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

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

This includes San Francisco's signature initiatives. Is Newsom's pet project, Care Not Cash, "meeting its goals" as his office claims? Hard to say: "We neither investigated the number or percentage of clients participating in support services by individual service, nor attempted to assess the outcomes of clients participating in services," the controller's 2008 audit reads. This means the city paid for support services for more than 2,200 homeless people, but never tracked how many were actually using the services. It also never checked whether those who were using the services were helped by them. While Care Not Cash has undoubtedly found housing for some people, it has no evidence to suggest that their lives are better because of it, or that they're not still spending time on the streets getting into the same trouble they got into before.

According to Elizabeth Boris, director of the Washington, D.C.–based Urban Institute's Center on Nonprofits and Philanthropy, effectively managed nonprofits must demonstrate "financial integrity, transparency, and some indication of what the nonprofit has accomplished over time." Right now, it's hard to conceive of most San Francisco agencies meeting those criteria.

The city continues to toss millions annually into programs that don't quantifiably help people. But the city is effectively taking cash from one program that does demonstrably help people. That would be Muni.


Mayor Gavin Newsom ponders the differences among the Accountability Matrix,
Accountability Index, and Accountability Report.
Mayor Gavin Newsom ponders the differences among the Accountability Matrix, Accountability Index, and Accountability Report.

People don't usually yell at the Rules Committee. There are rules against it. At a July 2007 committee meeting, however, people were yelling. Mostly at Aaron Peskin.

The then-president of the Board of Supervisors had proposed sweeping Muni reforms to get the transit system running on time and on budget. National transit experts said Peskin's proposal was solid; it was later approved by the voters in 2007 as Proposition A. Since then, Muni has slashed services and raised fares, and is facing a bigger budget crisis. That shouldn't have been a surprise — Muni reform started unraveling on that June day, when dozens of transit union workers "testified" in front of the Rules Committee.

Job protection for even the most obviously unfit Muni workers is among the strongest in the city. Peskin had proposed increasing the percentage of employees who could be fired for incompetence from 1.5 to 10 percent. But if that provision were included in the measure, union reps said, they would flood the "No on A" campaign with money and volunteers. "This is a union town," one transit worker warned. "And we expect it to stay that way."

Peskin caved. He had to. This is a union town. You can't reform the city charter without winning an election; winning an election requires union support; and unions — almost by definition — don't want major reform. It would be a paradox — but that would contravene a number of union bylaws.

You can't get San Francisco running efficiently, because that would require large numbers of unionized city workers to willingly admit their redundancy and wastefulness. Inefficiency pays their salaries. "It's been going on for decades," Peskin says.

This problem comes up almost every time the city negotiates labor contracts, which is part of the reason San Francisco is constantly on the brink of fiscal ruin. Politically powerful unions — the progressives are beholden to the service unions; moderates cater to police, firefighters, and building trades; and Republicans ... what's a Republican? — negotiate contracts the city knows it can't afford. Politicians approve them, despite needing to balance the budget every year, because the budget impact of proposed contracts is examined by the Board of Supervisors only for the following year, no matter how long contracts run. According to former city controller Ed Harrington, it has become common practice not to schedule any raises for the first year of a contract, but to provide extensive raises in later years.

The result is a contract that looks affordable one year out, then blows up in the city's face. City employees receive up to 90 percent of their already generous salaries in pensions and many also receive lifetime health care — meaning that as they retire, labor costs soar.

The unions worked their magic on Peskin's Muni reform, gutting the ability of management to fire workers and getting a higher base salary out of the deal. But they did keep their word, and helped the revised Prop. A win at the ballot box. Some good should have come out of that. But it hasn't. That's because unions were only part of the toxic combination that rendered Muni reform impossible, no matter what the voters said.

Prop. A gave Muni tens of millions of dollars in parking meter money that had previously been spread around the city. But even though voters decided that money should go to Muni, city departments found novel ways to keep it for themselves — and then some. Denied funds by Prop. A after 2007, departments began charging Muni for "services" they were legally required to provide anyway. Police charged Muni whenever they went onto transit vehicles; ambulances charged Muni for picking up people off the buses. Newsom, meanwhile, paid his green advisers' hefty salaries from Muni's coffers. By 2009, this was costing Muni about $63 million — more than double what the agency was making in new revenue from Prop. A. Muni is the city's slush fund — even though that money was supposed to go to help your commute. You voted for it.

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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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