Ed Lee

Airbnb must work with SF

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EDITORIAL

Airbnb and other companies that facilitate illegal short-term apartment rentals to tourists visiting San Francisco need to engage in a more honest and direct dialogue with this city’s political leaders and stakeholders, something that became clear during last week’s Planning Commission hearing on legislation that would legalize and regulate short-term sublets.

This is a complicated, vexing issue that defies simple solutions, as Board of Supervisors President David Chiu learned as he and his aides spent more than year developing the legislation. They did a pretty good job at striking a balance between letting people occasionally rent out their homes and preventing Airbnb from being used to remove apartments from the already strained local housing market.

A key provision for striking that balance was to limit rentals to no more than 90 nights per year, but the Planning Commission — dominated by appointees from Mayor Ed Lee, who has long coddled Airbnb’s scofflaw approach to the city (see “Into thin air,” 8/6/13) — removed that provision, which the Board of Supervisors should reinstate.

The commission also seemed to side with landlords who want to prevent their tenants from renting out rooms, calling for landlords to be notified when their tenants seek to become Airbnb hosts, another provision the board should reject. Landlords using Airbnb to get around rent control laws is at least as bad as tenants who violate their leases by subletting rooms, and this legislation shouldn’t favor one group over the other.

If the city decides to end its decades-old ban on short-term apartment rentals, it should have a compelling reason to do so. Maybe we want to allow struggling city residents to make some extra money while they’re out of town, or to have some flexibility in renting out rooms without taking on permanent tenants, which are legitimate if difficult policy questions.

But it seems like much of the discussion is about how to rein in the widespread violation of city housing and tax laws caused by Airbnb, which has refused requests to share more of its occupancy data, dodged its obligation to collect the city’s transient occupancy tax, and failed to even send a high-level representative to last week’s hearing. Yet the legislation would require the company’s cooperation to help enforce the regulations.

If Airbnb and its hosts want the city to legalize lucrative short-term rentals in San Francisco, then the company should be willing to engage in high-level public discussions with city leaders to shape this important legislation, rather than simply whipping its hosts into a libertarian frenzy with deceptive public relations campaigns.

Airbnb CEO Brian Chesky has gotten rich with a business model that is illegal in its home city, so the very least he can do is show up at City Hall next month to make a good faith effort to help solve the divisive problems that his company is creating.

 

Chiu’s proposed Airbnb regulations clear Planning Commission

Board President David Chiu’s proposed legislation regulating short-term rentals facilitated by tech companies Airbnb and VRBO won approval from the San Francisco Planning Commission on Aug. 7.

At the start of a public hearing, Chiu gave an overview, explaining that it would allow permanent residents – defined as San Franciscans dwelling in the city for at least nine months out of the year – to legally post their residences for short-term rent up to 90 days out of the year, legitimizing a practice that is technically prohibited under a city law prohibiting rentals of less than 30 days.

Under the proposed regulations, hosts would be required to register with the city, pay all associated taxes and sign up for liability insurance.

Anyone in violation, for example by posting a unit on Airbnb.com without registering, could be subjected to fines. While Chiu noted that he thought short-term rentals ought to be regulated to limit the threat Airbnb rentals pose to affordable housing in pricey San Francisco, he sought to strike a balance, saying, “Home sharing has allowed struggling residents to live in our expensive city.”

Public comment on the measure lasted for several hours. A host of speakers came out to share stories about how short-term rentals had helped them earn supplementary income and remain in San Francisco (as the Guardian previously reported, Airbnb sought to line up supporters via an online campaign effort called Fair to Share).

Yet opponents of the measure raised concerns that the new rule legitimizing short-term rentals via Airbnb could exacerbate San Francisco’s tremendous affordability crisis, by allowing residential spaces to be further commodified.

“There’s no hope we’re going to be able to control the adverse impacts of this legislation,” said Doug Engmann, a former planning commissioner. “This ill-conceived way of rezoning the city … causes all sorts of problems about how you’re going to be able to regulate this going forward.”

Ian Lewis, of hotel workers’ union Unite Here Local 2, warned of the impact on those employed by the city’s hotel industry.

“This legislation in one fell swoop is a green-light to legalizing short-term rentals,” said Lewis. “No one is more affected by this than hotel workers.”

Land use attorney Sue Hestor warned that Mayor Ed Lee’s proposal to construct 30,000 housing units “will be a farce … without a requirement that they really be rented or occupied as housing,” and suggested prohibiting the new units envisioned under this plan from being listed as short-term rentals on Airbnb.

Others raised concerns about the regulation’s lack of enforceability, and were critical of the provision allowing for 90 days of short-term rentals (many believed it was too permissive, but advocates who came out expressing support for Airbnb said it should be increased to 180 days).

The Board of Supervisors will take up the legislation in September after returning from August recess.

Alternative event to National Night Out shifts focus away from surveillance

Aug. 5 marks National Night Out, an annual event promoted by local governments and law enforcement agencies geared toward ending neighborhood violence and promoting public safety.

In San Francisco, Mayor Ed Lee is scheduled to join Police Chief Greg Suhr and District Attorney George Gascon at a Visitacion Valley playground for a National Night Out gathering. A host of other neighborhood block parties are scheduled throughout San Francisco and Oakland as well.

National Night Out gatherings, which are sponsored by the National Association of Neighborhood Watch, are scheduled to take place nationwide. Block party attendees are encouraged to come out and meet their neighbors as a way of banding together against crime. Yet some have questioned the heavy emphasis this event places on suspicion and surveillance as tools for promoting neighborhood safety.

To offer a different perspective, the Ella Baker Center for Human Rights has organized a community gathering Aug. 5 at the Lake Merritt amphitheater, billed as the Second Annual Night Out for Safety and Democracy.

“We still want to have a celebration of the community – but we really want to reframe the message that it’s not all about setting up a neighborhood watch program,” said Maria Dominguez, a community organizer with the Ella Baker Center. She added that a mass effort to encourage suspicion and neighborhood surveillance can lead to unintended consequences, such as actions that are unnecessarily based in fear, or racial profiling.

Instead, the Ella Baker Center hopes to emphasize restorative justice practices, youth job training programs, and reentry services as tools for promoting community safety. The group is also highlighting the need for more resources to be dedicated toward these programs as state funding becomes available.

“Safety really goes hand in hand with the lack of economic opportunity in our communities,” Dominguez said. This coming fall, she noted, the Alameda County Board of Supervisors will begin discussing allocation of some $30 million in state realignment funding. Historically, only about a fourth of this has gone toward community-based organizations focused on efforts such as reentry services, with the rest being devoted mainly to law enforcement agencies.

“We want to make sure there’s more funding allocated for community based organizations providing restorative justice initiatives, and other organizations that focus on employment and workforce development opportunities,” Dominguez said.

“With the recent rise in local surveillance initiatives and private patrols, it’s more important than ever to encourage neighbors to build connections with one another so that they can see each other,” said Ella Baker Center executive director Zachary Norris, “rather than watch each other.”

The evening’s event will feature talks by practitioners in restorative justice practitioners and representatives from organizations working around reentry programs. There will also be food, art, voter information, and a performance by Turf Feinz. They’re turf dance performers whose moves – consisting of “elaborate footwork, gliding, gigging, contortion and acrobat,” according to the event description – have been known to liven up BART commutes. 

“Rain,” Turf Feinz’ video from 2009 created in memory of a friend, got more than six million YouTube hits.

Arguments against minimum wage increase are out of touch

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EDITORIAL

“Will the SF minimum wage hike kill our restaurants?” Zagat SF tweeted last week.

No, Chicken Little, it won’t. Not even if you tweet it.

Two days earlier, the Board of Supervisors had unanimously approved a measure for the November ballot to raise the city’s minimum wage to $15 an hour by 2018, up from where it stands at $10.74.

Zagat may be fine for restaurant reviews, but this attack on raising the minimum wage — which parroted fearmongering about high-priced burgers and relied heavily on a narrative served up by a powerful business lobby, the Golden Gate Restaurant Association — was enough to cause heartburn.

And it’s only one example of the backlash directed at low-wage workers since the bid to boost the minimum wage has picked up steam. A now-infamous billboard that popped up in SOMA, funded by conservative lobbying group Employment Policies Institute, taunted minimum-wage workers by claiming they would be replaced with iPads if they didn’t give up the fight for higher pay.

The proposed minimum wage increase, actually a compromise that turned out weaker than an initial proposal spearheaded by a progressive coalition that would have delivered $15 an hour a year earlier, is backed by business-friendly Mayor Ed Lee. Even the San Francisco Chamber of Commerce has expressed support for it. Still, some conservative interests seem bent on ensuring that minimum-wage workers never achieve living-wage status — demonstrating how out of touch these naysayers are.

Once better known for its rich labor history and track record of holding employers accountable for wage theft and discriminatory practices, San Francisco is better known these days as one of the nation’s highest-ranking cities for income inequality.

Scraping by at a minimum wage job translates to a stressful existence. Even if minimum-wage earners were currently earning $31,000 a year, the amount a full-time $15-an-hour job would bring in before taxes, it wouldn’t begin to stretch far enough to rent a market-rate apartment. Earlier this year, the National Low Income Housing Coalition pointed out that a renter’s got to earn at least $29.83 an hour — or $62,046 annually — to afford a San Francisco one-bedroom at market rate.

Meanwhile, those spouting doomsday scenarios over a higher minimum wage seem blind to the fact that the city is regularly populated with hordes of tourists and well-compensated San Francisco professionals with a penchant for fine food, even if it’s pricey.

Just for a sense of how much cash is pumping through the local economy, the San Francisco Center for Economic Development reports that San Francisco claimed 40 percent of all venture capital investment in the Bay Area last year, with nearly $5 billion in VC funding invested in 2013. Meanwhile, 16.5 million visitors flocked to the Bay Area last year — can anyone really claim with a straight face that a higher minimum wage for restaurant workers will prevent this army of tourists from chowing down at local restaurants?

Instead of having a debate about whether we ought to raise the minimum wage, a better conversation would focus on the consequences of allowing the city’s sharp inequality to continue unchecked.

Mayoral meltdown

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joe@sfbg.com

When he launched an unexpected mayoral bid in 2011, Mayor Ed Lee campaigned on a platform of changing the tone of San Francisco politics. The appointed mustachioed mayor claimed he put the civility back in City Hall, marking a sharp departure from the divisive tone of city politics as progressives battled former Mayor Willie Brown, followed by Mayor Gavin Newsom.

“We’ll continue the high level of civility in the tone we’ve set since January, and solve the problems with civil engagement,” he told Board of Supervisors President David Chiu, then his mayoral opponent, at a 2011 debate.

Yet over the past two weeks, Mayor Lee has started swinging hard against supervisors who have introduced measures that go against his own priorities. So much for civility at City Hall.

 

COMPROMISE EVERYTHING

When asked about the outcome of her newly revised affordable housing measure, Sup. Jane Kim did not sound enthusiastic.

“It was definitely a compromise,” Kim said. But compromise is a word you use when you find a middle ground. By most accounts, Mayor Lee weakened the measure by hammering the right pressure points.

Kim crafted a novel solution to the city’s housing affordability crisis for the November ballot. Her initial Housing Balance Requirement would have established controls on market-rate housing construction, requiring a reevaluation whenever affordable housing production falls below 30 percent of total construction. The goal was to ensure that a certain amount of affordable housing would be built — but it was unpopular with housing developers.

Lee immediately drummed up a ballot measure in opposition to Kim’s, the Build Housing Now Initiative. The nonbinding policy statement asked the city to affirm his previously stated affordable housing goals. So what was the point?

It contained a poison pill which would have killed Kim’s Housing Balance Requirement. If Lee’s measure was approved, Kim’s would fail. The two politicians were in heated negotiations, trying to diffuse this ballot box arms race up to the very moment Kim’s measure went before the Board of Supervisors for approval at its July 29 meeting.

By the end of that process, Kim’s measure had been gutted.

Mirroring the mayor’s Build Housing Now Initiative, the new Housing Balance Requirement is a nonbinding policy statement asking the city to “affirm the City’s commitment” to support the production or rehabilitation of 30,000 housing units by 2020, with at least 33 percent of those permanently affordable to low or moderate income households.

Kim said she’d won funding pledges and promises for a number of affordable housing projects from the mayor. But Lee did not sign any agreement.

Essentially, the revised measure is a promise to promise, a plan to plan. Kim told us flatly, “We didn’t get the accountability we wanted.”

Political insiders told us the Mayor’s Office put pressure on affordable housing developers, who backed the original measure but later asked Kim to revise it to reflect the mayor’s wishes. The Mayor’s Office allegedly threatened to cut their funding next year, or divert projects to other affordable housing organizations.

Everyone acknowledged the mayor was pissed.

Tenants and Owners Development Corporation, an affordable housing developer in SoMa, sat in on the negotiations. The city paid $170,961 in contracts to TODCO last year, according to the City Controller, and over $250,000 the year before. John Elberling, president of TODCO, and Peter Cohen, co-director of the Council of Community Housing Organizations, denied the mayor influenced them to ask Kim to revise her measure.

“I didn’t hear my phone ringing saying we’ll pull funding for affordable housers if you don’t do X, Y and Z,” Cohen told us. Yet he acknowledged the mayor “brought certain leverages to bear” in the closed-door negotiations to “compromise” on Kim’s ballot measure. Then everything changed.

“Yes,” Cohen said, “we then convinced the lead supervisor to change her position.”

Despite being labeled as a “compromise,” many observers read this as a sign that Lee had prevailed. Now the same hammer is coming down on Sup. Scott Wiener.

 

BALLOT BATTLE

“I agree with the mayor on many things,” Wiener told us. But the mayor is targeting Wiener’s new Muni funding ballot measure, hoping to knock it off the ballot.

“It’s not personal,” Wiener said. “It’s a policy disagreement.”

The mayor has a transportation bond on the ballot, asking voters to pony up $500 million to fund Muni. But Lee already blew a $33 million hole into Muni’s proposed budget when he decided to pull a Vehicle License Fee measure off the ballot. When that measure began to poll badly, he got cold feet, and withdrew it.

The San Francisco Municipal Transportation Agency’s budget outlined a doomsday scenario if the funding ballot measures failed to pass. It would be impossible to improve transit travel time, reliability, or to fund pedestrian and bike safety projects, the SFMTA staff noted in recent budget presentations.

Seeing the potential fallout due to the mayor pulling the VLF measure, Wiener placed his own measure on the ballot, tying expansion for Muni funding to the city’s growing population. If passed, Muni could see a $22 million bump just next year.

Openly, the mayor told reporters he would hold the supervisors who supported Wiener’s ballot measure “accountable.” Lee then initiated a conversation about slashing funding to city programs, signaling that supervisors’ favored projects could be jeopardized.

“Last week, the Board of Supervisors sent a measure to the ballot that the budget does not contemplate,” Kate Howard, the mayor’s budget director, wrote in a memo. She directed departments to cut their budgets by 1.5 percent, and asked for “contingency plans” including a “revisit” of hiring plans and scaling back existing programs and services.

Wiener issued a statement describing the move as “an empty scare tactic.”

“For whatever reason,” he wrote, “the Mayor’s Office felt the need to issue these emergency instructions now — a full year before the fiscal year at issue, in the middle of an election campaign, without even knowing whether the measure will pass.”

John Elberling, president of TODCO, recalled when then-Mayor Willie Brown used the same schoolyard-bully tactics to ensure his favored measures passed.

“The punchline is there were competing ballot measures, one from our side and one from Willie’s side,” Elberling told the Guardian. “There was an effort to reach a compromise, but that failed. I was in the meeting where he shot it down.”

“He said ‘I will make the decisions,’ quote unquote. ‘There is no compromise unless I say there’s a compromise.’ That was quite memorable,” Elberling recalled.

When things didn’t go his way, “Willie Brown took a housing project away from us,” Elberling said.

But Mayor Lee’s bluster and anger is new, and Elberling said it should be taken with a grain of salt. “Is it a bluff? That’s always a question. Real retaliation like Willie did, that’s a real thing. But huff and puff, that goes on all the time.”

 

Read the memo detailing Mayor Ed Lee’s punishment of supervisors who supported Muni

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The story is snowballing.

Mayor Ed Lee is furious at supervisors who voted for Sup. Scott Wiener’s Muni funding measure, and told reporters Monday he would hold them “accountable.”

News of the mayor’s retribution has circled round, and the timing of a memo issued by Kate Howard, the mayor’s budget director, has raised eyebrows. The memo directs city departments to prepare for budget cuts she said are called for due to Wiener’s measure.

The Guardian has obtained the memo and is embedding it below.

“Last week, the board of supervisors sent a measure to the ballot that the budget does not contemplate,” Howard wrote. “As a result of this unanticipated measure, the Mayor’s Office is directing departments to propose contingency plans that could be implemented should the measure pass.”

Howard is referencing Wiener’s new Muni funding measure, which would raise the transit agency’s funding with the population. The cost is estimated to be about $22 million annually.

Now it seems the mayor is playing for keeps. Following through on his promise to hold supervisors “accountable” for supporting Wiener’s measure, Howard directs city agencies to prepare to make cuts to new programs, hiring plans, and to “scale back existing services.”

But what Howard’s memo doesn’t say is that Muni has its own budget problems, caused not by Wiener’s new ballot measure, but by Mayor Ed Lee.

It’s really a case of the pot calling the kettle black: Lee is saying Wiener’s ballot measure will hurt the General Fund, but supervisors contend Lee hurt Muni’s budget when he pulled his Vehicle License Fee measure off the ballot.

Wiener’s new Muni funding measure was a contingency plan after Lee dropped the VLF, which blew a $33 million hole in Muni’s proposed budget.

The SFMTA outlined the consequences of a failure to pass multiple ballot measures (of which the VLF was one) in its proposed 2015/16 budget. The proposed cuts are a doom and gloom list that would make any Muni rider cut up their Clipper Card in disgust. 

 The agency said such an outcome would make it impossible to improve transit travel time and reliability, and fund pedestrian safety projects. It would also mean fewer buses and lightrail vehicles, a decline in existing infrastructure, and less funding for bicycle infrastructure, among other problems.

In other words, without ballot measures to increase Muni funding, the SFMTA is screwed. 

But when Lee’s license fee measure initially polled poorly, he got cold feet and yanked it. Yet he continued to push forward with a $500 million transportation bond measure, which remains on the ballot. Now he’s feverishly hoping to stop any competing ballot measures which may have the remote possibility of hurting its chances to succeed. 

I agree with the mayor on many things,” Wiener told the Guardian. But, “ultimately the mayor is elected and I have to exercise my best judgment. It’s not personal, it’s a policy disagreement.”

We asked Sup. David Campos if there’s a fear that these cuts would only hit projects the supervisors favor.

“I think there’s definitely that fear,” he told us. But he noted something important.

“When we’re talking about punishing, you’re not punishing a supervisor, you’re punishing a district they represent,” he said. “Ultimately, you’re punishing constituents.”

Still, at this point, it’s not entirely clear the directives from Howard will target specific supervisor’s projects. 

“We’re concerned,” Campos said, “but we need to ask the budget director what this means.” 

Update [8/1]: Supervisor Scott Wiener sent an email to press today giving further backstory on the memo from Kate Howard regarding the budget.

From his email:

On Wednesday, in what can only be described as an empty scare tactic, the Mayor’s Office announced that due solely to the transit measure (totaling .25% of the budget), all departments were directed to formulate emergency 1.5% contingency cuts for the 2015/16 fiscal year. The Mayor’s Office further indicated that the cuts will be directed at the “priorities” of the six Supervisors who voted to place the measure on the ballot.

For whatever reason, the Mayor’s Office felt the need to issue these emergency instructions now – a full year before the fiscal year at issue, in the middle of an election campaign, without even knowing whether the measure will pass, and regarding an amount of money that is tiny in the context of the budget. Moreover, there will be a full budget process next spring for the 2015/16 fiscal year, and if the measure passes, the $22 million at issue will simply be part of that budget.

What the Mayor’s Office neglected to mention in its announcement is the existence of a $32 million hole in MTA’s budget for the 2015/16 fiscal year. If this gap isn’t filled – and [Supervisor Wiener’s] measure will fill two-thirds of it – MTA will have to forego plans to purchase new vehicles, rehabilitate run down vehicles, replace failing train switches and signals, rehabilitate broken station elevators, make needed pedestrian safety improvements, and implement the Embarcadero Bikeway.”

Kim’s affordable housing ballot measure gutted then approved

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Housing is out of whack in San Francisco, and Sup. Jane Kim’s affordable housing ballot measure would’ve gone a long way towards fixing it. But that was then. Now, things are more uncertain. 

At yesterday’s [Tues/29] Board of Supervisors meeting, the board unanimously approved Kim’s Housing Balance proposal. But this was not her original ballot measure: it was gutted. Or as Kim told the board, “We were not able to come to an agreement on everything I wanted to see.”

Her originally proposed ballot measure required new housing developments to provide 30 percent affordable housing, with an opt-out mechanism possible through a hearing. Currently, developers can provide on-site affordable housing or pay money into a pot of affordable housing funding. That’s the system we’ve got now, and you can check San Francisco’s soaring rents and home prices to see how well that’s working out.

The 30 percent requirement was a strong, clear ask which may have spurred much-needed housing for middle and lower-income San Franciscans. Too strong, apparently. 

Kim’s negotiations with the affordable housing community and Mayor Ed Lee hit more than a few snags, sources told us. The mayor, frankly, didn’t like it. 

We reached out to the Mayor’s Office but didn’t hear back from them before press time. But it doesn’t take a soothsayer to see the mayor wanted the measure dead: He sent a strong signal by creating a rival ballot measure, which, if approved by voters, contained a “poison pill” which would’ve killed Kim’s measure.

We were still negotiating down to the last minute what we’re announcing today,” Kim told the board. 

Kim’s new ballot measure no longer includes the 30 percent affordable housing requirement. In exchange for dropping the strong mandate, Kim said she wrested a number of concessions from the mayor, including: 

 

  • Pledges of a 33% affordability housing goal for all new development in Central SoMa and future area plans
  • Interim planning controls in the Central SoMa to prevent displacement in advance of the approval of the Central SoMa Plan
  • The creation of a Neighborhood Stabilization Trust to fund Affordable Housing Acquisition & Rehabilitation program
  • Commitment to identify new revenue to accelerate affordable housing projects languishing in the City’s pipeline and land acquisition strategies, including tiered in-lieu fees
  • Pledges to find sufficient funding to jumpstart public housing rehab and HOPE SF –without tapping the Affordable Housing Trust Fund
  • A legislative path forward to continue goals of Housing Balance Act, including unit count

 

Peter Cohen, co-director of the San Francisco Council of Community Housing Organizations, put the compromise this way: What the supervisor ended up doing [through negotiation] is forcing the city to commit itself to substantive policies for real action, in exchange for that conditional use trigger [contained in the original legislation, which would have subjected market-rate projects to addition scrutiny when affordable housing dropped below 30 percent].”

“Obviously,” Cohen said, “some people think thats a bad tradeoff.”

So Kim lost the 30 percent trigger, but gained a number of compromises. So were they a big win for affordable housing advocates? 

Sources told us the Neighborhood Stabilization Trust is a long sought-after goal of the affordable housing community, but so far no plans have been revealed about how the trust (or any of the other proposals) would be funded. The ballot measure may offer Kim some leverage to make sure those promises are funded by Lee, especially considering San Francisco’s impending 2015 mayoral race. 

We’re presenting [voters] a ballot measure that constitutes our core values and memorializes the agreement,” Kim told the board. “Housing balance had a large journey, and it does not stop today. Thirty percent: this is a goal we should commit to as a city. Our voters want this.”

Earlier Tuesday, Kim stood with Lee at the unveiling of 60 new affordable housing units on Natoma street. Now, without a mandate, the only guarantee the city will build more affordable housing is the mayor’s word.

Article details bullying and retribution by the Mayor’s Office

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People are talking about this article from Sunday’s San Francisco Chronicle about how much three fall ballot measures will cost the city, but many progressives and political outsiders are more focused on the juicy details lower down in the article about the spiteful, bullying political tactics practiced by the Mayor’s Office these days.

Mayor Ed Lee and his top aides are said to be “fuming” that Sup. Scott Wiener and five of his colleagues placed a measure on the fall ballot that would give Muni more money as the city’s population increases — and that “the mayor’s office seems to be hinting that it will target programs important to the six supervisors who voted to place Wiener’s proposal on the ballot.”

The measure is retroactive to 2003, the last time Muni had an increase in its funding from the city General Fund, so it would mean an immediate funding bump of $20 million or more, which the mayor is disingenuousnessly casting as budget buster. Keep in mind this same mayor unilaterally ended Sunday meters this year, costing Muni about $10 million a year, and supports corporate welfare programs that cost the city $17 million last year.

This spiteful and retaliatory approach to public policy by Lee, the elected official with the most control over the city’s pursestrings, and his minions was also a big factor in Sup. Jane Kim’s capitulation to the Mayor’s Office on her housing balance measure. Sources tell the Guardian that affordable housing advocates were threatened with reduced city funding from the Mayor’s Office if they continued to push for Kim’s original measure.

The Chronicle article was based largely on a Controller’s Office memo claiming the three ballot measures — the Muni measure, a proposal to increase the minimum wage to $15 by 2018, and reauthorization of the Children’s Fund — would be the “largest voter-directed increase in general fund spending in a single election in city history,” costing $104 million by 2018.

More than half of that is from the minimum wage increase, which will increase the city’s cost of contracting low-paid nonprofit workers to perform public services. But in this increasingly expensive city, does anyone really think $15 per hour is an unreasonable wage? Should the city itself be exploiting workers?

After the city recently slashed building and planning fees charged to developers, and in a city that continues to coddle big corporations and landlords rather than tax them fairly, the Mayor’s Office ire over policies that help low-wage workers and Muni riders is particularly telling of its values and priorities.  

Exposing PG&E’s other “cozy relationship,” with Mayor Ed Lee

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News outlets from Sacramento to Los Angeles are crowing about Pacific Gas & Electric Company’s alleged “cozy relationship” with the utlity that oversees it, the California Public Utilities Commission.

At least 41 emails obtained by the city of San Bruno reveal an intimate, friendly arrangement between the monopolistic power company and the regulators that are supposed to keep them in line. Where the public would expect a separation as hard and fast as church and state, the emails reveal a buddy-buddy relationship.

This is of no surprise to long-time Guardianistas, who may remember Rebecca Bowe’s cover story three years ago “The secret life of Michael Peevey, [5/11]” chronicling the CPUC president’s extravagant trips to Madrid, Spain and Germany with top energy officials, as well as other activities that may seem strange for an official who’s supposed to be a watchdog against PG&E malfeasance.

But if world-trekking trips to pricey hotels aren’t enough to raise eyebrows about the relationship between PG&E and its regulators, now we have suspicious emails to add to the pile.

As the San Jose Mercury News revealed:

In an April 2013 email, Carol Brown, chief of staff for Commissioner Peevey, wrote to PG&E executive [Laura] Doll and offered advice about how to handle one of the proceedings related to the San Bruno explosion. In the email, Brown said she had talked to one of the PUC administrative law judges about the matter.

“Send back a sweet note” to the PUC about the matter “and then wait for them to throw a fit” was part of Brown’s advice. Brown also said she was “happy to chat” about the matter with PG&E to help guide company officials through the PUC process.

Doll replied to Brown, “Love you. Thanks.”

Even Peevey himself emailed PG&E, offering them public relations advice. It’s like an umpire sneaking around between innings to coach a first-baseman — unseemly, and totally strange.

All of this should ring alarm bells in The City. The city of San Bruno obtained the emails through settlement of a lawsuit, which are now revealing potential corruption at top levels of the CPUC. But here in San Francisco, Mayor Ed Lee flouts public records laws and, as we revealed, drafted a policy allowing him to delete his own emails.

There’s no way we can check what Lee is saying to PG&E in emails, making exposing any alleged “cozy relationship” much more difficult than PG&E’s alleged romance with the CPUC.

And the consequences for The City are very real, as well as potentially fatal. As we’ve covered before, there are PG&E pipelines aplenty in San Francisco (including one right along Bernal Hill). When San Bruno’s pipeline exploded, eight lives were lost and many more homes destroyed.

As the San Francisco Chronicle reported last month (and as we’ve said for years), Lee already has suspiciously close ties with PG&E.

From the Chronicle:

However, multiple city officials say that Lee’s administration has consistently, and quietly, raised objections about legislation and policies that PG&E opposes. They also point to the utility’s charitable giving to the city and some of Lee’s pet projects as an example of how PG&E tries to exert its influence.

Critics of Lee’s relationship with PG&E extend from the political left to at least five current and former high-level city officials. In some cases, several of the sources said, that relationship appeared to be inappropriate. PG&E officials regularly went to the mayor’s office when they were unhappy with city staff members, said the sources, who requested anonymity because of their relationship with the mayor.

“They were in his office all the time, meeting with either the mayor or his staff, and seemed to directly intervene in city decisions,” said one official. “It isn’t normal for most businesses in the city to always have meetings with the mayor.”

Lee, in several interviews, dismissed the idea that he was doing PG&E’s bidding as “a little off base.”

“I look at PG&E like any other company in the city,” Lee said. “I don’t think I have any special relationship with them.”

But in the case of the mayor, we may never know how close he is with the utility, as long as his off-kilter public record laws allow him to delete any paper trail. The CPUC is discovering what Lee long ago learned from former-Mayor Willie Brown: The “E” in e-mail stands for “evidence.”

tearing up emails

Housing ballot measures would weaken city policy

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EDITORIAL Under the misleading guise of encouraging the development of more affordable housing in San Francisco, Mayor Ed Lee and Sup. Jane Kim have sponsored a pair of fall ballot measures that actually weaken existing housing policy in San Francisco. It’s a ruse that shouldn’t fool politically savvy San Franciscans.

Lee has the authority to place his Build Housing Now measure on the ballot, although he may withdraw it under his backroom deal with Kim. But the Board of Supervisors should reject Kim’s City Housing Balance measure, a once-promising proposal that she last week made toothless and counterproductive. What she called a “compromise” was actually a capitulation to developers and the Mayor’s Office [Editor’s Note: The board was scheduled to consider Kim’s measure on July 29 after Guardian press time, which is why we posted this editorial early at sfbg.com, where print readers can check for an update].[UPDATE: The board unanimously approved the amended measure.]

Kim’s original measure called for market-rate housing developers to get conditional use permits and perform additional economic studies on their projects when affordable housing production falls below 30 percent of total production. She then weakened it with several exemptions, yet it was still a check against runaway development of luxury housing.

But her new measure, much like Lee’s, is little more than a wishful policy statement calling for the city to seek the goal of 33 percent of housing affordable by moderate income San Franciscans and below (usually defined as those making 120 percent of area median income or less) and 50 percent by the more vaguely defined “working middle class.”

While neither measure includes any enforcement or funding mechanism to help reach that goal, it’s noteworthy that the goals themselves weaken those the city set for itself in the Housing Element of the General Plan, which call for 60 percent of new housing construction to be affordable to those with moderate incomes and below. The board adopted an amended version of this Housing Element just last month.

This is politics at its very worst: Politicians claiming to be doing one thing in order to score points with voters and appear responsive to their concerns, while they actually do just the opposite and try to disguise that fact with disingenuous rhetoric.

Kim’s allies in the labor and progressive political communities tell us they’re disappointed in her capitulation at such a crucial moment in determining whether San Francisco becomes a city of the rich or whether it can retain its socioeconomic diversity.

We were also disappointed, although we weren’t surprised. There’s an ugly, money-driven brand of politics being practiced at City Hall these days, and Kim has repeatedly shown herself to be more concerned with her future political prospects than living up to the progressive values she has long espoused.

Will San Francisco voters give Muni more money to serve a growing population?

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Beating up on Muni and the San Francisco Municipal Transportation Agency is a perennial pastime for many San Franciscans, who will be given the opportunity to put their money where their mouths are this November. Will they be willing to give Muni the money it needs to serve its growing ridership, even at the cost of other city programs and priorities?

The Board of Supervisors yesterday [Tues/22] voted narrowly to place Sup. Scott Wiener’s Muni funding measure on the fall ballot. It would increase General Fund contributions to the SFMTA as the city population increase, retroactive back to 2003 when the current rate was set, giving the agency an immediate $20-25 million boost to serve the roughly 85,000 new residents the city has added since then.

“For too long City Hall has been slow to prioritize transit funding,” Wiener said in a press release. “We are a growing city, and we need to take firm steps to ensure that our transportation system keeps up with that growth.  Improving transit reliability and capacity and making our streets safer are key to that goal.”

While everyone says they support Muni — even David Looman, the proponent behind the Restore Transportation Balance initiative that seeks more SFMTA funding for cars, which will also appear on that ballot — Wiener has been the rare strong advocate locally for actually giving the agency more money.

Mayor Ed Lee created a $10 million hole in the SFMTA budget by demanding the repeal of charging for parking meters on Sunday this year, and then he dropped his support for a local increase in the vehicle license fee this year, prompting Wiener to introduce his Muni funding measure, which the mayor would have the authority to terminate if voters approve a VLF increase in 2016.

A $500 million general obligation bond transportation measure backed by Lee and the full Board of Supervisors will also appear on the November ballot, but it will go mostly to cover Muni’s capital needs, not the growing demands on its operating budget.

Wiener’s Muni funding measure yesterday barely got the six votes this charter amendment needed to qualify for the ballot: those of Wiener and Sups. London Breed, David Campos, David Chiu, Malia Cohen, and Jane Kim (Sup. John Avalos was absent).

In recent years, there’s been a rift in the city’s progressive coalition between environmental and transportation activists on one side and affordable housing advocates on the other, who sometimes battle over city funding they see as a zero sum game. So it will be interesting to watch how the politics surrounding this measure shape up going into the fall campaign season.  

SF and UC systems dragging their feet on fossil fuel divestment

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The San Francisco Employees’ Retirement System and University of California Board of Regents — two local entities targeted by campaigns urging them to divest of their fossil fuel investments — remain resistant to the change despite official statements of support.

In April of last year, the San Francisco Board of Supervisors voted to push SFERS to divest from fossil fuels. Now, more than a year later, sponsoring Sup. John Avalos questioned Mayor Ed Lee during the July 15 Board of Supervisors meeting about what needs to happen to move toward divestment. Groups such as Fossil Free SF and 350 SF are asking the same question since the issue of climate change is nearing a critical threshold.

Kimberly Pikul and Jed Holtzman of 350 SF told the Guardian that now is the time for action. “There is only so much carbon that we can release before we cook the planet beyond a level to which we can adapt,” Holtzman told the Guardian.

Pikul and Holtzman explained that carbon reserves owned by publicly traded fossil fuel companies represent five times what would be required to “cook the planet.” Only 20 percent of owned reserves can actually be used without massive environmental consequences, so they say stock in a fossil fuel companies is overvalued, making it a risky investment.

“To protect the long-term financial health of the pension fund and the benefits of city workers and retirees, it is a certainty that SFERS needs to divest from its fossil fuel holdings,” said Holtzman.

Despite the unstable investments and risk of environmental change, Mayor Lee seemed more concerned with jobs and green projects when Avalos questioned him about the Retirement Board’s progress at the Board of Supervisors meeting.

Lee told Avalos: “Our commitment of $4.5 million a year to GoSolarSF will continue to create local green collar jobs and … contribute [to] the creation of locally produced 100 percent green energy. These are the kinds of meaningful investments that actually deploy dollars, create jobs, and move the needle on green energy.”

Despite SF’s support of green jobs, Avalos, Fossil Free UC and 350 SF see divestment as one of the pathways toward long-term environmental change and more sustainable energy projects.

But, as Avalos pointed out, the Retirement Board has “yet to take any steps to divest from fossil fuels or limit the retirement fund’s exposure to the financial risks posed by climate change.”

The only step taken so far is to initiate “Level 1” shareholder engagement with fossil fuel companies. Pikul and Holtzman explained that Level 1 engagement “is largely cosmetic and only calls for SFERS to vote their proxies on climate-related shareholder votes.” The next step is Level 2: shareholder advocacy and engagement with fossil fuel companies. The ideal is Level 3, or investment restriction/divestment.

SF isn’t the only city to seek divestment. Oakland and Berkeley are also pursuing the cause, as are Portland and Seattle. The University of California has also been deliberating the issue and plans to vote on divestment in September.  

But the UC Board of Regents seems skeptical, despite the push from students. UC President Janet Napolitano told the Daily Bruin, “Using divestment as a tool is something that should be done rarely, if at all.”

An open letter from faculty to the UC Regents, posted on Fossil Free UC’s website, bases the argument for divestment on students’ well-being: “Current students will be at the peak of life in 2050, identified by numerous studies as a point at which the global community will have either adequately responded to climate change, or will be suffering horribly from it.”

When Harvard rejected divestment in 2013, University President Drew Faust told the San Francisco Chronicle that she found “a troubling inconsistency in the notion that, as an investor, we should boycott a whole class of companies at the same time that, as individuals and as a community, we are extensively relying on those companies’ products and services for so much of what we do every day.”

Stanford University had a similar dependence issue, which is why it compromised by divesting from coal companies, instead of all fossil fuel companies. Before divestment, the university received $19 billion from coal-related investments, money that will now be invested in other things.

While the partial divestment is a step in the right direction, Fossil Free UC student organizer Silver Hannon said, in a press release following July 16 Regents meeting, “While partial divestment could stigmatize the dirtiest energy source, we need to see the Regents take a real leadership position on the issue by adopting a comprehensive fossil-free investment strategy.”

As for SF, Mayor Lee promises that divestment will happen after the Retirement Board has considered the consequences. Since there doesn’t seem to be a study currently underway, the best course of action is to keep Lee and other officials accountable for SF’s climate and clean energy goals, said Pukil and Holtzman.

Lee seems confident that SFERs will divest, even if the timeline is currently unclear.

“I know the commission does seriously consider the fiscal consequences of divestment, and sometimes they decide the benefits outweigh the costs,” Lee told the supervisors. “I trust the Retirement Board and staff to make the right decisions in this regard.”

Alternative Ink discusses the flurry of SF ballot measures moving through City Hall

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Digging deep during the height of summertime fun and frivolity, we Guardianistas showed up in force last night for another lively and informative edition of our biweekly radio show, Alternative Ink, on BFF.fm. Listen to the podcast here (but don’t be fooled by the first minute from a past show, it’s a false front we used to hide this week’s treasure).

With the fall ballot being filled out inside City Hall in recent weeks, we discussed rival housing measures sponsored by Sup. Jane Kim and Mayor Ed Lee, as well as the anti-speculation tax. We also covered the Restore Transportation Balance (placed on the ballot by citizens) and Let’s Elect Our Elected Officials (which was narrowed denied a spot on the ballot by the Board of Supervisors) measures that have been burning up the SFBG comments section lately.  

We talked tech, prompted by our pair of long and insightful stories in last week’s issue, and we previewed an interesting story in our coming issue about how San Francisco is dealing with a flood of young immigrants who have showed up seeking refuge status. As always, the show was peppered with great music, this time with a decidedly international flair thanks for our award-winning Art Director Brooke Ginnard’s return from a three-week vacation in Europe (welcome back, Brooke).

After doing the show for a few months now, we’re starting to hit our stride — so much so that we’ve decided to do a live version of the show on the evening of Aug. 28 at the LGBT Center. So stay tuned for more information about the lineup for that show, and please tune in to our next radio show on Aug. 3. 

Housing supply and demand theory on trial at City Hall

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The November ballot is shaping into a housing supply theory showdown, and yesterday’s [Thu/17] Board of Supervisors Rules Committee hearing was the first round.

The committee hosted two hearings on rival housing proposals for the November ballot: Sup. Jane Kim’s City Housing Balance Requirement and Mayor Ed Lee’s Build Housing Now initiative. The two purport to set similar goals for building affordable housing, but Lee’s proposal contains a poison pill that would invalidate Kim’s measure. 

The mayor’s philosophy on housing, a strict supply and demand argument, was on full display. 

“[Housing] is a competition based on who has the most dollars in their pocket, and the ones with the most dollars win,” Olson Lee, director of the Mayor’s Office of Housing said at the hearing. “If we limit the supply, the people with the most dollars will win.”

The arguments are a little complicated, but let’s try to break them down: Kim’s initiative lays out a requirement for new construction to build 30 percent affordable housing and 70 percent market-rate housing. Currently, new construction projects can build on-site affordable or pay a fee into a pot, known as the Affordable Housing Trust Fund. If new construction needs to be exempt from the balance requirement, under Kim’s measure, that can be decided by the Planning Commission. 

But the mayor and his deep-pocketed development allies are shrinking away from this like the Wicked Witch of the West from water. Affordable housing doesn’t make a dime for developers, and the mayor fears Kim’s policy will slam the breaks on market-rate housing construction. 

Activist and San Francisco historian Calvin Welch argues supply and demand housing theories won’t solve the San Francisco housing crisis, via 48hills.

Yet Kim’s measure is based on what many progressives in San Francisco believe: San Francisco’s housing market is hot, profits are high, demand is insatiable, and building lots of market rate housing that will never be affordable to most San Francisco won’t solve the city’s affordable housing crisis. The construction pipeline won’t slow down with a few dings to profit margins, she argued. 

“I just have to say if building 30 percent affordable housing will halt development, we’re in a whole lot of trouble,” Kim said to her critics. “We have to build. Even people that make money leave San Francisco every day.”

No one is saying Kim doesn’t believe more housing needs to be built. But Lee’s staffers emphasized a belief that more housing construction alone is the solution to the city’s ills, a strategy that hasn’t exactly netted stellar results recently. They also defended the Affordable Housing Trust Fund, as the Mayor’s Office of Housing is funded about “40 percent” from developer’s fees, Olson Lee said. Sarah Dennis Phillips, from the Mayor’s Office of Economic and Workforce Development, argued sharply that any hit to developer’s fees, even marginal ones, would result in a loss of dollars for the city’s General Fund, the funding pot feeds most city services.

The mayor’s ballot initiative essentially asks for a vote of confidence in his plan to build or rehabilitate 30,000 housing units by 2020, which some in the press have pilloried as depending heavily on already-existing units. While 30,000 sounds like a lot, the Controller’s Office said San Francisco would need as many as 100,000 housing units to even make a dent in San Francisco’s skyrocketing housing prices, according to the SF Examiner (though he has since written the Examiner to say his sentiments were misconstrued). The city’s Civil Grand Jury recently released a scathing report of the mayor’s 30,000 housing unit goal, saying “While the residential real estate market is enjoying a strong recovery, it is doubtful the city can build its way out of the current affordability crisis.”

Meanwhile, people are losing their homes and fleeing the city. Some who are holding on by a thread came out to speak at the dueling hearings. 

“I have health challenges including cerebral palsy,” Justin Bennet said during public comment. He spoke with a difficulty in his jaw, haltingly and with much effort. He said the housing market made it difficult to move from the dangerous areas of the city he calls home. “I’ve been robbed outside several residences I’ve lived in, so I’m hoping for a change in my housing situation in the future. Thanks for letting me speak.” 

A family came up to the podium to speak, with two young housing activists, a brother and sister, 9 and 6, saying they didn’t want to see so many lose their homes.

Advocates from the SEIU 1021, South of Market Community Action Network, Alliance of Californians for Community Empowerment, and the Chinese Progressive Association, to name a few, were on hand at the hearing. They were also on hand for a press conference on the steps of City Hall shortly before the hearing. Ed Donaldson from ACCE called out the mayor’s housing measure, saying its only intent was to torpedo Kim’s. 

“I say we should play chicken with the mayor,” Donaldson said at the podium. Metal bands have sung with less volume than the baritone he used while booming, “Let’s see if he has the gall.”

Inside the hearing, Patrick Valentino (who championed luxury development on the waterfront) and Tim Colen of the Housing Action Coalition spoke, defending the mayor’s measure.

“As San Francisco, as a city in affordability, we’re failing. Our rate of failure is accelerating,” he said flatly. He criticized Kim’s plan and asked, “Where’s the money? No one disagrees we need it. The shortcoming I see in the housing balance measure is its premise that if we increase restrictions on market rate housing, it helps subsidize housing.” 

He argued instead to gather more stakeholders together (i.e. deep pocketed developers) to negotiate more private funding, a strategy he said that worked in the past. 

As others came to the podium to argue against developer greed, Colen watched on, shaking his head, seemingly in disagreement. When someone in public comment argued that developers so far have shirked their responsibilities to build affordable housing, he shook his head again and left the hearing room. 

There’s a stark divide in housing philosophy, and supply and demand’s ability to save San Francisco will soon see a trial by voter if Kim’s charter amendment can win six vote at the full Board of Supervisors. 

The mayor’s policies seem to be more of the same, Kim said, and now the city seems to be fighting over the crumbs of developers’ fees. Despite opposition from the mayor, Kim told the Guardian she’s open to new ideas from the mayor. 

But she also said she won’t back down. 

“We’re on a two-fold path right now. If there’s a compromise to get [the city] to 30 percent affordable housing, like new revenue, we’re open to that compromise,” she said. “But we always intended this to go to the ballot.”

More funding promised to Central American child refugees, Lee warns of new influx

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Thousands of Central American children fleeing drug wars and poverty are overwhelming the San Francisco nonprofits who care for them, but new information from the mayor shows this may just be the beginning.

Yesterday, just hours before Supervisor David Campos’ resolution to bolster funding to aid the incoming refugees passed, Mayor Ed Lee warned the Guardian and other journalists that San Francisco is bracing for another influx of even more children in need.

“I met with the federal Health Service System to prepare our city for the possibility of a higher influx [of refugees],” he said. “The numbers seem to be coming in, though they haven’t reached us yet.”

Campos’ measure to focus funding on the needs of Central American child refugees passed by unanimous vote, likely because its sorely needed. Nonprofits in San Francisco like the Central American Resource Center (CARECEN) and other sounded the alarm: there are too many refugees, and not enough caregivers and legal aid to help them. More than 36,000 Central American children (often unaccompanied) entered the US illegally between Oct. 2013 and May this year, according to widely reported federal data. The number of Mexican children entering the US dropped to about 17,000. 

But why are they coming here? Many reasons, but mostly they’re fleeing violence. Honduras, for instance, was the murder capital of the world, with 79 people murdered in every 100,000, according to Reuters. Neighboring El Salvador didn’t do much better, with the second highest murder rate per capita in the world. 

“I am from Honduras and I just turned 16-years-old,” a teenager named Juan said, in a statement from CARECEN, “I came after my father was murdered and I feared for my life that I was next. If I go back I’m not sure that I can go back and live a good life. I want to go to school and live so I can grow up to do something good.”

False rumors in Central America that the US is offering permisos, meaning, permanent status, also spurred an influx of refugees. 

CARECEN’s Washington D.C., Los Angeles and San Francisco locations are advocating for President Barack Obama to declare a state of emergency and aid these refugees. But as the federal government grasps at possible solutions, local government is stepping in to help those reaching the city. 

“There’s a long history on this board on calling out against injustices we’ve seen in different parts of the world,” Campos said at the board yesterday as he introduced his measure, adding “They’re escaping not just political turmoil but violence in their lives.”

“These are children,” he said. 

Lee said one of the biggest challenges in helping these children may be a cultural one.

“I’m trying to wrap my arms around the fact that many of these kids don’t speak Spanish,” Lee told the Guardian yesterday. “They speak Mayan and different languages. This will test our cultural competency.”

Campos is planning a hearing on how best to focus funding to aid the child refugees, but hasn’t yet settled on a date for said hearing. 

Supes to vote on Avalos’ “Let’s Elect Our Elected Officials” measure

The San Francisco Board of Supervisors will vote tomorrow (Tue/15) on whether to submit a charter amendment to the ballot that would require a special election in the event of a vacancy on the Board of Supervisors or in the mayor’s office.

As things stand, the mayor holds the power to appoint someone to fill a vacant seat on the board. But Sup. John Avalos’ proposed ballot measure, unofficially dubbed “Let’s Elect our Elected Officials,” would shift that decision-making power to the voters. The measure needs six votes to pass.

If it wins voter approval, the measure would also likely have a significant impact on the city’s political landscape in the immediate future.

Sup. David Campos, who is co-sponsoring the initiative, is currently vying for a seat in the 17th Assembly District against Board President David Chiu, a narrow race that will leave a vacancy on the Board one way or another. If Campos, one of the board’s most progressive members, is elected, Mayor Ed Lee would presumably appoint someone to his seat with a rather different political bent.

The ballot needs an additional three votes (beyond its three sponsors) to reach the necessary six votes necessary for approval by the Board, and “it’s sort of up in the air at the moment,” according to Jeremy Pollock, Avalos’ legislative aide.

Some supervisors are reluctant to go against Lee by limiting mayoral power. Opposition from Sup. Katy Tang, herself a beneficiary of the current rules when she was appointed by Mayor Lee in February 2013, has also had an effect of the amendment’s approval.

But supporters of the bill are hoping the overall benefits of the measure will lead the supervisors to approve it.

“John sees this as a good government reform that takes some power away from the mayor and the Board and gives it to the voters,” Pollock said, with the hope that it would also work to discourage backroom deals.

Another potential issue raised over the approval of the measure is the cost of special elections, though it appears to be a relatively minor concern. According to the San Francisco Department of Elections, a special election for supervisors costs roughly $300,000 (a drop in the ocean given the city’s multi-billion dollar budget) and around $3.5 million for a citywide election, a substantial sum but also a relatively minor worry given the rarity of vacancies in the mayor’s office. Some might argue that given the importance of the mayor’s duties, that’s a small price to pay to allow the voters to have a say.

In addition to its main rule change, the measure includes a few other provisions, such as making an exception for the proposed rule if a regularly scheduled election would be held within 180 days of the vacancy.

It would also provide “that the Mayor appoints an interim Supervisor to fill a supervisorial vacancy until an election is held to fill that vacancy,” with the key addition that the interim supervisor would be ineligible to compete in that election.

That’s no small stipulation, given the sweeping historic success of incumbents in board re-elections. (Since 2000, when district elections returned, Christina Olague is the only incumbent who failed to gain re-election after being appointed.) Avalos appears set on plugging all holes with his proposed legislation, and it’s now up to the board to place it on the November ballot.

City will turn Francisco Reservoir into a park, with no affordable housing

San Francisco is getting a new park – but the deal has left some wondering why a small portion of the new parkland couldn’t have been set aside to build housing for teachers and firefighters.

On July 8 members of the San Francisco Public Utilities Commission voted unanimously, amid a flurry of congratulatory exchanges, to transfer the Francisco Reservoir to the Recreation and Parks Department. Nearly everyone who weighed in during public comment praised the decision to convert the reservoir site into open space for the surrounding neighborhood. Located near Russian Hill on Hyde Street just above Bay Street, the Francisco Reservoir has gone unused for the better part of century.

One speaker did offer some balance. “We have the mayor and the Board of Supervisors constantly hitting us over the head saying we need housing,” she pointed out. “We have to start somewhere.” 

Under city law, publicly owned “surplus property” – as the Francisco Reservoir is categorized – must be considered for affordable housing before city departments may let it go for any other use.

Yet during years of discussion between neighbors and city officials to discuss this 4-acre parcel, the idea of building affordable housing apparently didn’t even receive minimal consideration.

Instead, the affluent neighbors wanted a park – and managed to raise nearly $10 million in private funding through several neighborhood associations to help make it happen. That money has been pledged for a park endowment, to cover development and maintenance purposes.

According to City Attorney spokesperson Matt Dorsey, the city’s “enterprise agencies” are exempted from the affordable housing requirement in the surplus property ordinance – this applies to surplus parcels under the ownership of the Port, the SFPUC, the SFMTA, and the Recreation & Parks Department.

A memorandum of understanding approved by the SFPUC, which must win the approval of the Board of Supervisors and the mayor before being finalized, grants some $10 million from the Recreation and Park Department’s open space fund to purchase the Francisco Reservoir from the SFPUC.

Open space is generally a wonderful amenity in an urban environment, particularly for land that hasn’t been used in decades. As Jan Blum noted at the hearing, the parkland will provide environmental benefits such as “habitat for migratory birds, as well as local wildlife.”

But the city’s decision to convert surplus property to open space comes just as Mayor Ed Lee is seeking to build 30,000 new housing units to stem the affordability crisis.

John Stewart, a prominent affordable housing developer appointed to serve on Lee’s affordable housing task force, told the Guardian that he got nowhere when proposing the idea of affordable housing construction for a small portion of the Francisco Reservoir parcel.

Stewart, who emphasized to the Bay Guardian that his company has no financial ties nor interest in developing a project there, penned an editorial for the San Francisco Business Times earlier this year on the Francisco Reservoir transfer, asking, “Why not expand the conversation to include the subject of housing?”

The idea was not well received. “I did not even propose tax-credit, tax-driven, very low income housing,” Stewart noted. “I proposed moderate-income, for teachers and nurses.”

The neighborhood plan showed the area at the end of the parcel, where Stewart thought housing could go, as a dog run.

Sup. Mark Farrell, who represents District 2, where Francisco Park would be located, was deeply involved in discussions about converting the reservior into a park. Farrell’s office didn’t return calls seeking comment, nor did the SFPUC.

“Sup. Farrell didn’t want me speaking to these groups,” Stewart said. “Nobody said, come by, come to our coffee klatch, make the case and we’ll at least talk it over. Nobody wanted to discuss it – that was clear. There was polite silence. But there was silence,” he said. “And their view is – and it’s understandable – they really want to have the whole thing.”

Motorists fight back in “transit-first” San Francisco

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Believing that they’re somehow discriminated against on the streets of San Francisco, a new political coalition of motorists, conservatives, and neighborhood NIMBYs yesterday [Mon/7] turned in nearly twice the signatures they need to qualify the “Restore Transportation Balance in San Francisco” initiative for the November ballot.

It’s a direct attack on the city’s voter-approved “transit-first” policies and efforts to reduce automobile-related pollution and greenhouse gas emissions. It would prevent expanded parking meter enforcement unless requested by a neighborhood petition, freeze parking and permit rates for five years, require representation of motorists on the SFMTA board and create a Motorists Citizens Advisory Committee within the agency, set aside SFMTA funding for more parking lot construction, and call for stronger enforcement of traffic laws against cyclists.  

“With 79 percent of San Francisco households owning or leasing an automobile and nearly 50 percent of San Franciscans who work outside of their homes driving or carpooling to work, it is time for the Mayor, the Supervisors, and the San Francisco Municipal Transportation Agency (SFMTA) Board to restore a balanced transportation policy for all San Franciscans,” the group claims on its petition.

But given that drivers already dominate the space on public roadways, often enjoying free parking on the public streets for their private automobiles, transportation activists say it’s hard to see motorists as some kind of mistreated population.

“The idea that anyone who walks or cycles or takes public transit in San Francisco would agree that these are privileged modes of transportation is rather absurd,” Tom Radulovich, executive director of Livable City and an elected member of the BART board, told the Guardian.

He said this coalition is “co-opting the notion of balance to defend their privilege. They’re saying the city should continue to privilege drivers.”

But with a growing population using a system of roadways that is essentially finite, even such neoliberal groups as SPUR and the San Francisco Chamber of Commerce have long promoted the idea that continued overreliance on automobiles would create a dysfunctional transportation system.

“Prioritization of the single modes of transportation isn’t a matter of ideology, it’s a matter of geometry,” Radulovich said. “We’re all better off, including motorists, if we prioritize other modes of transportation and encourage people to get out of their cars.”

Still, the revanchist approach to transportation policy in San Francisco has been on the rise in recent years, starting with protests against parking management policies in the Mission and Potrero Hill, and continuing this year with Mayor Ed Lee successfully pushing the repeal of charging for parking meters on Sundays.

The coalition behind this ballot measure includes some of the combatants in those battles, including the new Eastern Neighborhoods United Front (ENUF) and old Coalition of San Francisco Neighborhoods. Other supporters include former westside supervisors Quentin Kopp, Tony Hall, and John Molinari, and the city’s Republican and Libertarian party organizations.

Spokespersons for the coalition didn’t return Guardian calls, but we’ll update this post if and when we hear back, and we’ll have a longer analysis of this issue in next week’s Guardian.

But Radulovich said that while conservatives are helping drive this coalition, anger over the city’s transportation policies is more of a throwback to a bygone era than it is based on conservative principles (for example, the SF Park program criticized by the coalition uses market-based pricing to better manage street parking and encourage turnover in high-demand areas).

As he said, “There are certain people who believe in the welfare state, but only for cars and not for humans.”  

Taxing speculators

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steve@sfbg.com

Political tensions over evictions, displacement, real estate speculation, and rapidly rising housing costs in San Francisco are likely to heat up through the summer and autumn as a trio of November ballot measures are debated and combated by what’s expected to be a flood of campaign cash from developers and other real estate interests.

Topping the list is a tax measure to discourage the flipping of properties by real estate speculators. Known generally as the anti-speculation tax — something then-Sup. Harvey Milk was working on at the time of his assassination in 1978 — it was the leading goal to come out of a citywide series of tenant conventions at the beginning of this year (see “Staying power,” 2/11/14).

“To be in a position to pass the last thing Harvey Milk worked on is a profound opportunity,” AIDS Housing Alliance head Brian Basinger told us, arguing the measure is more important now then ever.

The measure has been placed on the ballot by Sups. John Avalos, David Campos, Jane Kim, and Eric Mar and is scheduled for a public hearing before the Board of Supervisors Rules Committee on July 10 at 2pm.

“It’s an absolutely key issue for San Francisco right now. Passing this measure will create a seismic shift in what we’re seeing with evictions and displacement in the city,” Sara Shortt, director of the Housing Rights Committee, told the Guardian.

The measure creates a supplemental surcharge on top of the city’s existing real estate transfer tax, a progressive rate ranging from a 24 percent tax on the sale of a property within one year of its purchase to 14 percent if sold between four and five years later.

In addition to levying the tax, the measure would also give the Board of Supervisors the power to waive that tax “subject to certain affordability-based restrictions on the occupancy of the real property,” giving the city leverage to expand and preserve deed-restricted affordable housing.

Meanwhile, there’s been a flurry of backroom negotiations surrounding the City Housing Balance Requirement measure sponsored by Sup. Jane Kim, which would require market rate housing projects to get a conditional use permit and be subjected to greater scrutiny when affordable housing falls below 30 percent of total housing construction (with a number exemptions, including projects with fewer than 24 units).

That measure is scheduled for a hearing by the Rules Committee on July 24 and, as an amendment to the City Charter, it needs six votes by the Board of Supervisors to make the ballot (the anti-speculation tax is an initiative that requires only the four supervisorial signatures that it now has).

Mayor Ed Lee and his allies in the development community responded to Kim’s measure by quickly cobbling together a rival initiative, Build Housing Now, which restates existing housing goals Lee announced during his State of the City speech in January and includes a poison pill that would invalidate Kim’s housing balance measure.

Together, the measures will draw key battle lines in what has become the defining political question in San Francisco these days: Who gets to live here?

 

COMBATING SPECULATORS

In February, Mayor Lee and his allies in the tech world, most notably venture capitalist Ron Conway, finally joined housing and other progressive activists in decrying the role that real estate speculators have played in the city’s current eviction and displacement crisis.

“We have some of the best tenant protections in the country, but unchecked real estate speculation threatens too many of our residents,” Lee said in a Feb. 24 press release announcing his support for Sen. Mark Leno’s Ellis Act reform measure SB 1439. “These speculators are turning a quick profit at the expense of long time tenants and do nothing to add needed housing in our City.”

The legislation, which would have prevented property owners from evicting tenants using the Ellis Act for at least five years, failed in the Legislature last month. So will Lee honor his own rhetoric and support the anti-speculation tax? His Communications Director Christine Falvey said Lee hasn’t yet taken a position on the measure, but “the mayor remains very concerned about real estate speculators.”

Peter Cohen of the Council of Community Housing Organization said Lee and his allies should support the measure: “It seems so clearly aligned with the same intent and some of the same mechanics as Ellis Act reform, which had the whole city family behind it.”

“I think it would be very consistent with their position on Ellis Act reform to support the anti-speculation tax,” Shortt told us. “If the mayor and tech companies went to bat for the anti-speculation tax, and not against it, that would show they have real concern about displacement and aren’t just giving it lip service.”

Conway’s pro-tech group sf.citi didn’t returned Guardian calls on the issue, nor did San Francisco Planning and Urban Research Association, but their allies in the real estate industry strongly oppose it.

“As Realtors, our goals are to increase housing availability and improve housing affordability,” San Francisco Association of Realtors CEO Walk Baczkowski told the Guardian. “We don’t believe the proposal from Sup. Mar, which is essentially a tax on housing, will accomplish either of those goals.”

But supporters of the measure say real estate speculation only serves to drive up housing costs.

“We have been successful at bringing people around on the issue of real estate speculation,” Basinger told us. “But of course, there will be financed opposition. People will invest their money to protect their interests.”

“We know it’s going to be a fight and we’ll have to put in a lot of resources,” Shortt said, adding that it’s a fight that tenant activist want to have. “Part of what fuels all of this [displacement] is the rampant real estate speculation. We can’t put profits above people.”

 

MAYOR’S MEASURE

Falvey denies that Lee’s proposal is designed simply to negate Kim’s measure: “Build Housing Now specifically asks the voters to adopt as official city policy the Mayor’s Housing Plan to create 30,000 new homes by 2020 — the majority within reach of low, moderate, and middle income residents. This is not a reaction, but a proactive measure that lets voters weigh in on one of the mayor’s most important policy priorities.”

Yet the most concrete thing it would do is sabotage the housing balance measure, an intention it states in its opening words: “Ordinance amending the Planning Code to prohibit additional land use requirements such as conditional use authorizations, variances or other requirements on housing projects…based on a cumulative housing balance ratio or other similar criteria related to achieving a certain ration of affordability.”

Beyond that, it would have voters validate Lee’s housing goal and “urge the Mayor to develop by December 31, 2014 a Housing Action Plan to realize this goal.” The measure is filled with that sort of vague and unenforceable language, most of it designed to coax voters into thinking it does more than it would actually do. For example, it expands Lee’s stated goal of 30 percent of that new housing being affordable by setting a goal of “over 50 percent within reach of low and middle income households.”

But unlike most city housing policies that use the affordable housing threshold of those earning 120 percent of area median income (AMI) and below, Lee’s measure eschews that definition, allowing him and his developer allies to later define “middle income households” however they choose. Falvey told us “he means the households in the 50-150 percent of AMI range.”

The measure would also study the central premise of Mayor Lee’s housing policy, the idea that building more market rate housing would bring down the overall price of housing for everyone, a trickle-down economic argument refuted by many affordable housing advocates who say the San Francisco housing market just doesn’t work that way because of insatiable and inelastic demand.

“Within 60 days of the effective date of this measure, the Planning Department is directed and authorized to undertake an economic nexus analysis to analyze the impact of luxury development on the demand for middle income housing in the City, and explore fees or other revenue sources that could help mitigate this impact,” the measure states.

Shortt thinks the mayor’s measure is deceptive: “It’s clever because for those not in the know, it looks like a different way to solve the problem.” But she said the housing balance measure works well with the anti-speculation tax because “one way to keep that balance is to make sure we don’t lose existing rental stock.”

And advocates say the anti-speculation tax is the best tool out there for preserving the rental housing relied on by nearly two-thirds of city residents.

“It’s the best measure we have going now,” Basinger said of the anti-displacement tax. “Mayor Ed Lee and his tech supporters were unable to rally enough support at the state level to reform the Ellis Act, so this is it, folks.”

Garbage game

8

San Francisco elected officials frequently celebrate the ambitious citywide goal of sending zero waste to the landfill by 2020, an environmental feat widely viewed as attainable since the current waste diversion rate stands at a stellar 80 percent.

Official city numbers — based on reporting by Recology, a company that has a monopoly on trash collection and curbside recycling in San Francisco — demonstrate that only 20 percent of all city dwellers’ trash ends up in a landfill, that unenlightened dead end for matter discarded from our lives, never to be reprocessed.

Yet a lawsuit against Recology exposed some inconsistencies in the company’s record keeping. It also shed light on how some material counted as “diverted” is routinely sent to a landfill anyway, a practice that muddies the concept of the city’s Zero Waste program but is nevertheless legal under state law.

On June 17, a San Francisco jury determined that Recology misrepresented the amount of waste diverted from the landfill in 2008, enabling it to collect an incentive payment of $1.36 million for meeting the goal. The verdict compels Recology to pay the money back to the city, since it was obtained after submitting a false claim.

The outcome of this lawsuit — brought by a former manager of the Tunnel Road recycling Buy Back facility, who also claims he was retaliated against for trying to expose fraud — highlights some larger questions. Was this inaccuracy unique to 2008, or are Recology’s numbers always a little fuzzy? Are there adequate safeguards in place to prevent the company from fudging the numbers, particularly when both company and city officials have an incentive to exaggerate the diversion rate? And if what’s on paper doesn’t quite square with reality, is San Francisco really keeping as much garbage out of the landfill as the city’s Department of the Environment says it is?

Attorney David Anton, who represented the former Recology employee, Brian McVeigh, said he found it odd that San Francisco officials didn’t show much interest in collaborating to recover the bonus money, even though millions of dollars was potentially at stake. Since damages are trebled under the False Claims Act, cited in the lawsuit, Recology could ultimately be made to fork over the incentive payment three times over.

“The city’s representative in the Department of the Environment actually testified that he hoped this lawsuit would be unsuccessful,” Anton recounted. He guessed that officials remained on the sidelines because in San Francisco’s political power centers, “relationships with Recology are so close and tight. It was a very strange thing,” he went on, “to be pursuing this lawsuit, trying to get money to the city, and the city’s representatives are saying, ‘we don’t want it.'”

Recology has filed post-trial motions in a bid to have the penalty reduced, “asking the court to decide whether there was any evidence at trial that there were public funds in the Diversion Incentive Account, and if so, how much,” explained Recology spokesperson Eric Potashner. “We expect a ruling this summer.”

Department of the Environment spokesperson Guillermo Rodriguez told the Guardian that Robert Haley, manager of the department’s Zero Waste team, was unavailable for comment before press time. With regard to the lawsuit, Rodriguez noted, “The city has been following the trial closely and is awaiting the judge’s ruling on post-trial motions before determining any reaction.”

 

FALSE CLAIMS

The False Claims Act is designed to recover damages to government when false statements are made to obtain money or avoid making payments. It has a provision allowing whistleblowers, such as McVeigh, to lead the charge on seeking civil enforcement action. The whistleblower may be eligible to receive a share of recovery.

Under the bonus incentive program, Recology sets aside extra cash — collected from garbage customers’ payments — in a segregated account. But it cannot withdraw funds from that account unless it hits the city’s established waste-reduction targets. Recology submitted paperwork to the city in 2008 showing that it met the diversion goals, so it was allowed to withdraw the money.

But the lawsuit demonstrated that Recology actually fell short of those goals — and apparently, nobody in city government ever followed up to check whether the reporting was accurate.

A key reason the jury ruled against Recology on this particular claim, according to Anton, was that it was found to have misclassified some construction and demolition waste as “diverted” material. Under state law, when ground-up construction debris is used to cover the top of a landfill — to prevent pests, fires, and odors, for example — it’s counted as “alternative daily cover.” Trash in this category winds up in a landfill, just like any other trash. But state law allows garbage companies to count it as “diverted,” just as if it were an aluminum can tossed into the blue bin.

The lawsuit claimed that Recology tried to count a great many tons of construction and demolition waste as “alternative daily cover” when in reality, it should have been counted as just plain trash.

Solano County records show that a landfill inspector had flagged an “area of concern” after discovering solid waste mixed in with construction debris Recology shipped to a landfill for use as that top layer. “It looks like they didn’t do a good enough job of cleaning out that material,” CalRecycle spokesperson Mark Oldfield noted as he pulled up the report from 2008 at the Guardian’s request.

Had the material gone to the landfill as just plain garbage, instead of “alternative daily cover,” Recology would have had to count it as waste sent to the landfill, instead of waste diverted from the landfill. That would have meant falling short of the waste diversion goal, hence losing out on the $1.36 million.

“Recology kept this completely secret from San Francisco,” according to Anton.

Potashner said it was actually a bit more complicated — the company challenged the inspector’s findings, he said. “The local enforcement agency in Solano County had questions about that material,” but Recology never received a cease-and-desist order, he added. “When we had talked to jurors after the fact, that was the issue that seemed to sway them. In 2008 we didn’t make that bonus by that much. They thought we shouldn’t have been able to count that as diversion because of this issue.”

Either way, the incident exposes a strange reality: When San Francisco city officials trumpet the citywide success of “diverting” 80 percent of all waste from the landfill, some portion of that 80 percent actually winds up in a landfill anyhow. Whether the construction debris counted as “alternative daily cover” has trash mixed into it or not, it’s still destined to wind up in a big, environmentally unfriendly trash heap.

 

CONCRETE NUMBERS

The lawsuit highlighted a few other red flags, too, raising more questions about the city’s true diversion numbers. For instance, the suit claimed that Recology was involved in a system of digging up concrete from its own parking lots, to be handed over to concrete recyclers as “diverted” waste.

“Recology facilities have large areas of concrete pads,” the complaint noted. “Management of Recology … directed Recology work crews in 2005, 2006, 2007, and 2008 to cut out sections of concrete pads and deliver the removed concrete to concrete recyclers, to falsely inflate the diversion incentive reported to SF.”

The waste management company then “solicited cement companies to deliver and dispose of excess and rejected concrete loads to Recology, to fill in the removed concrete pad sections,” according to the complaint. Those shipments were brought in on trucks that weren’t weighed at entry, and then placed in the concrete pads. Management then had work crews remove the same concrete that had been delivered, shipped it to the concrete recyclers, and reported it “as diverted from being disposed in a landfill,” the complaint noted.

This account was corroborated by a Guardian source unrelated the lawsuit, but nonetheless familiar with the inner workings of the company. “They would take the concrete across the road — right across the street,” this person confirmed.

Asked to provide an explanation for this, Recology’s Potashner said, “it is clear, and wasn’t even challenged by the plaintiff at trial, that recycled concrete is diverted, whether it had been from Recology’s lots or anywhere else.”

McVeigh’s case stemmed from his realization, while working as a manager at Recology’s Tunnel Road recycling buyback facility, that employees there were routinely marking up the weights of recyclable materials brought in, in order to pay out certain customers more than they were actually owed. The suit suggests that these routinely inflated California redemption value (CRV) tags contributed to Recology missing its waste-diversion targets, but the jury ultimately sided against the plaintiff on this question since it amounted to a financial loss for Recology, not the city.

The complaint included tag numbers and logs of scale weights that didn’t match up, showing a pattern of fraudulent dealings at the buyback center. In November 2007, for example, “ticket reports showed that 23.4 tons of aluminum CRV cans were purchased at the Bayshore Buyback Center, yet only 16.56 tons existed and were shipped.”

Asked about these claims, Potashner acknowledged that there may have been some “knuckleheads” involved in messing with the scales at the buyback center, but asserted that such activity had since been addressed. He added, “If there were any staffing issues around theft, that was actually affecting Recology’s books,” not the public.

Oldfield, the CalRecycle spokesperson, noted that a long list of paperwork violations had been recorded in 2010, but he said the company appeared to have been in compliance since then — based on logs from inspectors’ visits once a year.

Another problem uncovered in the trial, Anton said, had to do with Recology misrepresenting tons of garbage from out of county, so that it would be counted outside the parameters of the waste diversion program. Potashner said that had been corrected, adding, “the out-of-county waste is really a small volume.”

But he confirmed that yet another practice brought to light in this lawsuit is ongoing, revealing a surprising end for some of the stuff that gets tossed into the green compost bins.

 

MANY SHADES OF GREEN

According to every colorful flier sent out by Recology, the stuff that goes into the green bin gets composted. The green bin is for compost. The blue bin is for recycling. The black bin is for trash that goes to the landfill. This is the fundamental basis of Recology’s waste collection operation and, taking the company and the Department of the Environment at face value, one would assume that 80 percent of all waste was being processed through the blue and green waste streams.

Instead, some of what gets tossed into green bins makes its way to a landfill.

The green-bin waste is shipped to a Recology facility where it’s turned into compost, a process that involves sifting through giant screens. But some of what gets processed, known as “overs” because it isn’t fine enough to drop through the screens, is routinely transferred to a nearby landfill, where it’s spread atop the trash pile. Once again, this six-inch topper of neutralizing material is known as “alternative daily cover.”

Although Recology could convert 100 percent of its green-bin waste into soil-nourishing compost, the practice of using partially processed green-bin waste for “alternative daily cover” is cheap — and it’s perfectly legal under California law. Roughly 10 percent of what gets tossed into the compost bins is used in this way, Recology confirmed.

“There are some people who will say using green waste isn’t really diversion,” acknowledged Jeff Danzinger, a spokesperson with CalRecycle, which oversees recycling programs in California counties. “There’s some people who say we should stop that practice because that just incentivizes a landfill solution for green waste. But if somebody’s saying green waste shouldn’t go into a landfill and get counted as diversion, it’s an opinion.”

Nor is it something the city objects to. The Department of the Environment is aware of this practice, Recology’s Potashner told the Bay Guardian. Yet the city agency has never raised formal concerns about it, despite a mandate under its composting program agreement that the company use green-bin waste for the highest and best possible use.

But there’s no incentive for anyone in city government to complain: Recology may legally count this discarded material as “diverted” in official reporting, thus edging it closer to an annual bonus payment. San Francisco, meanwhile, may count it as part of the 80 percent that was successfully diverted — thus edging it closer to the ambitious Zero Waste program goal.

“It’s great PR to say you’re the highest recycling,” noted the person who was familiar with the company, but wasn’t part of the lawsuit. “It’s almost a movement more than reality. But who’s really watching for the public on these numbers? There’s no watchdog. It’s all about bragging rights.”

 

Recology is “a political business”

Recology’s political connections in San Francisco run deep. Years ago, when former San Francisco Mayor Willie Brown served as speaker of the California Assembly, he also worked as a lawyer for Recology, which was then known as Norcal Waste Systems.

Campaign finance archives show that when Brown ran for mayor in 1995, he received multiple campaign contributions from Norcal employees in what appeared to be a coordinated fashion.

Brown continues to be influential in the city’s political landscape due to his close relationship with Mayor Ed Lee, who himself came under scrutiny in his capacity as head of the Department of Public Works in 1999 when he was accused of granting Norcal a major rate increase as a reward for political donations to Brown.

In 2010, when Recology submitted a bid for a lucrative waste-disposal contract proposing to haul waste to its Yuba County landfill, Lee reviewed its proposal in his then-capacity as city administrator. As the Guardian reported (see “Trash talk,” 3/30/10), Lee recommended far higher scores for Recology than his counterparts on the contract review team, a key to the company winning the landfill contract over competitor Waste Management Inc. Before Lee declared his mayoral candidacy in 2011, news reports indicated that powerful Chinatown consultant Rose Pak had worked in tandem with Recology executives on a campaign effort, “Run Ed Run,” organized to urge Lee to launch a mayoral bid. Company employees had also been instructed to help gather signatures to petition Lee to run for mayor, news reports indicated, but Pak publicly denied her role coordinating this effort. David Anton, the attorney for Brian McVeigh, emphasized that Recology’s close ties to powerful city officials might have something to do with the city’s lack of interest in targeting the company for the improperly received incentive payments. Yet Recology spokesperson Eric Potashner called this assertion “completely untrue. Recology meets with the various city departments and regulators weekly. We are constantly improving our controls and practices for handling the city’s ever-changing waste stream; often at the behest of city regulators.” Recology and its predecessor companies have maintained the exclusive right to collect commercial and residential refuse in San Francisco since 1932, and rates are routinely raised for city garbage customers, based on the company’s own reporting that its costs are increasing. “I can tell you today, there will be another significant increase on July 21, 2016” — five years after the last rate increase — “because they have a monopoly,” said neighborhood activist and District 10 supervisorial candidate Tony Kelly, who previously worked on a ballot measure that sought to have the city’s refuse collection contract go out for a competitive bid. “When you have a closed system … then it’s entirely a black box. It’ll all be self-reported. It’s too powerful of an incentive.” An industry insider familiar with Recology echoed this point, adding that cozy relationships with local officials make it easier for the self-reporting to escape scrutiny. “It’s a political business,” this person said. “In San Francisco, they’re really a political organization.” Since the rate is guaranteed, this person added, the mentality is that there’s plenty of wiggle room for financial losses and expenditures such as generous political contributions. “If you’re losing any money, you just ask for it back when you do your next rate increase. The city doesn’t have any objection. The ratepayers just get stuck with it.” (Rebecca Bowe)