Proposition D - Renewing Library Set-aside

What it does

This proposition is a an amendment to the San Francisco City Charter to renew the current Library Preservation Fund for an additional 15 years. The Library Preservation Fund is a budget set-aside to fund library services. In a change from the current fund, this charter amendment would also allow the San Francisco Public Library to use its projected budget reserves to sell revenue bonds in order to finance the completion of the branch library program. This program involves the construction and renovation of public branch libraries.

Why it is on the ballot

In 1994, San Francisco voters passed Proposition E, a charter amendment that created the Library Preservation Fund. This measure established a dedicated fund to be used exclusively by the library to provide library services and materials as well as operate library facilities. Proposition E established a 15-year mandate that requires the City to maintain funding for the San Francisco Public Library at a level no lower than what it spent during the 1992-93 fiscal year. It also required the City to keep open a main and 26 branch libraries for a specified minimum number of hours each week.

When the Library Preservation Fund was on the ballot in 1994, SPUR did not support the measure, citing concerns with budget set-asides. Since then, SPUR has often supported - and sometimes has proposed - additional set-asides for important social goals such as public transit.

In 2000, San Francisco voters approved a $106 million library bond and the San Francisco Public Library began the largest building campaign in its history. The bond called for 19 branches to be renovated, four leased facilities to be replaced with new City-owned buildings and a new branch library to be built in Mission Bay. The new library opened at Mission Bay July 8, 2006. Other new and renovated libraries include the Excelsior, West Portal, Sunset and Marina branch libraries, as well as the Glen Park branch set to open Oct. 13. Four branches are under construction and four other branches will soon be under construction. An additional eight branches are in various stages of design.

Pros

Those who support this measure claim:

• A set-aside for library services protects the library from the instability and politics in the City's annual budget process. In the past, politicians routinely failed to adequately fund the library, leading to staff cuts, the reduction of its materials budgets and reduced service hours, particularly during the lean budget years of the early 1990s.
• Since its passage in 1994, the Library Preservation Fund has resulted in expanded library services, new technology and increased staff.
• This measure also gives the City the ability to secure funds (through revenue bonds) for capital improvements needed to complete the Branch Library Improvement Program without going to voters again for general-obligation bond funding. This new method of funding capital improvements, which is incorporated into the City's 10-year Capital Plan, is entirely appropriate for a department that already has the assurance of a funding stream and allows for capital upgrades without reducing funding for other capital needs.
• This measure includes the best elements of budget set-asides - it is time-limited (15 years), tied to revenues (so it goes up and down with the overall economy and budget), and includes outcome measurements.

Cons

Those who oppose this measure claim:

• The existing Library Preservation Fund is in place until 2009, thus making it not necessary to put on the ballot two years ahead of time.
• Despite a major increase in funds to the library system, there has been a minimal increase in library hours after the initial increase immediately after the library fund was approved in 1994.
• The Library Preservation Fund does not allow for sufficient accountability for how the budget set-aside is spent or which outcomes the library needs to achieve.
• There are serious questions about budget set-asides, of which the Library Preservation Fund is only one.
• Set-asides lock in spending for special purposes, but elected officials should have the authority to determine priorities. The budget already contains a high proportion of restricted funds, leaving elected officials with only a small amount of discretionary funds to meet the city's needs.
• Set-asides such as the Library Preservation Fund reduce the possibilities of proper oversight by the Board of Supervisors and the mayor on such issues as whether the amount provided to the library is actually providing the services that San Franciscans want and need.

SPUR's analysis

Prop. D would continue the dedicated funding the library has been receiving since 1994. If approved, Prop. D would replace the existing library fund and take effect in the fiscal year of 2008-2009 to continue for 15 years.

The Library Fund is a budget set aside for library services. While most city departments receive their funding through the regular budget process, a budget set-aside provides a formula to calculate the amount of funds that are required - at a minimum - to be appropriated to a particular department.

In the case of the library there are two sources of funds. First, the library receives a share of the city's local property taxes. The amount that goes to the library from the property tax levy is calculated based on $0.025 for each $100 assessed property valuation. Second, the library receives funds from the discretionary portion of the City's General Fund. The amount that goes to the library is based on the Controller's Office's estimate of total discretionary funds but not less than the amount appropriated for fiscal year 2006-2007 which amounted to $42 million.

Because of these two sources of funding, the library set-aside is "revenue driven." That is, the amount of money from property taxes depends on the total tax revenue collected by the City, which in turn is based on the strength of property values and the frequency of property resale and reassessments. The library set aside also maintains a baseline of funding. However, the funding towards the library could go below the baseline amount under some circumstances if total discretionary revenues to the City were to decrease.

In general, the purpose of Prop. D is to provide sufficient revenue to operate 27 branches and the Main Library and to provide operating hours and services equivalent to what was provided in fiscal year 2006-2007.

Among the City services with set-asides, the library system is among the most widely used services. In 2006, there were more than 4 million visitors to the San Francisco library system. In addition to providing traditional access to books and materials, the City's libraries also serve as community centers offering a broad selection of services including teen and early literacy programs, Internet and wireless access, online reference and databases, as well as public instruction.

This charter amendment requires the library to meet certain outcomes - which are the same as for the existing Library Fund. The library must remain open a minimum of 1,211 service hours per week systemwide (a 53 percent increase from the level of 1994 hours when the original Library Preservation Fund was passed) and is required to operate a Main Library and 27 branch libraries, which includes the addition of the new Mission Bay branch. Funding for library collections and services must also be maintained.

The 1994 Library Preservation Fund has helped expand hours, increase books and materials, improve the quality of technology, and hire certified librarians in every branch. Since its passage, the Preservation Fund helped expand the library's service hours from a level of 801 hours per week in 1992 to 1,211 hours per week in 2007. The Library Preservation Fund has helped increase the book and materials budget by 400 percent, has added more than 500 computers, and has provided registered librarians in every branch. Each branch library is open on Saturday, staggered branch hours provide systemwide open hours four nights per week, and 10 libraries now offer Sunday hours.

A new provision would allow the library, with the agreement of the mayor and the Board of Supervisors, to issue revenue bonds or other debt obligations to be used for real-property improvements. Those debts would be repaid from the Library Preservation Fund.

The fund also incorporates several levels of scrutiny, including a community input process. This would be established no later than March 1, 2013, based on supervisorial districts. The meetings will assist the Library Commission in developing criteria for service hours. This process would be repeated at least once every five years. At the conclusion of the process, the Library Commission may modify the service hours for the next interval.

Despite our reservations about budget set-asides, this measure is a renewal of an existing set-aside for a crucial city service that has demonstrated measurable, positive results. This measure also includes a new provision that allows the library to sell revenue bonds to fund capital improvements. For a department that has a healthy and relatively certain budget, this is an appropriate means of meeting capital requirements. In the future, SPUR expects to adopt a set of policies that help us in our evaluation of set-asides. Developing a set of principles will not only help SPUR in our analysis but may also help potential drafters of new set-aside measures.

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