Dollars Without Sense

For 25 years, Harvey Ross has rooted out the waste and lies of politicians and bureaucrats. But some say he's too lost in the line items to see the big picture

The politicians then announce that everything must be put on the table: service cuts, layoffs and -- gag -- increased taxes. "Tough decisions have to be made." "Everyone is going to feel the squeeze." "There are no untouchables." (More actual quotes.)

Act II: Enter the constituencies. Department heads howl as if enduring amputation without the benefit of anesthesia. Business leaders and their smarmy lobbyists offer studies that prove they're taxed more onerously than the 13 colonies. (In 1992, when a taxation study sponsored by the Committee on JOBS, the political arm of corporate San Francisco, showed that the local tax burden was moderate compared with other cities, COJ lobbyists shitcanned it. They commissioned another study from JOBS member Arthur Anderson, and carefully selected the right benchmarks to ensure the desired outcome: San Francisco taxes are higher than those in most cities.) Advocacy groups and unions pound the mayor's and the supes' doors (literally, sometimes precipitating armed police response), promising total war if welfare benefits are cut or if union wages are frozen.

Act III: The plot thickens. State and federal aid to the city is reduced. Progressive supes threaten to throw themselves off the City Hall dome before cutting services. Slinging the rhetoric of class warfare, some supes propose new taxes on big business but never muster the votes to pass them. Meanwhile, those loath to offend powerful CEOs -- a group that includes a majority of the supes and all recent mayors -- yammer about government efficiency but never follow through on proposed reforms.

Act IV: Midway through the process, the projected deficit magically doubles in size. Again, officials feign surprise and shake their fists in impotent anger at the heartless careerists in Sacramento and Washington. (Actually, they're exhaling in relief because they now have a distant bogeyman to divert attention from their own ineptitude.)

Act V: Boxed in by politics and fiscal realities, the mayor and the board make a few marginal cuts and enact fee hikes (which hurt low-income residents most), and a tax increase (usually targeting small businesses) in order to appear fair. But the deficit just ... won't ... go ... away. With the clock ticking, our sweating stewards of government adopt serious parental tones and talk about tough choices. "We have to make some fundamental changes in the way we do business," Supervisor Kevin Shelley said in 1992, presaging nothing. But then, at the last minute, the music swells, someone dashes into the boardroom and stops the rusty budget ax midswing! To applause from all sides, the savior declares that a secret stash of money has once again been uncovered and democracy has been preserved.

The supervisors and mayor wipe their brows, hug, weep, congratulate each other. The disaster averted, they scurry back to their full-time jobs: raising campaign donations and angling for higher office.

Curtain call? Nope. As the press and the pressure groups return to other pursuits, San Francisco city department heads queue outside City Hall and request millions in additional funds because the mayor and the board have underfunded the budget. So the stage is set for the annual sequel: The Midyear Budget Crisis.

During the furious three-month period (June to August) the board grapples with the budget, Rose provides a critical service. The only boardwide adviser, Rose alerts supervisors to unreasonable projections in the mayoral budget. (San Francisco's mayors routinely underestimate police and fire overtime costs by millions, knowing full well those two departments will demand -- and win -- more later.) Rose also searches for places in the budget to cut, all with the board stipulation that the reductions not affect service levels.

The remainder of the year, the Harvey M. Rose Accountancy Corporation, in joint venture with four other minority and women-owned firms, audits city departments at the supervisors' direction. He also costs out all new legislation that will have fiscal impact. This legislation can range from supplemental budget requests for the district attorney to a costly new program that monitors juvenile delinquents.

The Rose firm performs similar work for the Santa Clara County Board of Supervisors, and various California and Arizona municipalities. These are Rose's only clients, and he claims to earn a total of $105,000 a year from them, making him as well paid as the upper echelon of public servants.

Walking his beat, the budget analyst regularly uncovers all manner of embarrassing fiscal malfeasance. Rose once caught City Attorney Louise Renne buying fancy oak furniture costing $171,000 more than the standard government-issue desks and chairs. (Renne had hidden the cost of the furniture in her moving bill, and convinced supervisors she needed the lush digs to improve morale.)

Last year, Rose scored big when he audited San Francisco's workers compensation system and discovering that the city would save $1.1 million if injured city workers were admitted to the University of California at San Francisco and San Francisco General Hospital for treatment instead of the more expensive St. Francis Hospital. Supervisors took his advice.

The same year, he took a scrub brush to negotiations over the now-famous public toilets the French firm of J.C. Decaux contracted to place on city streets. Rose revealed that the company had under-estimated the pissoirs' kiosk advertising revenues by $44 million. Armed with this information, the supervisors laid claim to a portion of the ad revenue.

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