Volume 41 Number 40

July 4 – July 10, 2007

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Editor’s Notes


› tredmond@sfbg.com

Fourth of July week is supposed to be slow; when I worked for a daily newspaper, we used to do long stories on the fireworks displays just to fill space on the pages. Not here. There’s so much going on it’s hard to keep track of it all, but here’s a quick rundown on what San Francisco is facing this week:

A bill that would lift a veil of secrecy hanging over police misconduct cases is stuck in the Assembly Committee on Public Safety — and Fiona Ma is one of those holding it up. Ma is a protégé of John Burton, who wasn’t easily intimidated, but she’s acting as if she’s terrified of the police lobby, which has mounted a major effort to kill the bill. It’s crazy — Ma has a fairly safe seat, and unlike some Democrats in marginal districts, she doesn’t have to fear that the cops will back a Republican against her. This is one of the worst moments in her career in Sacramento thus far, and she needs to get off the fence and back the bill when it comes up for reconsideration.

The long-awaited draft environmental impact report for the Eastern Neighborhoods zoning project just came out, and it says just about what I and many others had expected: following the proposals that the City Planning Department is putting forward would wipe out a fair number of blue-collar jobs and would not provide anywhere near enough affordable housing to meet the city’s stated needs. This ought to be a central issue in the mayor’s race (if there ever really is one); I’m not willing to accept as inevitable the loss of working-class San Francisco, and neither should the mayor.

Mayor Gavin Newsom finally signed the Community Choice Aggregation bill (see page 10) — but not with the sort of fanfare you’d expect for a program that could profoundly change the city’s energy future. Sen. Carole Migden has come forward with a bill to ensure that the power from city-owned renewable-energy projects is available to the city and doesn’t have to go into Pacific Gas and Electric Co.’s maw.

Speaking of Migden: who exactly is paying for all those billboards with her face on them, touting her leadership? As we discuss on the www.sfbg.com politics blog, it’s a fascinating question. Michael Colbruno, a spokesperson for Clear Channel, which owns the billboards, refuses to say. He insists that the ads are simply "issue advocacy," which means nobody has to disclose who paid the tab. I’m not going argue campaign law with Clear Channel, but I suspect that Migden knows who gave her this nice present, worth tens of thousands of dollars. Perhaps she’ll share that information with the rest of us.

In the meantime, the folks at the San Francisco Chamber of Commerce — those great champions of open government who love privatization and refused to support the Sunshine Initiative — have a sunshine measure of their own. They want the supervisors to hold hearings before placing anything on the ballot. That’s a direct attack on some recent ballot measures the chamber didn’t like.

I’m all for hearings. Hearings are good. But the law would require that the hearings be held 45 days in advance of the ballot, and that would be a serious drawback for progressives who want to get measures that couldn’t pass the board on the ballot. Frankly, I’m dubious about the chamber’s motives.*

Don’t privatize the golf courses


EDITORIAL Mayor Gavin Newsom has been trying to sell off or privatize city assets for years, and his latest effort is aimed at San Francisco’s three public golf courses (see J.B. Powell’s story, page 16).

Harding, Lincoln, and Fleming aren’t in the greatest shape, and the city poured a bunch of money into spiffing up Harding a few years back and didn’t get much return. So the mayor — with the surprising support of progressive supervisors like Aaron Peskin — wants to hand the links over to private contractors.

That, of course, will mean higher fees at the few places where golfers who aren’t rich can still afford to whack a few balls. It will probably means cuts in unionized city staff. More important, it’s another giveaway of valuable public assets — on the grounds that city officials don’t seem to know how to manage them.

As Sup. Jake McGoldrick, a privatization foe, points out, the Golden Gate Yacht Club and St. Francis Yacht Club were once public assets, and they’re now elitist institutions run as private membership clubs. The golf courses would be the same.

Yes, the courses need some upgrades, which means some public money. But public golf courses around the country are crowded with players who can’t afford (or don’t qualify for) private clubs; there’s no reason the city of San Francisco can’t do just as well as a private contractor in making improvements, generating revenue, and managing the facilities.

If the city really wants to get out of the golf course business — which we think is a mistake — then the supervisors ought to consider the proposal that the Neighborhood Parks Council has put forward and turn some of the links into parks and open space. But this mad rush to privatization — selling off parks, golf courses, and other public assets — has got to end. The supervisors should go along with McGoldrick’s proposal to set up a task force to study the management of the city golf courses and reject the mayor’s privatization move. *

City College’s funny money


EDITORIAL There’s an excuse for every dollar of bond money that the San Francisco Community College District board has misspent in the past 10 years: The cost of construction materials has gone up (thanks to Hurricane Katrina and the rapid industrialization of China). State grants weren’t what the administration expected. One staffer did a bad job with price estimating. The list goes on and on.

But in the end, the truth remains: City College officials have lied to the voters. They’ve taken $130 million in bond money that was supposed to go to one set of projects and moved it to other projects. And they’ve gone $225 million over budget on three bond acts — so they’re preparing to come back to the voters for a fourth infusion of cash.

And all of this has happened without the performance audit that state law requires for community college bonds.

As G.W. Schulz reports on page 15, City College administrators say they never intended to shift the bond money around like tokens in a three-card monte game. It’s just that some projects weren’t ready and some needed more money and some changed in priority — and of course, according to the district’s lawyers, it was all perfectly legal. Maybe so — but it’s awfully fishy and even at best is a serious violation of public trust.

When the voters approve a bond act to pay for, say, a new performing arts center at City College, there’s an implicit assumption that the taxpayer money they agree to spend will actually be used for what they were told. That may not always be exactly possible; once a big institution starts on a half-billion-dollar spending program, a few things won’t turn out the way they were supposed to. That’s why the law allows a little wiggle room. But in the end, overall, most of the money ought to go for what the voters were promised.

And in ballot arguments and presentations to the community over the years, the City College administration and the board have offered a very explicit set of proposals. We’ve seen all those presentations; never once has Chancellor Philip Day or one of the board members told us that the voters would be writing in effect a blank check — that the specific projects listed on the bond act might or might not be completed, or that the money might be shifted somewhere else at the whim of the board at some later date.

That, sadly, is exactly what’s happened — on a massive scale. More than 25 percent of the bond money has been "reallocated" — earmarked for one project, then spent on another. The most obvious and most controversial has been the gym (which City College likes to call a "wellness center"). As we first reported Sept. 22, 2004 (see "Field of Schemes"), the trustees shifted $53 million that we’d been promised would be spent on an arts center and other projects to the gym, which includes a pool so expensive to operate that it’s going to be leased out in the afternoons to a private school across the street.

The wellness center may be a perfectly worthy project (the pool nonsense aside), but it’s not what the voters were told they were approving. And it’s hardly the only example. In one case, Schulz reports, the City College staff clearly knew before election day that the information in the ballot handbook was inaccurate and the money would be spent in different ways than what the voters were promised.

State law requires that public agencies conduct performance audits of these large bond projects — but that’s never been done at City College. Only now, with the District Attorney’s Office crawling all over campus and criminal charges possible, has the board finally approved an audit.

Meanwhile, the college board still hasn’t adopted the San Francisco Sunshine Ordinance — which isn’t surprising, since all of this has the feel of a series of backroom deals. Even some trustees, like Milton Marks III, who don’t outright oppose the reallocations say the money was moved without the board getting proper information from the administration.

City College is too important an institution to have its future (and the needs of the students and faculty) jeopardized by these kinds of political games. The board’s performance audit needs to move forward apace — and the trustees ought to hire someone like Harvey Rose to do a full financial audit of where the money’s gone, why the budget is so badly busted, and what can be done to clean it up.

If the district attorney is investigating possible wrongdoing in some of the campaigns, she might have her staff look into the bond reallocations too. And if indeed this is all legal, then the state Legislature needs to change the law and require that institutions using bond money pay at least a modicum of attention to what the voters were promised when it comes time to start writing checks. *

The City College shell game


Part one in a Guardian series

› gwschulz@sfbg.com

The motto of San Francisco’s community college is "The truth will set you free."

For taxpayers, that’s a painful irony. Since 1997, the district has moved around $130 million in bond money in a fiscal shell game, taking funds that the voters were told would go to one set of projects and spending the money on others.

The half-billion-dollar bond program is now at least $225 million over budget, in part because of what the school admits was shoddy planning, and City College is considering asking voters to approve yet another set of bonds to catch up.

And all of this happened without a detailed performance audit.

Among the transfers and overruns we’ve discovered in a review of the bond program:

<\!s>City College made up for a planned gym’s mammoth budget shortfalls by transferring more than $53 million from other projects, like the new Performing Arts Center, improvements to the Balboa Reservoir (that massive, sunken eyesore of a parking lot west of the Ocean Avenue Campus), and an academic partnership with San Francisco State University.

<\!s>Construction on the Performing Arts Center was supposed to begin in 2004, but it’s gone nowhere. According to the school’s most recent estimates, the center now will cost $125.8 million, an increase of 152 percent from the original $50 million.

<\!s>Two new campuses planned for the Mission and Chinatown neighborhoods are now running a combined $78 million over budget. School administrators this May requested an additional $6 million to complete the Mission campus. Plans for the Chinatown facilities were originally unveiled in 1997 to voters, who were later told construction would begin in 2006. Today the designs are mired in a political battle with neighborhood residents, and City College hasn’t broken ground on the project.

In at least one case, the school has acknowledged that a $1.3 million reallocation took place without prior authorization from its independently elected overseers, the Board of Trustees. Administrators later asked the board to consent to the transfer retroactively.

"We’re always asked to take this money and move it from here to here," complained trustee Milton Marks III, one of the few consistent critics on the board who in the past voted against such reallocations. "It may be justified…. But when I ask if there are programmatic changes, nobody can answer me."

The school calls the transfers "reallocations," and as of May the administration and the board had agreed to shift the bond money five times.

In one case, administrators asked for $70 million in transfers mere weeks after the 2005 election in which voters authorized the school to sell $246.3 million in bonds.

That January 2006 reallocation strongly suggests the office of Chancellor Phil Day knew the school wouldn’t be able to complete the projects described to voters but never corrected the ballot handbook or told the media and the public the truth.

Day agreed to a Guardian interview, then canceled it, citing a schedule conflict. But in board meetings he and his staff have insisted that the transfers were perfectly legal.

The school’s lawyers say reallocations are acceptable under Proposition 39, a state ballot measure passed by voters in 2000 that lowered the threshold in California for passing school and community college bonds.

Other districts have also relied on reallocations as the cost of construction materials has increased globally in recent years due to Hurricane Katrina and the ongoing expansion of China’s economy.

But the San Francisco school has argued the logical extreme — that it can transform voter-approved projects in virtually any way it deems necessary.

"What obligation do we have in our reallocation considerations about making sure that those things get delivered — all of those projects we listed in both [the 2001 and 2005] bond measures?" former trustee Johnnie Carter asked during a meeting Jan. 12, 2006.

"You have no obligation to complete any of those projects," Mona Patel, a bond advisor for the school, responded. "You can complete one of those projects. You can complete all of those projects or anything in between…. It’s solely within the board’s discretion."

Despite that explanation, City College’s woefully short budget projections mean the school might have to return to voters a fourth time to secure funding for two projects already promised the last time City College went to the ballot, in November 2005.

One of those planned facilities was supposed to house a stem-cell-technology training program lauded by Mayor Gavin Newsom in 2005 as a way to help locals compete for jobs in the Bay Area’s growing biotech and life-sciences research industries. The school stripped $25 million authorized by voters from that project and directed it mostly to two other projects running a combined $105 million over budget.

Marks and new board member John Rizzo have urged an expansive performance audit of the bond money, which they say is required under Prop. 39 but had never been completed.

Rizzo and Marks both told us that if unforeseen construction costs, a low number of project bidders, and the lethargy of state regulators are all problems contributing to unpredicted costs, school administrators need to come up with a plan to fix the situation. But the performance audit proposed by Rizzo and Marks would first identify which problems are most severe. Not having it, Rizzo said, "is like flying blindly. We’re just writing checks."

Peter Goldstein, vice chancellor for finance and administration, insisted to us that state law, as interpreted by the school, doesn’t require the type of audit called for by Rizzo and Marks. It simply requires that the school prove it isn’t spending money on projects not presented first to voters. He added that the reallocations weren’t simple but said he couldn’t answer from memory specific questions about the 2005 bond election, including why the school chose to pursue tens of millions of dollars in reallocations so soon afterward, in January 2006.

"They’ve been very difficult decisions for both the administration and the board," Goldstein said. "[This has] not been some kind of snap judgment. We’ve really had to search and try to make sure there wasn’t some way to contain costs otherwise."

The trustees often seem just as confused as the voters may be about the cost overruns. The trail is laid out in thousands of pages of bond proposals and ever-changing explanatory documents, all complete with glossy schematics and computer-generated students looking gleeful as they head off to class at one or another of the new facilities.

The section of City College’s Web site dedicated to its bond projects is difficult to follow. A brief summary of the projects appears in voter guides, but the full bond proposals are filed with the San Francisco Department of Elections, and you’d have to go there to copy or read the tomes, which contain a lot of qualifying paragraphs that look like this one, which refers to an academic building planned in conjunction with San Francisco State University:

"The college will aggressively pursue state and federal funding to support the ‘joint-use’ concept with San Francisco State University. If funds are not forthcoming, the ‘local’ funds will be utilized to support the construction of the new Child Care Center and the new Student Health Service Center."

Such fine-print disclaimers enabled Chancellor Day and Vice Chancellor Goldstein to later depict multimillion-dollar transfers away from academic construction as entirely legal, even though the Child Care Center and health clinic never appeared as official stand-alone projects in bond proposals presented to voters.

Between 2001 and 2005 the school asked for a total of $40 million to construct in tandem with SFSU the joint-use facility, which was slated to include new classrooms and laboratories where students could work toward bachelor’s degrees in education, health care, and child development. The project is now $26 million over budget and remains in the design phase. Since 2003 about $20 million that voters were told was going to the project has been reallocated to other projects facing increased costs.

A facilities manager at San Jose–Evergreen Community College District, Robert Dias, was incredulous when we presented our findings to him. He said he’d heard of cost overruns statewide but "not to this extent."

"We have experienced rising costs, but we planned for it," Dias said. "Construction costs were going through the roof, but we did creative things to manage it."

On the other hand, Fred Harris, vice chancellor of the California Community College System, based in Sacramento, said the figures didn’t necessarily surprise him and that the state as a result has adjusted its guidelines for what individual school districts can claim as costs.*