Volume 41 Number 17

January 24 – January 30, 2007

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The Presidio Trust’s mystery millions


› amanda@sfbg.com

The Presidio Trust just published its annual report for 2006. This slick-looking document is distributed to the national park’s George W. Bush–appointed board of directors — and to the purported shareholders of this quasi corporation, the American taxpayers.

If you just read the executive director’s message, scan the pretty pictures, and glance at the numbers to make sure they’re on the proper side of zero, then this unique endeavor to privatize a national park looks peachy. Revenue is coming in, operating expenses are being covered, projects are getting completed. The goal is to be self-sufficient by 2013 without any federal subsidy; the trust thinks it will meet that goal. Donald Green, a former economist for the Office of Management and Budget and SRI International and now a Sierra Club Presidio committee member, told us he agrees.

"The financial picture, from their point of view and mine, is good," Green said. "They’re already financially viable."

But when the Guardian took a look at the balance sheets, we had a few troubling questions. The investments line in the assets category jumped out at us: it turns out the Presidio Trust has more than $105 million in the bank. Well, not quite in the bank — that money’s actually invested in federal securities. But it’s still a huge pile of cash for a public agency to sit on. The National Park Foundation, another goverment agency chartered by Congress, that collects funding from philanthropists and private corporations to support national parks, had total assets of $81 million for 2005, $58 million of which is invested in marketable securites.

What is all that money for, where did it come from, and why isn’t it being used? And if the trust has so much in the bank already, why did its leaders ask Congress for a $20 million loan for 2008 — on top of $50 million the federal government has already loaned the trust?

The answers — or rather, the lack of answers — demonstrate exactly what’s wrong with Presidio Trust operations.

According to a detail of the assets line item, the trust, which spends about $50 million a year running the park, has $103,031,000 in excess money invested in nonmarketable Treasury securities. About a third of that doesn’t mature until 2029. Another two-thirds — $69,787,000 — has the slightly lower interest rate of 5.02 percent and will drop $2 million of interest into the kitty for 2006, leaving a balance of $105 million.

At the same time the trust is investing in the Treasury, it’s also making interest payments. In 1999 the park borrowed $49,978,000 to jump-start renovations and get some money flowing. So far, the trust has only been paying off the interest on the loan, at 6.12 percent — which translates to a hair less than $3 million per year.

Pause now to consider those numbers: making $2 million in interest, spending $3 million on interest payments. Huh.

According to Dana Polk, the trust’s senior adviser for government and media relations, the $105 million is a combination of money granted by the Department of Defense for environmental remediation, unspent money from the 1999 loan, and money received from various sources and obligated toward various projects.

When we asked for more specifics on how much money came from where and how it’s going to be spent, Polk said there was an itemized detail of that budget line but added, "That’s not a public document."

In other words, the taxpayers don’t get to know what’s happening with their money.

"Often they don’t want to even explain their own numbers," Green said, "which is pretty pathetic for a governmental organization."

What we do know is that when the Army turned over the base to the trust, the Department of Defense cut a $99 million check to pay for the toxic spillage left in 15 areas throughout the park. About half that money has been spent, and places such as Coyote Gulch, Sunset Scrub, and Thompson Reach are now reblossoming into the natural areas they once were.

But in the seven years since these projects began, unknown contaminants and cost overruns for the massive environmental remediation projects have bumped the total price tag from $100 million to $130 million.

A note in the annual report states that $23 million of the overrun is still unfunded and is expected to come from interest earned on investments, "of which $14.9 million has already been earned."

Those of you who are not utterly boggled by these numbers may extrapolate from an above paragraph that the trust is netting about $2 million a year in interest income. It’s going to be a while before the agency has that $23 million to pay for the guys in the Hazmat suits.

Additionally, the report reads, "If cleanup costs for the enumerated sites exceed the $100 million threshold … by $10 million, the Army must seek additional appropriated funds for the enumerated sites."

Polk confirmed the trust is pursuing additional funding from the Department of Defense and from insurance that is carried for the projects.

So why does the trust still need to earn $23 million in interest if it is asking the DOD for the money anyway?

The trust isn’t a bank, so why does it need to sit on so much money rather than spend it on the various projects around the park, many of which are currently funded by tenants or philanthropists? Right now tenants who are leasing space have to pay for their own renovations.

What special projects is the money earmarked for?

There may be a perfectly sound explanation, but we’ve tried mightily to extract it from Presidio officials, and we are, frankly, baffled. Polk refused to answer our questions — and when we pressed her, she said our coverage of the park is too critical. Then she hung up on us.

But $105 million is a lot of money; maybe Polk can explain it to you.

Her direct line at the Presidio Trust is (415) 561-2710. Good luck. *

Make housing, not war!


OPINION As President George W. Bush requests more money to fight the war overseas, a stealth war is being fought here on domestic soil: the war on housing for the poor. Since the Bush administration took power, the public housing program has suffered $1 billion in cutbacks.

As a result, conditions have rapidly deteriorated in public housing developments throughout the country. Maintenance, security, and services have been slashed annually as budgets are drained with each appropriations bill. A climate of violence, fear, and despair has taken hold in the projects, where years of deferred maintenance, toxic and unsanitary conditions, and government neglect are simmering to a boiling point.

As we fought terror abroad, the Republican-led Congress created a breeding ground for terror here at home. Just ask the desperate, homeless families who refuse offers to move to the city’s public housing developments for fear of their lives. Or ask the mothers of children who have been shot at in their front yards while attempting to escape the leaking sewage and toxic mold in their homes.

Yet rather than fight this terror in our own backyards, lawmakers have attacked the very programs that can provide a solution. Job training, education programs, and social services have all been casualties of the war on public housing. Agencies have been forced to make cuts in security and maintenance staff every year. In the past five years alone, the San Francisco Housing Authority has lost 250 employees, a 50 percent cut.

While military spending has continued to rise, the offensive against housing has also escalated. A full $600 million was cut from the 2006 public housing budget, funding housing authorities at only 85 percent of overall need. Layoffs and cutbacks occurred throughout the country as cities began planning for desperate measures such as disposing of properties, raising tenant fees, and increasing response time for repairs. In San Francisco, 26 housing authority staff lost their union jobs last year. As a result, vulnerable senior and disabled residents in high-crime neighborhoods saw their security services eliminated.

Last year was devastating for public housing residents, and the battle is far from over. The generals of the war on housing are out for blood, and it appears that they will not stop until the last vestiges of federally funded, low-income housing are destroyed. This was made abundantly clear recently when the Department of Housing and Urban Development announced that in 2007 housing authorities will be funded at only 76 percent of the actual need. By proposing a budget that is $1 billion short, President Bush has raised the stakes in the fight to preserve our precious remaining federal housing for the poor.

Congress has a chance to increase funding when it passes a spending bill next month. Without an increase, San Francisco will face a $3.5 million shortfall. Our powerful new leadership must take a stand against these unconscionable cuts, which could starve local housing agencies to death.

The only way to avoid increased homelessness; displacement of poor families; loss of union jobs; heightened violence; and turn-of-the-century, tenementlike living conditions for San Francisco’s poorest residents is for our representatives to insist on an increase in funding. Tell Congress to fight the war at home and not the one overseas by sending a letter at www.local-impact.org. *

Sara Shortt

Sara Shortt is the director of subsidized housing programs for the Housing Rights Committee of San Francisco.

Leave pretrial diversion alone


EDITORIAL The San Francisco Pretrial Diversion Project is one of the most successful programs in the city’s criminal justice system. The project works with first-time misdemeanor offenders — people who have committed fairly minor crimes — and gives them the chance to enter a treatment program, avoid jail time, and ultimately clear their records. Over the past three years almost 94 percent of the program’s graduates have stayed out of the criminal justice system — a phenomenal track record.

And yet District Attorney Kamala Harris, who by state law has ultimate control over the program, wants to eliminate the option for a significant number of people. Under her plan first-time battery offenders will no longer be eligible (and remember, battery in this case doesn’t mean aggravated assault; misdemeanor battery is any kind of unwanted touching). Neither will people accused of child endangerment, criminal threats, or indecent exposure.

It’s not that these crimes are always trivial, but a lot of them don’t merit jail time. Jeff Adachi, the city’s public defender, has a real-life example: a middle-aged woman with no prior criminal history left her five-year-old foster child in the car while she ran into a hospital to pick up a medical prescription. Then she passed out in the hospital. When she regained consciousness, she was charged with child endangerment. She would have automatically lost her child if convicted of the crime. Instead, she was able to participate in diversion, avoiding a criminal conviction and its devastating consequences.

The program also saves the city money — potentially big money. More than 500 cases a year go to diversion, and taking any one of those cases to trial could cost the public as much as $100,000. Adachi estimates that the number of offenders eligible for diversion might fall by as much as 25 percent, meaning 125 more needless cases clogging the courts, using up public time and resources — and quite possibly adding to the county jail population.

Harris argues that some violent offenders are getting diversion, but the program has been operating under the same rules for the past 20 years, and its successes have vastly overshadowed any problems.

More important, at a time when even the Republican governor of California seems to realize that the system of locking people away for ever-longer sentences isn’t working, this is a bad statement for a San Francisco district attorney to make. Harris ought to back down and leave the diversion program the way it is. *

Editor’s Notes


› tredmond@sfbg.com

It’s getting a bit creepy how easily and casually we are all starting to joke about global climate change.

It’s not coming, it’s here. My brother is framing houses in a T-shirt in upstate New York. And it’s so cold in California that the citrus crop is ruined. The other day one of my colleagues mentioned that global warming might not make every place warmer; "it’s just going to kill us all."

Maybe it will.

One of the most chilling (sorry) depictions of what’s about to happen comes not from Al Gore’s movie (which was powerful) but from a book called A Friend of the Earth, which is a pretty bad novel by a very good writer, T.C. Boyle. The story line is weak, but the scene — Santa Inez in 2025 — has a strange air of realism. It’s almost impossible to live there in Boyle’s future; the storms are so regular and fierce that only specially constructed homes can survive them, and almost nobody spends much time outdoors.

I have a friend who’s a very, very successful investment adviser, a self-made millionaire several times over, who has been living a dream of a life in Boca Raton, Fla., diving and spearfishing and cruising around on his yacht … and he just sold his place and bought a dirt farm in Kentucky. Florida is going to be wiped out by the hurricanes, he says. He’s also shut down a lot of his business, since he thinks the US economy is going to completely tank soon. He wants to be someplace where he can grow his own food.

I think this is crazy. I’ve never been into doomsday. I have two kids, which by itself is an act of optimism and hope. As we say in my family (which has elevated the art of denial to world-class levels), everything is going to be just fine.

So I laugh about the weather like everyone else. I live way up on a hill; if the ice melts and the sea rises all the way to my doorstep, it will be time to buy an ark. I’ve always been into boats anyway.

But right now it really feels like this is coming at us a lot faster than anyone expected. And the much-heralded moves by the governor of California to reduce greenhouse gases a little bit by a few years from now seem so incredibly puny.

In politics I’ve always felt that intent matters. There are some wonderful programs that don’t work as well as they should, not because of corruption but because the money is inadequate or the staff isn’t properly trained or somebody made some mistakes. That’s different from somebody deliberately lying, cheating, and stealing to game the system.

Pacific Gas and Electric Corp. is a corrupt institution with sleazy lawyers and consultants who abuse the local political system. Carolyn Knee, who was the treasurer for a group fighting on behalf of a ballot campaign for public power in 2002, is a good person who apparently made some mistakes in the complex process of filing all the campaign finance documents on a volunteer basis for a grassroots initiative. And she just told me the SF Ethics Commission wants to fine her $26,700.

There’s something very wrong here. *

A new direction for City College


EDITORIAL It’s time — way past time — for new leadership on the San Francisco community college board. The panel has devolved over the past few years into a patronage-and-sleaze cesspool allowing an out-of-control chancellor to play games with public money, piss off neighborhoods with ill-conceived development projects, and damage the programs and reputation of the school.

The incumbents who have controlled the board for years — Lawrence Wong, Natalie Berg, Rodel Rodis, and Johnnie Carter — have been active participants in all the problems, and we’ve argued repeatedly that all of them need to go.

In this past fall’s election, a challenger, John Rizzo, defeated Carter, giving the board a very different political character. There are now three solid reform votes on the board — Rizzo, Milton Marks III, and Julio Ramos — and one, Anita Grier, who can be cajoled and convinced to join the right side most of the time.

The board will be meeting Jan. 25 to choose a new president, and by most accounts none of the three top reformers can win the job — but Grier probably can, and she’s a decent choice. At the very least, she won’t play the sort of role that Berg has played in the past as a nonresponsive, unaccountable call-up vote for the chancellor. The vice presidential slot is trickier; there’s a move afoot to award that job to Wong just to preserve some political balance. That would be a huge mistake.

Just look at the recent record: several years ago City College took millions of dollars in bond money that was earmarked for a performing arts center and shifted it to pay for a new gym with a swimming pool that will be rented to a private school across the street. Now the college has approved a $122 million budget for a new 17-story high-rise in North Beach that has the neighbors up in arms — and school officials say they aren’t required to abide by the city’s zoning laws.

The board needs a dramatic turnaround, and the only way to make that happen is to ensure that none of the old guard are in any positions of power. Since Rizzo is new to the board, the best candidate for vice president is Marks, who should have been president last time around but was aced out by Berg and her allies.

It’s been an unwritten tradition on the college board that the person who gets the most votes becomes president; in 2004 that was Marks, who came in with more than 160,000 votes. This time it’s Grier.

Based on their respective popularity with voters, the choice between Marks and Wong for vice president is a no-brainer. Wong was reelected with just 88,000 votes — half as many as Marks.

But that’s not the biggest issue. The real point here is that Wong has no business serving as an officer of the community college board, and Marks does.

Electing Grier and Marks won’t solve all the problems at City College — but it will be a big step in the right direction. *

Bruce Blog: Casualty Report