October 30, 2003  Volume 9, Number 8
This issue of the BOMA San Francisco Advocate is brought to you by:

BOMA San Francisco Political Action Committee Endorsements for November 4th: PLEASE VOTE!  BOMA's Political Action Committee has made several important endorsements for the November 4th city elections, and urges its members who live in San Francisco to support the following slate:

FOR MAYOR: GAVIN NEWSOM. Gavin has shown the desire, the ability, and the leadership skills necessary to be our next Mayor. His attention to the city's quality of life issues resonate with both local residents and the business community, which includes commercial property owners and managers. No other candidate has taken the political risks that Gavin has in promoting a new approach to homelessness [Care Not Cash] and panhandling [Proposition M] in the city. He is an advocate for making city government more user-friendly, and for greater accountability in all city services. He does not support adding new taxes on San Franciscans and supports reducing the size of local government. For these, among many reasons, BOMA presented Gavin Newsom with its Public Official of the Year award at its October 15th annual business meeting. BOMA's PAC also urges his election as our next Mayor. To make a contribution, or get involved in the campaign, check out his website: www.newsomformayor.com.

FOR DISTRICT ATTORNEY: BILL FAZIO. Although BOMA's PAC was impressed with Kamala Harris' intelligence and desire to make the office of District Attorney more effective, the PAC ultimately decided that Bill Fazio, whom it had supported twice before for this office, was still the best qualified person for the job, and the one who would be toughest on criminal behavior in the City. The recent SF Chronicle expose on Terence Hallinan's abysmal record of successful prosecutions has only verified what our organization has lamented for years: quality of life crimes are not deemed important by his office and are not being prosecuted in San Francisco. As a result, our city has become a haven for public drug use, public drunkenness, and indecent behavior. Bill Fazio will clean up our town by enforcing these laws that maintain our city's beauty and allure for tourist and residents alike. Bill Fazio is a prosecutor with 20 years of experience and a 90% conviction rate. Check out his website: www.billfazioforda.org.

CITY BALLOT PROPOSITIONS:
Yes on Proposition C. This proposition will enable the City Controller to also function as the City Services Auditor to directly demand full accountability of certain city departments including Public Works and Parks and Recreation, and to ensure that these departments fulfill their budgeted goals each year. This measure, created by San Francisco SOS, is also supported by most community organizations, political organizations, local political leaders, and the business community. This measure will be the second major step in creating a "results-oriented" city government. [The first was passage of Prop E in 1999 which created an independent municipal transportation agency for the city.]

Yes on Proposition D. This proposition will empower the current small business commission, and will give it the independent charter status it deserves to ensure it has funding and can continue to be a strong voice for the city's small business community.           

Yes on Proposition K. This transportation funding measure will extend the ½ cent sales tax for local transportation projects for 30 years, beyond the current expiration date of 2010. Passing Prop K will enable the city to issue bonds more effectively for much-needed transportation improvements including maintaining and upgrading existing infrastructure and transit operations, repaving streets, providing paratransit service for the disabled, and new projects such as the downtown extension of the Third Street rail line, extension of Cal-Trains to a new Transbay Terminal, creating a Bus Rapid Transit system on Van Ness and Geary Boulevards, and rebuilding Doyle Drive, currently the most dangerous elevated roadway in California.

Yes on Proposition M. This Gavin Newsom-sponsored measure will ban offensive/threatening/aggressive panhandling in public places. It will ban solicitation within 20 feet of ATM machines or check-cashing businesses, on public transportation, on median-strips, at on/off ramps, and in parking lots. This legislation will effectively define what constitutes illegal public solicitation for the purposes of enforcement, something the current laws do not do. Part of this legislation will also allow violators to reduce or eliminate fines through voluntary participation in a drug/alcohol treatment or mental health services. BOMA has been joined in support of this proposition by the Golden Gate Restaurant Association, San Francisco Chamber of Commerce, SPUR, Committee on Jobs, the Downtown Association, Small Business Network, Union Square Association, the San Francisco Realtors, San Francisco Apartment Association, the Coalition for Better Housing, and many other groups concerned about the explosive growth in panhandling in the city.

San Francisco Supervisor Sophie Maxwell Meets with BOMA
Supervisor Sophie Maxwell, who represents the Potrero Hill-Bayview-Hunters Point neighborhoods of southeast San Francisco (District 10), met with BOMA's Government and Public Affairs Committee on October 21 and discussed her current legislative priorities which include improving the environment and creating new jobs in the city. Specifically, she is: 

Monitoring the progress of the Hunters Point shipyard cleanup and development of over 500 acres, with 200 acres to be set aside for business uses;

Establishing a BioSciences Taskforce to bring the city, community groups and business interests together to promote the growth of this new industry in San Francisco;

Supporting the Closure of the old Potrero and Hunter's Point power plants while having new (and smaller) peaker plants built in various parts of the City, not just in her district; and

Ensuring that the youth of the City are given the jobs and training required to work on the planned major city-funded public works projects including rebuilding the Hetch Hetchy water system and the Laguna Honda hospital.

The Supervisor expressed frustration with the huge amount of conditional use permit appeals currently going before the Board, and did not like changing projects already approved by the Planning Commission. She expressed interest in an idea to raise the threshold of supervisors who must agree to hear an appeal from the Planning Commission from the current number of five to eight. She also stated that she believed the next city budget would have to be cut back, but that this effort would have to be balanced with ways to raise more revenue. [She did not take a position on raising the transfer tax proposal being suggested by Supervisor Gonzalez.] She also expressed concern that the city is too dependent on tourism, and needs a more diversified local economy. Having recently returned from a trip to Vancouver, BC, Supervisor Maxwell noted her admiration for its dense high-rise housing in the downtown areas and hoped the same model would be applied in San Francisco, especially in locations well-served by public transportation. She supports community based planning to create specific tracts or zones that will give developers certainty in the process, a key element in the cost of new housing. Lastly, she stated her support for a new Home Depot on Bayshore Boulevard at the site of the old Goodman's Lumber store.

Supervisor Fiona Ma Creates New City Tax Revenue Review Committee
Under the leadership of Supervisor Fiona Ma, District 4 (Sunset area), the city's revenue sources are being scrutinized by a gathering of city labor and business interests to determine if there are ways to restructure the tax system to incentivize the growth of business and the creation of new jobs in the city. Much information is being shared from the Controller's office showing where current city general funds are expected for FY '03 -'04. The breakdown shows an anticipated 24% will come from property taxes, 12.8% from payroll taxes, 5.6% from sales taxes, 4.1% from the local hotel tax, 3.1% from local utility taxes, 1.5% from parking taxes, 2.5% from property transfer taxes, 7.1% from Federal funding sources, 22.8% from state funding sources, 4.4% from local service charges, etc. Although the group is not charged with looking at city expenditures, several organizations, including BOMA, the Committee on Jobs, and the Realtor's Association, have called on the Supervisor to make this information also available so potential efficiencies in current city services can be identified by the group. A consultant is being considered for retainer who studied how Los Angeles brings in its general revenues. Supervisor Ma has expressed her interest in reducing the payroll tax burden as she considers it to be a key deterrent to job growth in the city. The city's General Fund for this fiscal year is budgeted at $2.196 billion. (These figures do not include San Francisco School District funding.)

BOMA's Annual Codes Seminar is November 6th! Have You Signed Up?
BOMA's popular annual codes update will be presented on Thursday, November 6th, at the San Francisco State University Downtown Center, 425 Market Street, Room 2601, from 8:30 a.m. to 11:30 a.m. Topics to be covered will include the Office Tenant Improvement Process, the new Path of Travel Certification Permit, the latest updates on both the Building and Fire Department's permit processes, and  "real world scenarios" that will give you helpful tips on how to expedite your permit requests, and projects. Speakers will include: Gordon L'Estrange, architect with Ottolini, Booth & Associates, Ron Tom, Spencer Gosch, and Laurence Kornfield of DBI, Barbara Schultheis of the San Francisco Fire Department, and Brad Tardy, Construction Manager for Boston Properties. Special thanks are extended to this year's major sponsor: the San Francisco Electrical Contractors Association. Additional support is being generously provided by Alliance Roofing, CAC Real Estate Management, and Peacock Construction.

BOMA Creates "Real Estate Wish List" for Next City Mayor
If you had the opportunity to tell the next San Francisco Mayor what specific issues were important to you, what would you say? In a recent query to our BOMA Government and Public Affairs Committee, here is some of what they said:   

Work on Enhancing and Improving San Francisco's Economy

1. Focus on initiating policies that will create more jobs in San Francisco, including new jobs tax credits.

2. Re-establish and fund a strong economic development program for the City in partnership with the private sector.

3. Oppose any new local taxes such as a gross receipts tax or an increase in the property transfer tax, or a local income tax.

4. Immediately establish a top level task force including representatives from the Public Works, Parks and Recreation, the Police, and other key city departments, to put together an action plan for cleaning up the city NOW.

5. Get 'Care Not Cash' passed and implemented.

6. Push to develop a downtown sports arena, which would be a major shot in the local economy.

7. Revisit the idea of granting naming rights for Candlestick Park and other venues, and create objective criteria for this action.

Planning/Building Issues

1. Create enterprise zones in the city that are master-planned for specific types of economic development as "ready to build" sites.

2. Fully fund a top-rate Planning Department, and require it to set fees that are fully recouping costs for discretionary reviews.

3. Oppose anti-Chain Store legislation as it is detrimental to the city's future tax base and is anti-free market/free customer choice.

4. Create a permanent city fund to reward people who give the police information that leads to the arrest and conviction of graffiti taggers. Give property owners assistance in cleaning off graffiti and a reasonable amount of time to do before fines are assessed.

5. Change the minimum number of Supervisors needed to agree to hear an appeal from the Planning Commission from the current 5 to a supermajority of 8. The Board of Supervisors now have direct authority over appointments to the Planning Commission, so it is no longer necessary or appropriate for the Board to second-guess every Planning Commission decision.

6. Introduce a charter amendment which would give the Mayor an equal ability to veto any appointments made by the Board of Supervisors to all city commissions which currently grant the Board of Supervisors the ability to veto Mayoral appointments. This action is necessary to restore a balance of power at City Hall for affected commissions.

7. Make all city government departments more internet-based in the delivery of their services and information. Immediately install an automated internet-based central permit application and tracking service for the Planning and the Building Departments.

8. Speed up the installation of the multi-vendor pedestal newsracks throughout the city.

9. Support adoption of a construction and demolition debris recycling ordinance which requires the use of city-certified haulers and processors for such material, but does not intrude on the building permit process if such vendors are utilized.

General City Budget/Structural Issues:

1. Create a task force to study modifying district elections to include fewer districts and a number of at-large seats.

2. Support the SPUR recommendation to return city employees to paying for half of their pensions, about 7.5% of the city's payroll, as was the practice before the early 1990s. This would save up to $90 million a year, according to a recent estimate.

3. Freeze city employment at current levels, and reduce costs while increasing efficiencies in city government, as outlined in SPUR's white paper published in May, 2003, entitled Crisis and Opportunity in the City Budget

4. Do not support an elected Rent Board, or any change in the state law allowing a split-roll tax system.

5. Allow for more outsourcing and private sector contracting by the City, especially with San Francisco-based businesses.

6. Require annual audits of various city departments to determine if performance goals have been met.

New State Fire Extinguisher Requirements
As of January 1, 2003, California will begin to regulate the maintenance of fire extinguishers. Rather than undergoing annual 'teardowns', or full discharge and maintenance, the rule will require a teardown every six years but external visual tests must be performed and recorded monthly.  For further details, visit the State Fire Marshal's website where a study guide has been posted: www.osfm.fire.ca.gov/fireextinguisher

BOMA Updates San Francisco Land Use Policies/Alerts Members to Sprinkler Retrofit Law Deadline
The BOMA Land Use Policies were recently updated by the Government and Public Affairs Committee with the significant help of Lee Gotshall-Maxon, Esq., of the law firm of Allen, Matkins, Leck, Gamble & Mallory LLP. These general policies deal with city planning, zoning, permits, parking, taxes, assessments, and fees. Check here for a copy of the policy.

San Francisco's retrofit high rise sprinkler ordinance is scheduled to go into effect on February 15, 2006. Are you ready for it? Click here for a copy of the ordinance.  Click here for a copy of the list of exempt and non-exempt buildings. A survey of members and the potential need to request an extension is currently underway. Thanks to all who have responded already!

BOMA Submits Energy Policy Recommendations to Governor-Elect Arnold Schwarzenegger
BOMA California recently submitted a set of policy recommendations to the Governor-elect on energy matters affecting commercial real estate. Prepared by Bill Roberts, President of Economic Sciences Corporation, and a member of BOMA San Francisco's Energy Committee, this document focused on the key elements necessary in a policy that encourages conservation, reduces government regulation and bureaucracy, while allowing a better monitored private energy market to bring down the cost of energy to the state's business and industrial customers. Specific points presented included:

1.  The state needs to promote private investment in the state's energy infrastructure.

2.  The state must re-establish and develop competitive retail markets for all customer classes. Consumers should be free to elect direct access at any time and negotiate forward contracts containing any mutually agreeable pricing, and other terms, with a competitive retailer.  Exit fees for users electing direct access should be set at levels that have already been established by the CPUC.

 3.  The state must support and promote more customer on-site generation with a simplified on-site authorization process. Net metering (at real time pricing) should be the rule for all on-site units.  Any unit that meets air quality standards and can produce power below the real time price of electricity, should be allowed to sell excess power through the grid.

4.  The state must support and promote the real-time sub-metering of all commercial buildings to enhance tenant participation in energy conservation. Installation should be performed by the distribution utilities and the costs should be amortized and paid through fixed monthly customer service charges. Sub-metering will also facilitate more equitable allocation of energy costs among tenants.

5.  The state must consolidate all of its various energy-related agencies and departments into one cabinet level state Energy Agency, including the PUC, the CEC, the CPA, and other agencies that direct the state's energy policies and practices.

 6.  All consumers should have the right to know the amount and cost of the power that they consume, when they consume it.  All service, whether residential, commercial, direct or bundled, should have real-time pricing applied. Web sites should be offered by the utilities and/or private providers that allow all customers virtual real time access to their energy consumption data and real time prices. 

7.  Electricity should be priced at the CAISO (California Independent System Operator) real time wholesale spot price plus an at-cost transaction fee. Setting the default price at spot plus transaction cost will set the commodity rate at true cost of service, and will correct the inter-class rate inequities (excessive charges to commercial users) that have been established through the current regulatory process. It will also eliminate the need for future wasteful, contentious commodity rate regulation. Smoothed payment plans could be offered to consumers to spread the impact of temporary price spikes. Consumers requiring financial assistance should receive aid in the form of direct subsidies rather than through electricity rate reductions.

8.  The state should be open to all competitive electricity retailers who should meet state credit and resource standards (and are not affiliated with the local distribution utility).  The state should continuously monitor and assess the credit worthiness and the energy resource portfolio adequacy of retailers to inform and protect consumers.

9.  A permanent program for returning consumer energy taxes through the financing of energy related capital expenditures (rebates and/or loan guarantees) should be a part of the new energy policy. The funding for these investments should be allocated based on their ability to reduce energy loads (and grid vulnerability) in the state.

10.  The primary mission of the distribution utilities should be efficient distribution service. The additional provision of default bundled commodity service should be performed on a cost pass through basis.  The distribution utilities should not offer any other retail commodity services and should not own any generation resources except currently held hydro and nuclear capacity (see #11 below).  Regulation of the distribution utilities should be through a simplified performance-based process, requiring only multi-year setting of distribution charges.

11.  The low production costs of the hydro and nuclear generation units currently retained by the investor-owned utilities should be equally shared by all consumers who have already paid the capital costs for those generation facilities -- consumers receiving direct access service as well as those receiving bundled service.  While ownership can continue to be held by the distribution utilities, and their operations regulated, the production from these generators should be sold in the spot market, and the price over cost margin should be placed in a special account and used to pay down the DWR power purchasing debt.

A group of prominent economists issued a document during the height of California's 2000 energy crisis wherein they stated, "Electricity should not be a political commodity.  The laws of supply and demand cannot be ignored except at great peril." With Governor Schwarzenegger we have the opportunity to set California's energy policies on the right track, where they will be built on economic principles rather than on the political compromises and expediency of the past.