FROM THE SUPERVISOR'S CHAMBERS
Tackling our city's debt structure
One of the reasons I ran for District 2 Supervisor was to confront the financial mess at City Hall. I promised to bring my experience as a finance professional and investor to City Hall to help our local small businesses grow and to fight for sound fiscal policies that promote San Francisco’s long-term financial security.
As I began my briefings last month in City Hall on our city’s current budget deficit, I started to take a hard look at our debt structure. I have become particularly concerned with the nearly $1.36 billion of debt that was never approved by voters and currently sits on our city’s books in the form of certificates of participation (COPs).
Over the past decade, $100 million plus in COPs have been issued by City Hall (again, without voter approval) to inappropriately fund both voter-rejected bond measures as well as routine maintenance operations, such as filling our potholes and paving our streets. Simply put, it is financially irresponsible to issue long-term debt to fund these projects and mask the true cost of our city government.
Despite the city’s current economic problems, the use of COPs is bad public policy and fraught with potential for abuse.
We are now paying over $5 million each year in interest payments alone on a $100 million portion of COP debt, which means less money is going toward key economic development programs and
infrastructure projects that need funding. The bottom line: City Hall has been using COPs to kick the proverbial financial can down the road.
Through this practice, City Hall not only burdens future generations of San Franciscans, but we undermine the confidence citizens have in city government and how we manage your money. That is why I have called for a hearing on San Francisco’s debt structure. I have requested that the city attorney’s office, the controller’s office, the mayor’s budget office, and the Board of Supervisors’ budget analyst appear before the Government, Audit and Oversight Committee to discuss the city’s overall debt structure. We need to have a clear and transparent dialogue with the public about what we are doing.
My goal is to create a secure financial future for San Francisco – setting a clear debt policy is an important step in that direction.
The focus of this hearing will be on the legal basis for issuing nonvoter-approved COPs, the Board of Supervisors’ past policy practice of issuing COPs, a comparative analysis on other large California cities and their practice of issuing nonvoter-approved debt, and a discussion on San Francisco’s future debt policy. We are working to schedule this hearing in late March or early April and will be posting the date to our website at www.sfgov.org.
If you have any questions or concerns, you can always reach me by calling the office at 415-554-7752 or by e-mailing me at [email protected]. My legislative aides, Margaux Kelly and Catherine Stefani, are also available to listen and help with any of your concerns. They can be reached at the same number or at [email protected] and [email protected].
As I began my briefings last month in City Hall on our city’s current budget deficit, I started to take a hard look at our debt structure. I have become particularly concerned with the nearly $1.36 billion of debt that was never approved by voters and currently sits on our city’s books in the form of certificates of participation (COPs).
Over the past decade, $100 million plus in COPs have been issued by City Hall (again, without voter approval) to inappropriately fund both voter-rejected bond measures as well as routine maintenance operations, such as filling our potholes and paving our streets. Simply put, it is financially irresponsible to issue long-term debt to fund these projects and mask the true cost of our city government.
Despite the city’s current economic problems, the use of COPs is bad public policy and fraught with potential for abuse.
We are now paying over $5 million each year in interest payments alone on a $100 million portion of COP debt, which means less money is going toward key economic development programs and
infrastructure projects that need funding. The bottom line: City Hall has been using COPs to kick the proverbial financial can down the road.
Through this practice, City Hall not only burdens future generations of San Franciscans, but we undermine the confidence citizens have in city government and how we manage your money. That is why I have called for a hearing on San Francisco’s debt structure. I have requested that the city attorney’s office, the controller’s office, the mayor’s budget office, and the Board of Supervisors’ budget analyst appear before the Government, Audit and Oversight Committee to discuss the city’s overall debt structure. We need to have a clear and transparent dialogue with the public about what we are doing.
My goal is to create a secure financial future for San Francisco – setting a clear debt policy is an important step in that direction.
The focus of this hearing will be on the legal basis for issuing nonvoter-approved COPs, the Board of Supervisors’ past policy practice of issuing COPs, a comparative analysis on other large California cities and their practice of issuing nonvoter-approved debt, and a discussion on San Francisco’s future debt policy. We are working to schedule this hearing in late March or early April and will be posting the date to our website at www.sfgov.org.
If you have any questions or concerns, you can always reach me by calling the office at 415-554-7752 or by e-mailing me at [email protected]. My legislative aides, Margaux Kelly and Catherine Stefani, are also available to listen and help with any of your concerns. They can be reached at the same number or at [email protected] and [email protected].
