The Worst-Run Big City in the U.S.

Spend more. Get less. We're the city that knows how.

In 2002, the San Francisco Chronicle revealed that the city had, for decades, been siphoning nearly $700 million from its Hetch Hetchy water system into the San Francisco General Fund instead of maintaining the aging aqueduct. Several mayors and boards of supervisors used that money to fund pet causes, and the Public Utilities Commission didn't say no. Unfortunately, spending maintenance money elsewhere doesn't diminish the need for maintenance. By 2002, the water system was in such desperate condition that voters were asked to pass a $3.6 billion bond measure to make overdue fixes. Obligingly, they did — who doesn't like water? Since then, the projected costs have swelled by $1 billion. So far.

Back in 1999, San Francisco voters were pitched a $299 million bond to "save" Laguna Honda Hospital as a 1,200-bed facility for the city's frail, elderly population. Who doesn't want to help the frail and elderly? A decade later, the Department of Public Works project is still incomplete, its price tag has swelled by nearly $200 million, and the hospital is slated to hold only 780 beds — so the city is going massively overbudget to construct a hospital only 65 percent as large as promised, which is four years behind schedule.

Amazingly, this gets worse. After securing the bond funding to save Laguna Honda as a hospital for the elderly, the Department of Public Health began transferring younger, often dangerous and mentally ill patients there and mixing them among the old people. This went about as well as you'd think: A 2006 state and federal licensing survey noted numerous instances of elder abuse, staff abuse, and patients toting drugs, alcohol, and even loaded weapons. One patient was assaulted four times in four months; to address this problem, staff erected signs reading "No Hitting." (That didn't work.) To cap it off, elder activists now worry that a 2009 Department of Public Health–commissioned report will pave the way for even more relatively young, mentally ill patients heading to Laguna Honda. The massively overbudget, behind-schedule hospital may not even end up primarily serving the elderly population that voters were promised it would.

Sources: City budget documents, interviews with city controllers’ offices, and 2008 Census data (the latest available).
Sources: City budget documents, interviews with city controllers’ offices, and 2008 Census data (the latest available).
A broad coalition of city governmental bodies joined to ruin Muni reform.
Jim Herd
A broad coalition of city governmental bodies joined to ruin Muni reform.

These are dramatic examples of how the city wasted time and money and made people's lives miserable — with no apparent repercussions for those responsible. But these are far from isolated incidents (see the "Annals of Incompetence" sidebar on page 12). And in each case, it comes back to the same basic problem of accountability: Plenty of public figures make promises, but no one is responsible for keeping them.


This city is a mecca for people in search of a government handout that they can hand out. According to a 2009 analysis, San Francisco spends around 41 percent of its discretionary budget — about half a billion dollars — on nonprofits, mostly to provide social services for the poor, homeless, elderly, and others.

Many cities contract with nonprofits because it's cheaper than using city workers. Government is now paying the tab for services that used to be undertaken by families, churches — or, frankly, no one. But a 2009 University of San Francisco study notes that this city is to nonprofits what New York is to big musicals: "Per capita expenditures by operating nonprofits in San Francisco are almost double that of the rest of the Bay Area, and more than twice that found in Los Angeles or [the whole of] California."

We want the services. We're willing to pay for them, if they lead to good results. Yet whether our gargantuan investment is paying off is a question no one has an answer to. Hardly anyone even bothers to check. As far as much of the city is concerned, ignorance is bliss.

In 2007, the Department of Children, Youth, and Families (DCYF) held a seminar for the nonprofits vying for a piece of $78 million in funding. Grant seekers were told that in the next funding cycle, they would be required — for the first time — to provide quantifiable proof their programs were accomplishing something.

The room exploded with outrage. This wasn't fair. "What if we can bring in a family we've helped?" one nonprofit asked. Another offered: "We can tell you stories about the good work we do!" Not every organization is capable of demonstrating results, a nonprofit CEO complained. He suggested the city's funding process should actually penalize nonprofits able to measure results, so as to put everyone on an even footing. Heads nodded: This was a popular idea.

There are two lessons here. First, many San Francisco nonprofits believe they're entitled to money without having to prove that their programs work. Second, until 2007, the city agreed. Actually, most of the city still agrees. DCYF is the only city department that even attempts to track results. It's the model other departments are told to aspire to.

But Maria Su, DCYF's director, admitted that accountability is something her department still struggles with. It can track "output" — what a nonprofit does, how often, and with how many people — but it can't track "outcomes." It can't demonstrate that these outputs — the very things it pays nonprofits to do — are actually helping anyone.

"Believe me, there is still hostility to the idea that outcomes should be tracked," Su says. "I think we absolutely need to be able to provide that level of information. But it's still a work in progress." In the meantime, the city is spending about $500 million a year on programs that might or might not work.

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3 comments
axelham
axelham

Great article. But where's the reader's call to action? If only the author had enunciated what to do as clearly as the problems at hand.. It's certainly good to be informed, but this does little to empower - I still feel helpless.

 
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