Proposition P - Revenue Bond Oversight Committee

What it does

This measure would establish a Public Utilities Revenue Bond Oversight Committee to oversee expenditure of the PUC's capital improvement bonds.

Why it is on the ballot

The big picture on the PUC bond program is fully explained under Proposition A, the PUC Bond, and Proposition E, PUC Water and Sewer Rates. Proposition P was placed on the ballot by four supervisors. It was developed in response to a group of citizens who have been opposing the PUC for years, who authored 1997's Prop H, the rate freeze which is bankrupting the PUC, and who do not trust the PUC to implement its adopted long range capital plan.

Pros

Those who support Prop P state:

• The PUC cannot be trusted to spend bond funds properly, and must have powerful oversight.

Cons

Those who oppose Prop P state:

• The alternative is Proposition E, which is an excellent reform measure designed to complement the Prop A bond and already contains a full range of oversight and protections needed to assure responsible conduct of the capital improvement program.
• While the PUC has not had a history of maintaining the system or managing capital improvements well, the current capital plan, financial plan, and management plan have been through four separate independent reviews, including by a Blue Ribbon Committee convened by SPUR, and has received excellent marks. The PUC has a new professional general manager, and the program is in better shape than it has been in years.
• Fraud or illegal use of funds simply has not been an issue, and to imply it in an ordinance is simply irresponsible.
• The payment to members of what is essentially a citizen advisory committee is unprecedented and should be vigorously resisted.
• It is inappropriate to have the Supervisor's Budget Analyst, a paid consultant, as a member of a citizens advisory committee. If his expertise is needed, he can be assigned by the Supervisors to perform specific tasks, for specific budgets.
• It is even more inappropriate to have a member of BAWUA on this committee, which oversees San Francisco 's system and San Francisco 's bonds, which have no effect on BAWUA. The legality of a non-San Francisco organization power over San Francisco is unique and untested. BAWUA will be adequately represented on the Joint Powers Board to be formed under the Speier bill, which is their appropriate role.
• This measure allows a citizen committee to stop bond sales after authorization; this will make the PUC's bonds virtually worthless on the bond market. Like Prop H that emanated from the same individuals and is bankrupting the PUC, this measure could stop improvements to the water system in its tracks. That would inevitably bring about the threatened take over of our water system by the State.

SPUR's analysis

The Committee would consist of seven members, two appointed by the Mayor, two by members of the Board of Supervisors, one by the Controller, and one by BAWUA, the Bay Area Water Users Association (which is the association of suburban water customers on the Peninsula). Appointments are for fixed four-year terms. The Board of Supervisors' Budget Analyst (a consultant under contract to the Board) is the seventh member

Each Committee member would be paid $100 per month, to come from sources outside of the bond funds. The Committee also may spend up to one twentieth of one percent of the gross proceeds from each bond sale, at their discretion, to cover expenses. The measure states that if the Committee, after consultation with the City Attorney, determines any illegal spending of bond proceeds, they may prohibit issuance of authorized but unissued bond funds.

The measure is a mean-spirited attempt by a small group of people to thwart the PUC on principle.

SPUR strongly recommends a "No" vote on Proposition P.