109,577 / 56.65% Yes votes ...... 83,843 / 43.35% No votes

See Also: Index of all Measures

The City borrows money to pay for construction and improvement to its water, sewer and power utilities by issuing revenue bonds. In general, voters must approve the amount and purpose for which the money is borrowed. Bond money may be spent only for purposes approved by the voters.

The Proposal:
Proposition P is an ordinance that would create a committee to oversee the City's use of utility revenue-bond funds. The committee would report to the Mayor, Board of Supervisors and Public Utilities Commission on whether these bond funds were being used for authorized purposes.

The oversight committee could:

• Hold public hearings;
• Review the expenditure of utility revenue-bond funds;
• Review the Public Utilities Commission's capital improvement plans and proposals and other financial records;
• Inspect utility facilities; and
• Hire independent auditors, inspectors and other experts to assist in their oversight activities.
• If the oversight committee found that bond funds were being used for unauthorized purposes, the committee could halt the sale of any remaining bonds.

Proposition P would set aside one-twentieth of one percent of the money from the sale of utility revenue bonds to pay for the committee's activities. This set-aside would not apply to bonds approved before November 5, 2002. Bond money would not be used to pay for the committee's administrative expenses.

Six of the committee's seven members would be appointed: two by the Mayor, two by the Board of Supervisors, one by the Controller, and one by the Bay Area Water Users Association. The Board of Supervisors' Budget Analyst would serve as the seventh member.

If, however, voters approve Public Utilities Revenue Bonds during this election or in the future, the Committee established by this ordinance would receive one-twentieth of one percent of the gross proceeds of each bond to cover the costs of this Committee. As an example, should Proposition A on this ballot pass, the increased cost of government would be $814,000 over the life of the bonds.

Meaning of Voting Yes/No

A YES vote of this measure means:

If you vote "Yes," you want to create this committee to oversee utility revenue bonds.

A NO vote of this measure means:

If you vote "No," you do not want to create this committee.

How to Evaluate the Propositions

Decide for yourself

Note: This entire section is new.

Be it ordained by the People of the City and County of San Francisco: Section 1. The San Francisco Administrative Code Chapter 5, Article 5 is hereby amended by adding Section 5.30 through 5.36, to read as follows: Sec. 5.30. Findings.

The people of the City and County find and declare that:
(a) The City's 100-year-old water, power and clean water public utility infrastructure is suffering from decades of deferred maintenance. The regional water collection and transmission system, stretching from the Tuolumne River headwaters at Hetch Hetchy to the San Francisco County Line, supplies water to the City as well as to 1.7 million residents and businesses in Alameda, Santa Clara and San Mateo Counties. This system is in need of substantial repair and/or replacement. In the event of system failure, the City and its suburban customers could be without water for up to 30 days, with portions of the service area going without water for as long as 60 days. The water distribution and wastewater treatment systems within the City are in a similar state of deterioration, threatening the health and welfare of City residents, visitors and the business community.
(b) Over the past 25 years, funds for upgrading the water collection and power generation facilities of Hetch Hetchy have been in short supply. During this same period, the waste water treatment plants have aged to the point where significant capital improvements are necessary in order for the City to remain in compliance with applicable federal and state water quality regulations.
(c) The San Francisco Public Utilities Commission ("PUC") has never prepared an integrated and coordinated long-term strategic plan consisting of a capital improvement program, a long-range financial plan, an assessment of future utility needs and the evaluation of alternative technologies, private-public partnerships and non-rate payer revenue enhancements. Focusing on short-term planning, the PUC has turned out a series of bond issues, such as Propositions A and B in 1997, which have been promoted to the voters on the basis of broad project generalities. Even within the PUC itself, the list of projects earmarked for specific bond revenues are in a constant state of flux. Projects are frequently delayed and often uncompleted years after funding was approved by the voters.
(d) Over the past 20 years, the PUC has readily consented to the transfer of "surplus" Hetch Hetchy revenues to the City's general fund. Conservatively, these transfers have cost the PUC more than $500 million. During this same period of time, the utility infrastructure deteriorated and rates escalated dramatically.
(e) The PUC estimates that over the next 20 years, the cost of needed capital improvement projects will amount to hundreds of millions of dollars. Although the PUC's capital improvement list undoubtedly contains individual projects that should go forward as soon as practicable, the design, bidding and contract drafting process often takes years to complete. In the absence of long-term strategic planning, individual projects have been frequently delayed and, in some cases, actually abandoned as funding and project priorities unaccountably shifted over time.

(d) To the extent permitted by law, in accordance with Sections 5.35(c) and (d) of this Article, from and after the effective date of this Ordinance one-twentieth of one percent of the gross proceeds from each issuance or sale of public utility revenue bonds shall be deposited in a fund established by the Controller's Office and appropriated by the Board at the direction of the Committee to cover the costs of said Committee.

Section 5.33. Membership.
(a) The Committee shall consist of seven members to be appointed as follows: two members by the Mayor; two members by the Board; one member by the Controller; and one member by the governing body of the Bay Area Water Users Association. The seventh member shall be the Budget Analyst for the Board or his/her representative.
(b) At a minimum, the members appointed by the Mayor and the Board shall, individually or collectively, have expertise, skills and experience in economics, the environment, construction and project management. The member appointed by the Controller shall have background and experience in auditing, accounting and project finance.
(c ) Except as expressly authorized herein, no current officer or employee of the City shall be appointed to the Committee. All members of the Committee shall be subject to applicable conflict-of-interest provisions of local and state law. No vendor, contractor or consultant of the City that performs work funded by bonds issued by the City shall be appointed to the Committee.
(d) Each Committee member will serve for no more than two consecutive terms. Upon their initial appointment, three members of the Committee shall be assigned by lot an initial term of two years and the remaining four members shall have an initial term of four years. Thereafter, each Committee member shall serve a four-year term.
(e) Each Committee member, except City employees appointed to serve as part of their official City duties and the Budget Analyst or employees of the Budget Analyst, shall be compensated at a rate of $100.00 per month during each year of the member's term of office. Such compensation shall be appropriated by the Board without expending revenue bond funds therefor.
Section 5.34. Illegal Expenditures.
(a) If, after conducting all appropriate reviews and independent audit of actual expenditures of revenue bond proceeds by the PUC (or, to the extent allowed by law, any charter entity succeeding to the PUC's authority related to expenditure of revenue bonds), the Committee, after consultation with the City Attorney, determines that revenue bond proceeds are being or have been expended for purposes not authorized by the authorizing bond resolution or otherwise amount to an illegal expenditure or illegal waste of such revenue bond proceeds within the meaning of applicable law, the Committee may, by majority vote of all its members, prohibit the further issuance or sale of authorized public utility revenue bonds which have yet to be issued or sold.
(b) A decision by the Committee to prohibit the issuance and sale of authorized but as yet unissued or unsold revenue bonds may be appealed by the PUC to the Board within 30 days of the Committee's decision. By two-thirds vote of all its members, the Board by resolution may overturn the Committee's decision and remand the matter to the Committee for further consideration consistent with the views expressed by the Board in its resolution.
(c ) Alternatively, the Committee's prohibition on the issuance or sale of authorized but unissued or unsold revenue bonds may be vacated by two-thirds vote of all the members of the Board, if the PUC, in response to the report of the Committee, provides evidence of corrective measures satisfactory to the Board.
Section 5.35. Application.
(a) All public utilities revenue bond authorizations approved either concurrent with or after the effective date of this Ordinance shall be subject to the provisions set forth herein.
(b) All bond authorizations introduced at the Board after the effective date of this Ordinance shall contain a statement incorporating the provisions of this Ordinance in such bond resolution.
(c ) The provisions of this Ordinance shall also apply to all PUC public utility revenue bonds authorized, issued or offered for sale after July 1, 2002.
(d) Section 5.30 (d) of this Article shall only apply to PUC revenue bonds authorized after the effective date of this Article.
Section 5.36. Sunset and Severability.
(a) Unless the Board by ordinance re-authorizes the provisions of this Ordinance for a specified period of years, the provisions of this Ordinance shall expire on January 1, 2013.
(b) If any part or provision of this Ordinance or its application to any person or circumstance is held invalid for any reason, the remainder of this Ordinance, including its application to other persons or circumstances, shall not be affected by such a holding, and shall continue in force and effect. To this end, the provisions of this Ordinance are severable.
(c) The validity of the authorization and issuance of any bonds is not dependent on and shall not be affected in any way by any failure by the Committee, to act in accordance with the provisions of this Ordinance.