 mandates, and may skew the state away from the most productive, lowest cost approaches to energy conservation and the reduction of climate change. It is essential that scarce state financial resources are targeted toward technologies and economic incentives that will produce the most effective results. A more comprehensive, strategic approach to subsidies and rebates should be part of the AB 32 implementation plan.
• Prop. 10 provides a great deal of money to buy clean vehicles, without any provisions for retiring the dirtier vehicles that the clean vehicles presumably would replace. As a result, it simply makes putting more cars on the road less expensive. Taxpayer financing is more appropriately spent on public goods that would not be privately provided, such as public transportation or buying down emissions from existing sources. The measure does not provide anything either for transit projects or for cleaning existing vehicles.
• It is possible to subsidize low-emission vehicles without taxpayer financing through a "feebates" program: in other words, by adding a surcharge to the sale of inefficient vehicles and using it to finance the purchase of vehicles meeting a higher fuel efficiency standard. One such program, a Clean Car Discount program, is expected to be developed through the implementation of AB 32. Many environmental, public health and labor organizations support such a program.
• The measure would pay a high price for a change that could be accomplished by regulation alone. The Low Carbon Fuel Standard is expected to add 7 million new clean and alternative fuel vehicles to California's roads by 2020, far surpassing the 235,000 vehicles that would be added through Prop. 10's rebate program.
• Since the measure would not provide any revenues to repay the general obligation bonds, the principal and interest would be taken from the already strained General Fund, thereby reducing monies for other state programs not protected by their own dedicated fund.
• A 30-year term to pay for rebates that would be expended within 10 years is inappropriate, especially since the vehicles bought with the rebates would no longer have value before the state finishes paying them off.
• Implementation of the measure would likely cost the state about $10 million annually through 2018, money that would not be covered by the 1 percent limit the measure allows for administrative costs. These funds would be an additional draw on the General Fund.
• The State of California is not necessarily the beneficiary of the bond expenditures. The proposal allocates $1 billion for renewable-energy research and development. There is no provision for the state to financially benefit from technologies developed with bond funds. The companies or universities developing these technologies are not required to be located in California. California taxpayers should not subsidize technological development outside of the state.

SPUR’s analysis

Clean energy and alternative fuels are important, and must be further developed and deployed to help fight global warming. The intent of Prop. 10 is fundamentally good, and the $1 billion it obligates for renewable electricity generation projects could help with the challenge of meeting our renewable energy portfolio goals. The measure might attract cleantech businesses and investment to California, similar to the way the stem cell bond (2004's Proposition 71) attracted the biotech industry and much more private investment than the state expected.

However, a $5 billion bond is not needed to accomplish the objectives of the measure. The intent of the bond could be accomplished in other ways, through regulation and "feebate" programs. The bond is separate from the package of strategies recently proposed to implement the state's landmark global warming legislation, AB 32, and could throw a wrench into the comprehensive planning process for global warming that the state is leading. Implementing AB 32 will require regulations, incentives, voluntary programs and financing strategies that will all be subject to public and environmental review, which the mix of strategies encompassed in this bond do not. The bond also provides no funding for some of the most important ways to reduce vehicle emissions over the long term: improving public transportation and changing land use to provide incentives for less driving. The bond would continue to obligate taxpayers long after the new vehicles it finances are retired from the road. Finally, the bond has no provision for retiring existing vehicles as it helps pay for new ones.

SPUR recommends a "No" vote on Prop. 10.

Restructures the redistricting process for state legislative districts in California to take power away from elected officials in the state Legislature and put it in the hands of a citizen commission.

What it does

Proposition 11 is an amendment to the California Constitution that establishes a new process to determine district boundaries for the California Legislature and the state Board of Equalization. It would not directly affect the drawing of the boundaries of U.S. congressional districts in California, although it would add two new criteria for the selection of such districts.

How it is now

After each decennial census, the California Legislature draws new boundary lines for congressional, California Senate and Assembly — the two houses of the Legislature — and Board of Equalization districts. These new district lines are then passed as a bill in the Legislature and signed into law by the governor.

The Legislature seeks to apply three guidelines as it establishes district boundaries:

How it would change

Prop. 11 would eliminate the Legislature's role in the drawing of district boundaries for the Legislature and Board of Equalization. Instead, Prop. 11 would create a 14-member independent citizen commission to redraw California state legislative and BOE district lines every 10 years through a highly transparent public hearing process. This commission would establish single member districts for the state Senate, Assembly and BOE.

The commission would seek to apply the three criteria currently used in determining districts, but it also would apply additional standards:

Prop. 11 also includes a provision to change the criteria for drawing congressional districts in California -- although that power would remain with the Legislature -- requiring consideration of communities of interest and neighborhoods as well as geographically compact districts. Prop. 11 does not make reference to the other two new criteria, which would be applied by the new redistricting commission.

The new citizen commission on legislative districts would have seats for 14 members: five members would need to be registered with the largest political party in California (currently the Democratic Party), five would be registered with the second largest political party in California (currently the Republican Party), and four would not be registered with either of the two largest political parties (often called "decline to state" voters, this growing group currently makes up 23 to 28 percent of the population). Party size would be determined based on registration numbers.

A quorum of the commission would be nine members, and nine or more affirmative votes would be required for any action. Also, at least three votes from representatives of each of the two largest political parties in the state and three votes members of neither of those parties would be required to approve the final district maps.

The commission membership would be determined every ten years. Service on the commission would be open to all registered voters who have been continuously registered for five or more years with the same party declaration and who have voted in two or more elections. Elected officials, those working for the Legislature and lobbyists — and their family members — could not serve on the commission. People who have made political donations of more than $2,000 and some others also are excluded from serving on the commission for ten years and would be forbidden from being appointed to any position by any elected official for five years after service.

The commission would hold public hearings during the process of drawing the maps. When it completed the maps, it would issue a report to explain how it applied the required criteria to the new boundaries.

Maps created by the commission would be subject to referendum. Within 45 days of the certification of the maps, any registered voter could challenge them on the grounds that they violated the state constitution, the U.S. Constitution, or any federal or state statute. The California Supreme Court would have exclusive jurisdiction in all proceedings in any challenge to certified final maps.

Why it is on the ballot

Many good government groups in California, such as Common Cause and the League of Women Voters, have been working for several years on legislation to modify the redistricting process. For three years those efforts have failed to produce a successful proposal in the Legislature. As a result, these groups and several others chose to gather signatures for their own initiative, which qualified for this election.

The impetus for reforming the district boundaries in California comes from a critique of the overtly political process under which such boundaries have been drawn in the past, and the way that rules were bent to benefit incumbents. There are examples of incumbents drawing new boundary lines based on homes they were planning to buy or based on where a competitor lived. Further, throughout the state minority communities that would have qualified for protection under the Federal Voting Rights Act are sometimes carved into pieces. For example, Assembly Districts 23, 24 and 25 in Silicon Valley are drawn in such a way that low-income residents in a "community of interest" are divided among all three districts.

In the past, Californians have rejected numerous redistricting proposals. In addition to the recent legislative attempts, 60 percent of California voters rejected Proposition 77 in 2005, which would have established a new panel of three retired judges selected by legislative leaders to manage redistricting.

Proposition 11 is modeled in some ways on efforts from other states, such as Washington and Arizona. There are some differences, however. For instance, the Arizona Legislature picks the members of that state's commission while in California the state auditor would choose people at random from a qualified pool.

Pros

Arguments in favor of Prop. 11:

• Under current law the Legislature draws its own districts, which presents a clear conflict of interest because legislators keep their own incumbency as a priority. As a result, most state races are uncompetitive among parties. Statewide, there are only a handful of districts that do not predictably result in either a Republican or Democrat winning in most elections.
• Prop. 11 creates a diverse commission composed of Democrats, Republicans and representatives from neither major party. This ensures that no single party has the power of drawing lines.
• The addition of new redistricting criteria is appropriate, particularly given the importance of using "communities of interest" as a criteria as well as the value of contiguous and nested districts.
• The commission would make use of strict guidelines when drawing new district boundaries, and the whole process would be open and transparent. Media and interested parties would have access to the process the entire way — unlike today, when redistricting deals are made in private by sitting politicians without any public scrutiny.
• The current system locks in a process in which the Legislature is composed of approximately one-third Republicans, who can effectively prevent important changes in the state or block the adoption of a state budget. Instead, Prop. 11 could result in the creation of at least 12 seats that would become extremely competitive. This could yield a Legislature with more than two-thirds Democrats, enough to break most deadlocks.
• By increasing the number of competitive races. Prop. 11 could increase accountability on the part of legislators, who would no longer be effectively guaranteed reelection.

Cons

Arguments against Prop. 11:

• The criteria for eligibility to serve on the new commission would be very strict, and could prevent people who are knowledgeable about the political process from being allowed on the commission. This makes the commissioners more susceptible to being lobbied and swayed.
• This is a new model that has never been tried in other states, so it is unclear if it would be successful.
• Commissioner selection would be random from among a prequalified pool of applicants, and would not necessarily yield a commission with sufficient experience and expertise — or one that would reflect the diversity of California.
• The redistricting criteria could preclude the maximization of voting rights districts, which could negatively harm some of the seats held by people of color.
• Nesting (having two Assembly districts fit neatly into larger Senate districts) could result in districts with different population sizes. While the courts have agreed that nesting is not a violation of the Voting Rights Act, the use of nesting as a priority could conflict with a goal of increasing the number of "minority" legislators. For example, in 1991, the Mexican-American Legal Defense and Education Fund sued over the maps prepared by the redistricting special master because the nesting precluded the creation of another Latino state Senate district.
• The creation of two separate redistricting processes for the Senate and Assembly could make it hard for people to attend all the meetings. This would make it difficult for organizations to be able to fully participate in two separate processes. This would make it harder for low-income communities to participate.
• In an era of term limits, redistricting for incumbent protection is more serious at the level Congress, not the state. But this measure does not include changes to the districts for Congress.

SPUR’s analysis

The question for SPUR is whether this measure resolves the problem as it currently exists. The proponents claim that it does. The opponents claim that Prop. 11 would threaten the parties in power as well as potential "communities of interest."

Although this measure is quite different from the systems used in other states, and thus we are uncertain how Proposition 11 would play out once implemented, this is an important reform that might open up our deadlocked political process in the state.

Further, we believe that a shared commission that does not include elected officials is in the tradition of good government reform. We believe that such a change could increase the competitiveness of — and potentially public involvement in — California legislative elections.

SPUR recommends a "Yes" vote on Prop. 11.

Authorizes the City to issue $887.4 million in general obligation bonds to rebuild the San Francisco General Hospital and Trauma Center.

What it does

Proposition A is a measure that appropriates $887.4 million in general obligation bonds for the building of a new acute care hospital and trauma center at San Francisco General Hospital. Acute care refers to short-term patient care, often done in emergency room settings. A 1994 state law requires seismically unfit acute-care hospitals, such as SFGH, to be rebuilt by 2015.

These funds would pay for a new hospital between two sets of historic red brick buildings fronting Potrero Avenue. The new building would have approximately 442,000 square feet of space with 284 general acute care beds, an increase from the current 252 beds. The building would have nine stories. To accommodate all necessary functions within zoning height limits, two floors would be built underground. The underground floors would extend as far as the brick buildings on either side, while the above-ground floors and patient rooms would extend to within 40 feet of those buildings.

The old hospital and its 252 beds would be reused for non-acute care and psychiatric inpatient services.

If Proposition A is approved, site clearance would begin in the summer of 2009. The foundation and structural framework would begin in January of 2010, and build out of the building enclosure would come by summer of 2011. Remaining construction is planned to take approximately three years, meaning the building would be open and operational before January of 2015, in time for the state deadline.

Why it is on the ballot

Prop. A was placed on the ballot by a unanimous vote of the Board of Supervisors. General-obligation bonds require the approval of two-thirds of the voters in an election.

Prop. A is a response to a 1994 state law that requires upgrading or replacing seismically unsound acute care hospitals throughout California. During the 1994 Northridge earthquake, more than 100 hospitals throughout the Los Angeles area were damaged, with some literally being shaken off their foundations. As a result of that experience (as well as the 1989 Loma Prieta earthquake), the state passed Senate bill 1953 in 1994. That law requires all acute care hospitals to be upgraded or replaced by 2013 (or 2015, if planning for the work is well underway). The measure led to new hospital building codes that require upgrading the foundation, structure, materials, safety, energy and other elements of a modern hospital. The requirements are so stringent that for many hospitals, building an entirely new facility is cheaper than retrofitting an old one.

The existing San Francisco General Hospital building is relatively new, dating from the 1970s. However, its rebar/concrete columns and walls are not strong enough to withstand a significant earthquake. Even a moderate earthquake could require the evacuation of patients and the termination of services. Therefore, it is classified as being in the lowest "structural performance" category and may remain in use as an acute care hospital only through January 1, 2015. Beyond that date, its acute care facilities must shut down in accordance with state law, although the existing hospital may be used indefinitely for inpatient psychiatry, outpatient services and myriad hospital services unrelated to acute care.

In planning the rebuild of SF General's acute care facilities, the City considered several alternatives other than constructing a new facility. The first option was to retrofit the present hospital building. This would require major structural changes while continuing to operate it as an acute care hospital. The current hospital building had an extensive structural evaluation and it was found that the cost to retrofit nearly equaled the cost of a new building; there was no good way either to move the patients to another location or continue to operate during construction; and, in the end, the City would have a facility that was functionally obsolete by today's standards.

The second option was to co-locate with the University of California at San Francisco, at Mission Bay. That option would have offered only one emergency service, and possibly with only enough SF General beds for the population served by the City which would not have accommodated the additional demand from UCSF. This option would have required purchasing additional land at a very high cost, as the UCSF parcel is barely large enough to meet its own needs.

The third option was to build a hospital at Mission Bay, yet contract with UCSF (and other city hospitals) to provide full services, retiring SF General in favor of a healthcare coverage program. The City has developed a health plan, now operational, to cover many of the indigent people in the city. This Mission Bay option was not feasible, however, because SF General is required to renew its facility earlier than is UCSF, which has until 2020 to meet the state requirements. In addition, UCSF did not wish to assume the full roles that SF General plays in the local health care system.

A fourth option would be to rebuild the existing campus. This would entail the removal of the old red brick buildings that face Potrero Avenue. This alternative would have had the advantage of not requiring the construction of two underground floors, because it would have allowed the City to build on a larger footprint while still staying within the existing height limits. In addition, it would allow for future expansion.

An above ground location is best for some essential services, especially the operating suite and its necessary radiology, because it reduces the need to transport patients up and down in elevators from the emergency room and trauma center and patient rooms. An above ground location also can better house the highly trained personnel who would otherwise spend their working lives in the windowless basement, and provides a more pleasant environment for patients. This option would also permit the incremental expansion of the operating suites.

A fifth option would be to use the parking lot next to the current hospital, on 23rd Street. This option was considered less desirable because of its proximity to the private homes across the street. The residents did not want the additional traffic on their street — traffic that already counts existing ambulance traffic of 15,000 visits per year. That building's shape would have had to be tall and narrow, with constraints on essential departments and circulation. It, too, would have had problems with expansion or replacement in the future. In addition, any new facility built here would have been a tight squeeze up against the existing hospital and would have had to be constructed while the hospital was still caring for patients in the older building.

Pros

Arguments in favor of Prop. A:

• SF General is required to rebuild its acute care hospital with a trauma center, or face closure in 2015. This bond would allow the City to comply with this state law. Prompt funding and action is necessary to prevent SF General from closing.
• If SF General is not rebuilt and is forced to close, the City would lose care for 100,000 patient days every year, 20 percent of the City's acute care patients. San Francisco also would lose the only trauma center for San Franciscans. SF General's trauma service and emergency room is a citywide asset for all residents, not just the poor.
• Before it was placed on the ballot, this bond received a level of planning equaled by few bond measures in the City's history. The measure has been analyzed for four years, and the City already has spent $25 million on planning and architectural work.

Cons

Arguments against Prop. A:

• The design and location of the building does not permit any significant modifications to respond to changes in demand or the delivery of medical services. Because the new hospital was designed and will be built as a single unit, it cannot be expanded horizontally or vertically. As the delivery of medical care evolves, the new building will be hard to adapt without a chassis that provides for incremental replacements or expansions.
• Better alternatives for the building location and design were overlooked to avoid conflict with historic preservation because the City chose to build the hospital immediately between the existing historic buildings. Although these buildings are still in use, they are seismically unsafe and functionally obsolete. They house research functions, which could have been relocated. Building the new hospital directly between the existing buildings makes it more expensive to build and prevents expansion in the future.
• The building's design includes uses in the two basement levels that should operate above ground. These basement levels include essential services such as the operating suite, its accompanying procedure rooms and invasive diagnostics. These should be located above ground, which would benefit the large number of outpatients. In addition, the underground location precludes any future expansion of surgery areas.
• Construction cost escalation may exceed the projected 7 percent per year estimated in the SF General capital plan. The usual strategy when medical facilities must adjust the size of the project to the amount of money available is to reduce the number of beds or the volume of services. The building as designed is a single unit that cannot easily be reduced incrementally.

SPUR’s analysis

SPUR has been one of the strongest advocates of the City's Capital Planning Program, which now has an open and transparent process of identifying infrastructure needs and setting priorities. San Francisco General Hospital is one of those key priorities. We support the replacement of the hospital, given that its role cannot readily be duplicated by any other hospitals in the city, and that it serves an important population not served as well by other hospitals.

SPUR probably would not have recommended this plan, if we were to choose from among all possibilities. However, after careful and detailed study, we conclude that this proposal is sound and will meet the core objectives of San Francisco's health delivery needs.

Choosing not to rebuild simply is not an option. Further, pursuing other alternatives — such as getting out of the business of a publicly funded facility and asking private hospitals to pick up the type of patients served by SF General — likely would not be successful and would result in major increases in patient costs at the private hospitals. Even if those hospitals were to take on more uninsured patients than they do now, their medical staffs do not have the same charitable obligation or experience as the staff of SF General.

Ultimately, San Francisco General Hospital has an important and special role in this city, particularly for patients who do not have the financial means to access the same quality of care from private facilities. Rebuilding the acute care hospital would allow the continuation of this care and maintain the existence of a Level I Trauma Center in San Francisco.

SPUR recommends a "Yes" vote on Prop. A.

Creates a General Fund baseline and property tax set-aside for affordable housing for the next 15 years.

What it does

Proposition B is an amendment to the San Francisco City Charter that would:

• establish a General Fund baseline appropriation for affordable housing
• dedicate a set-aside of property tax revenues of $25 of each $100,000 of assessed property value, to be spent on affordable housing
• require the City to prepare an affordable housing plan every three years and an affordable-housing budget annually.

The property tax set-aside is targeted to benefit lower income households and is more restrictive in the types of expenditures that are allowed, whereas the General Fund baseline is more flexible in its allowable uses and the income levels it targets. Both funding sources are restricted from paying for units that are under the jurisdiction of the San Francisco Housing Authority.

As with all City expenditures, both the General Fund baseline and the property tax set-aside would require that the proposed funding be included in the Mayor's budget and appropriated by the Board of Supervisors. However, under the San Francisco City Charter, the Mayor is not legally required to spend money that is appropriated.

Both funding sources would expire automatically after 15 years.

Budget Impacts

The amount of non-restricted General Fund dollars within San Francisco's budget relative to its Charter-based requirements (including set-asides) grows smaller every year. In fiscal year 2008-2009, discretionary funding capacity made up 40.4 percent of the General Fund spending capacity. In times of fiscal crisis, restrictions and set-asides can make it even more difficult to balance the budget and maintain the City's fiscal health.

It should be noted that there are two new revenue measures on the ballot this year: an increase in the property transfer tax and an increase in the payroll tax. While these two new revenue measures are in no legal way tied to the Affordable Housing Charter Amendment, they are anticipated to produce approximately $39.5 million annually, an amount which partially covers the combined impact to the budget of the property tax set aside and the increase in the General Fund baseline.

Why it is on the ballot

San Francisco is experiencing a housing crisis — one that affects very low-income, low-income and moderate-income households disproportionately. We need to find a way to increase the amount of affordable housing in our city.

While we exceed our production targets for market-rate housing, we under-produce housing for people with very low, low and moderate incomes. SPUR believes it should be the goal of an equitable and environmentally conscious city to increase the housing supply at all income levels — which means increasing the public funds available for affordable housing as we zone for more housing.

The primary constraint on the production of more affordable housing is the lack of public subsidy funds. While federal and state programs for affordable housing production exist, we need sources of local subsidies. Federal and state affordable housing finance programs typically require developers of affordable housing to demonstrate "leveraging points," meaning that federal and state funds are matched by local funding commitments. Because of these leveraging requirements, local funds often are a necessary first step in financing the development of affordable housing.

In recent years, there have been two efforts — one in 1996 and the second in 2004 — to pass local bonds to generate funds for affordable housing. Bond initiatives, unlike set-asides, require the approval of two-thirds of participating voters to pass. In 1996, voters approved Proposition A, a bond measure that generated $100 million for affordable housing production. Prop. A produced 2,125 new and rehabilitated affordable rental housing units, and beds in emergency and transitional facilities. The bond leveraged approximately $2.20 in outside funding per dollar during its life cycle.

The 2004 affordable housing bond failed at the ballot.

Prop. B, this year's measure, only requires the approval of one vote more than half of all participating voters to pass at the ballot. Proponents of the measure, concerned that another bond would fail at the ballot, instead put forward this affordable housing Charter amendment — and supported two unrelated revenue measures to enhance the General Fund.

Pros

Arguments in favor of Prop. B:

• Funding for affordable housing at the national and state levels has been declining, while housing costs in San Francisco have risen significantly. San Francisco's housing crisis is among the worst in the nation. We are falling behind on our affordable housing production targets. We have an obligation to try to address this crisis. This measure is predicted to produce approximately 6,000 to 7,000 units of desperately needed affordable housing.
• To access state and federal funds for affordable housing, San Francisco needs a stable long-term stream of local affordable housing funds. Without this measure, we will not be able to access as much outside funding.
• Having a stable long-term source of affordable housing funds will help the City and developers of affordable housing plan more efficiently to achieve San Francisco's affordable-housing goals.
• SPUR has analyzed San Francisco's 1996 Affordable Housing Bond in depth, and found that the program was very well managed and made efficient use of the funds it received. It is likely that Prop. B would be similarly well managed.
• This measure would not have a severe impact on the budget because two other revenue measures (a payroll tax measure and a property transfer tax measure) on the ballot could partially fill the budget hole created by the property tax set-aside and the General Fund baseline requirements. Those measures could provide $39.5 million of new funds annually.
• We need a way to fund affordable housing that isn't dependent on fees on new development. It is fair for all San Franciscans to help support affordable housing, not just those who purchase a newly developed unit.

Cons

Arguments against Prop. B:

• This measure would make it harder to balance the budget and would lead to budget cuts for many other City services that lack a set-aside. This is because the mechanisms to close a budget shortfall are limited. Only $1.2 billion of the City's $3 billion budget is discretionary — that is, available for the Mayor and Board of Supervisors to decide how to spend. San Francisco recently has faced budgetary shortfalls of greater than $250 million, or approximately one-quarter of all the remaining discretionary funds. A set-aside is understandably appealing to advocates for affordable housing because it provides a way around the two-thirds vote requirement for "special taxes" in state law. However, this approach is irresponsible public policy because it hides tough decisions and the budgetary cuts to other services it will cause.
• The revenue measures on the ballot are needed to simply close the holes in the budget that we will have in the very near future. The City faced a $338 million deficit last year, and projects a shortfall of more than $250 million in the coming year. There is no guarantee that these revenue measures will be passed by voters. Moreover, transfer-tax revenue is a very unpredictable revenue stream.
• There is no provision to suspend the measure in difficult fiscal years.
• The set-aside is targeted to households at 80 percent of San Francisco median income and less. While this helps very low- and low-income households, it does not address the need for moderate-income housing, which has the greatest production deficit of all income levels.

SPUR’s analysis

We are split on this issue. This is an example of where SPUR's good government agenda and good planning agenda are at odds with one another. While we are strong supporters of expanding the supply of affordable housing, we have an equally strong concern for the long-term fiscal health of the City. Sometimes we see an overriding public need for a particular service, and have in some cases supported set-asides (such as one for public transit). In other cases, we have opposed set-asides because they were overly restrictive (such as one for neighborhood firehouses). This charter amendment could well be damaging to the fiscal health of the City if the transfer-tax and payroll-tax measures on the ballot this November fail.

While we hold these fiscal concerns, SPUR also strongly believes that we need to create more affordable housing. San Francisco is experiencing an affordable housing crisis. While increasing the supply of market rate housing in San Francisco and other transit-rich parts of the region is critical to drive down the average cost of housing, our affordable housing crisis cannot be solved solely by increasing the supply of market-rate housing. As we wrote in our 2006 report "A Housing Strategy for San Francisco," there is a strong need to produce more housing made affordable through subsidy. The reason, we wrote, is clear: "Our society is marred by inequalities of income and wealth." There is only one way to produce housing for the most vulnerable members of our society — and that is to secure stable, long-term sources of revenue for affordable-housing production at the federal, state and local levels.

SPUR was unable to reach our 60 percent threshold needed to take a position on this measure. We therefore have "No position" on Prop. B.

Prohibits current City employees from serving on most boards and commissions.

What it does

Proposition C amends the San Francisco City Charter to prohibit current City employees from serving on most boards or commissions that are created by the Charter and whose members are appointed by the mayor, or by another official or governmental body such as the Board of Supervisors.

However, the prohibition would not apply to:

• Citizen advisory committees created in the Charter;
• The Law Library Board of Trustees;
• Boards or commissions created in the charter for arts and culture departments (the Arts Commission, Asian Art Museum Board of Trustees, Fine Arts Museums Board of Trustees and War Memorial Board of Trustees), the Employee Retirement System (Retirement Board), the Health Service System (Health Service Board), the Department of Elections (Elections Commission) and the Ethics Commission
• City officers who serve as ex-officio members of charter commissions where required by the charter.
• City employees are not prohibited from serving on any boards or commissions. They are nonetheless subject to existing ethics and conflict of interest regulations that apply to all members of boards and commissions.

Why it is on the ballot

The Board of Supervisors put this charter amendment onto the ballot. Supporters of the amendment had tried to place it on the ballot in prior elections, but did not receive sufficient votes to make it onto the ballot.

San Francisco has dozens of commissions and boards. Some manage public agencies, while others are more advisory in nature. In addition to commissions for planning, building, redevelopment, public utilities, and police and fire services, there many more, including those for the airport, arts, oversight of general obligation bonds, entertainment, the environment, the Port of San Francisco, and recreation and parks and many more.

In spite of the number of boards and commissions, only a few City employees also serve on commissions.

Pros

Arguments in favor of Prop. C:

• This measure minimizes politics on some boards and commissions, since City employees may be perceived as helping politicians or themselves to advance their careers.

City employees on commissions could be compromised through workplace pressures and diminution of their career opportunities. Keeping them off of boards and commissions is a way to promote the independence of those boards.

Cons

Arguments against Prop. C:

• City employees are often the most knowledgeable people about the workings of City government. Prohibiting them from serving on boards and commissions would discriminate against a large number of highly qualified applicants.
• With the protections provided by the Civil Service system, City employees are less susceptible to political pressures than private-sector employees who are exposed to similar political forces.
• The measure does not appear equitable, because it exempts certain boards and commissions.
• This measure is a solution in search of a problem. Only a few City employees serve on boards and commissions. To the extent that people might not want to see those individuals reappointed, this measure could be a political measure those specific commissioners.

SPUR’s analysis

SPUR has long advocated for good government, built on a foundation of informed decision making, to achieve the greatest public good. It is likely that as members of City boards and commissions, City employees could be subject to lobbying and political pressures — as are other appointees, government officials and elected officials. However, all members of commissions are subject to potential lobbying and political pressures, particularly members whose employers are seeking political influence within San Francisco. Minimizing politics on boards and commissions is an important goal. But Prop. C does not apply equitably to all who wish to serve. Further, City employees should have equal participatory rights to government, as voters, candidates for elected office and members of appointed bodies. Given the depth of knowledge of the tens of thousands of City employees, it makes no sense to exclude them from the important function of serving on boards and commissions.

SPUR recommends a "No" vote on Prop. C.

Creates a planning process for Pier 70 and enables the Port to use three-quarters of future payroll tax and hotel tax revenues from tenants on Pier 70 to help finance infrastructure improvements.

What it does

Under current laws, the Port of San Francisco can finance improvements to its properties with Port revenues, property tax growth, grants, federal historic tax credits, and public-private development projects. Proposition D, a proposed amendment to the San Francisco City Charter, includes a planning process for the redevelopment of Pier 70 and provides an additional tool the Port can use for financing improvements.

The planning process for Pier 70 would begin with the Port creating a long-term financial and land use plan for the pier. Once the Board of Supervisors has approved the plan, the Port Commission would be responsible for putting it into action — but the plan still would be subject to other permits issued by the State Lands Commission, the Bay Conservation and Development Commission, and other agencies. For instance, any property leased from the Port under the plan would require the approval of only the Port Commission, plus a finding by the San Francisco Controller's Office in consultation with the Department of Real Estate that the lease is consistent with the board approved Pier 70 plan.

The second major component of the legislation is a financing tool that would permit the Port to capture the revenue from hotel and payroll taxes on Pier 70 and then to borrow against that revenue stream to pay for public improvements needed at the Pier. These improvements could include parks, environmental remediation, historic preservation and utility improvements. Currently, there are no businesses or hotels on Pier 70 and thus no revenue. Prop. D would become a tool once there are some tax paying businesses on the Pier. This revenue stream is a financing of last resort: In order for the Port to borrow against this revenue from new leases and property tax growth from development at Pier 70, the Board of Supervisors must first make a finding that this revenue itself is insufficient to finance the Pier 70 plan.

The Controller's Office would certify how much revenue the City collects through its payroll and hotel tax from the Pier 70 Waterfront District, and project annual increases in these revenues based on the development proposed by the Pier 70 plan. These projections would form the basis for a future revenue stream that could be used to pay off the debt. Then the City would appropriate monies from its General Fund to use as the basis for the Port to issue bonds for Pier 70. The money appropriated in this way could not exceed 75 percent of the projected growth in payroll and hotel taxes at Pier 70. The funding stream would be used for a maximum of 20 years — or fewer, if the Port has retired its debt or fully paid for the improvements. If the actual revenue from payroll and hotel taxes from Pier 70 is less than what was projected, there is no mechanism for the City to recapture that revenue.

Why it is on the ballot

Pier 70 is a 65-acre site in the city's central waterfront area, under the jurisdiction of the Port of San Francisco. For 150 years, the site has been used for shipbuilding and other heavy industrial activities such as the Bethlehem Steel Shipyard. Today, BAE Systems runs that site under lease from the Port. Pier 70 is one of the main sites identified along the waterfront for large-scale mixed-use development. The site is directly adjacent to a PG&E substation and the Potrero Hill power plant. It includes more than 40 historic buildings and structures eligible for listing on the National Register of Historic Places.

The Port has been engaged in a master-planning process with the following goals:

• Establish an economically viable land-use plan that retains ship repair activity.
• Expand open space and public access (the current concept has up to 20 acres of new open space).
• Upgrade nationally significant unreinforced masonry buildings throughout the site.

Prop. D was proposed by the Port to assist them in the redevelopment of Pier 70.

Pros

Arguments in favor of Prop. D:

• Pier 70 occupies 65 acres on an important location on the central waterfront. Past efforts to attract private investment to the site have failed. Prop. D would enable redevelopment and help reverse decades of disinvestment and decay.
• Prop. D would expand the menu of financial tools available for the Port to create incentives for private investment in Pier 70. Recent experience indicates that without these tools, and the private investment they bring, Pier 70 will not be reused and developed.
• The improvement of Pier 70 is critical to redevelopment of the waterfront, and would create economic and financial benefits to the area and to the City as a whole that would far exceed the cost of the public investment needed.
• The measure would provide a clear and focused process for planning for the renovation of Pier 70.
• The City cannot reasonably expect any growth in payroll or hotel taxes from Pier 70 without the tools provided by Proposition D. The past history of failed development efforts, combined with the significant historic preservation and environmental costs at Pier 70, suggest that public investment at Pier 70 is necessary.

Cons

Arguments against Prop. D:

• The build-out of Pier 70 would create demands for new City services such as transit. These services are paid for primarily through the City's General Fund. Because Prop. D would divert new payroll tax and hotel tax revenues from Pier 70, this new money would no longer be available to pay for the increase in services.
• The measure enables the Port to finance redevelopment with projected revenues, yet has no provision for the City to recapture revenue if Pier 70 redevelopment were less successful than projected. The funds appropriated to pay for Pier 70 improvements would not be readjusted based on actual tax revenues. As a result, the City could end up committing more money than it would earn.
• If special incentives and processes are needed, we should establish a redevelopment district instead, as opposed to creating special rules and processes for one site.
• Prop. D would divert revenues away from the General Fund that are needed for purposes other than the redevelopment of Pier 70.

SPUR’s analysis

This measure should be viewed in the overall historical context of the Port's efforts to renovate and rebuild the city's waterfront. Over the past 50 years, the demise of much of the city's maritime business has resulted in continued disinvestment in and deterioration of the Port's infrastructure. The Port has estimated that it needs approximately $1.9 billion in investment to rebuild needed infrastructure. Of this amount, only $800 million for these needs have been identified from existing resources, leaving a deficit of $1.