Who Benefits from Green Benefit Districts? Part Two: From Petition to Immortality

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By Rupert Clayton, HANC Housing & Land Use Chair

Formation

With a few self-appointed local board members, a $100/hour consultant and a cheerleader from DPW, the green benefit district (GBD) formation committee is ready to roll. Their challenge is to find a way to get the owners of 30% of local property to sign a petition backing their plan (more on exactly what this means below). Other California cities have a 50% threshold, but not us. Thanks to changes during the Newsom administration, San Francisco has other unique GBD provisions, such as allowing residential property to be included (elsewhere in California, these districts apply only to commercial property) and allowing the eventual GBD to repay costs incurred by the formation committee.

Nevertheless, this 30% petition level is reportedly the biggest hurdle, and so GBD formation committees spend a lot of time (and that DPW seed money) surveying property owners to figure out where to draw the boundaries to maximize the petition response level. As an example, PlaceLab has apparently estimated startup costs for the Inner Sunset GBD at $500,000. Expect extensive efforts to woo the largest landlords in the putative district by talking up the effect on property values and tailoring the list of services to suit their particular preferences.

Services

This is the point where the formation committee will also draw up a budget for the GBD and decide how to structure the levy that will pay for it. Taking the Inner Sunset GBD as a case in point, the proposed annual budget is running at a little more than $1 million, of which as much as $150,000 will be spent on salary for the GBD executive director, plus extra for benefits. (Recently, the Inner Sunset GBD formation committee has sought to hide the true salary figure by splitting it among various budget categories.) What’s left over after the ED’s salary will be split among services for residential and commercial property owners. The budget is funded by fees that are levied based on attributes of each property, such as lot size, building area or frontage length.

So what services do GBD property owners get for $1 million a year? In theory, GBDs are strictly prohibited from duplicating existing public services. The idea is that these are additional perks for special neighborhoods.

In reality, the things that GBD proponents tout most widely are street trees, public park renovations, “street furniture”, wayfinding signs, sidewalk cleaning, and “outreach services & crime prevention”. You may notice that many of these services are already available in our city. Friends of the Urban Forest has an excellent, long-running street-tree program. Rec and Parks has been the beneficiary of several huge bond measures in recent years, plus a budget set-aside with guaranteed annual increases. And good luck trying to persuade DPW to leave wayfinding signs or other “placemaking” staples out of its public realm projects. So, in essence, GBD services can be summarized as stuff we’re already paying the city for, other stuff we already get at lower cost, and street patrols to shift homeless people and steam clean the sidewalks.

Petition

Having drawn boundaries, selected services and created a budget, the next step is for the committee to gather signatures from local property owners to petition the Board of Supervisors to place the GBD formation on the ballot. San Francisco code requires this petition to be supported by property owners who will pay at least 30% of the planned assessments. By the way, this petition is just for property owners and their representatives. This does include absentee landlords, even non-resident non-citizens, but not renters or commercial tenants.

Don’t imagine that opposition to the GBD from many of your neighbors is enough to stop it going ahead. The fact that the voting is weighted by assessment value means the views of individual owners may count for little. As an example, the largest 27 parcels in the Dogpatch GBD make up 40% of the voting weight. By getting these properties on board, the formation committee was almost guaranteed a successful petition. More shockingly, four of those properties are owned by the city and two more by Caltrain, both of which voted “Yes”. So, city and regional administrators can vote to tax property owners to fund additional services.

The rules for how the petition drive is conducted are quite murky: there don’t seem to be any requirements for a neutral party to distribute, count or validate the petition; it’s unclear if there’s a time limit on gathering signatures; and there’s no provision for public scrutiny of the process. What we do know is that only “Yes” responses count. Even if owners representing 70% of the assessment are opposed, 30% in support is enough to request an election.

Election

Once the Board of Supervisors gets a petition that exceeds the 30% threshold, they direct the department of elections to put the matter on the ballot. This is a mail-only election, with property owners having 45 days to return their ballots, and responses are weighted based on the fee that would levied. This stage is much less challenging for the GBD backers than the petition phase, because it only requires a majority of the properties that vote – ballots not returned are excluded.

In the case of the Dogpatch GBD, property owners representing only half of the assessed fees responded, and because the “Yes” votes (38% of the assessment) exceeded the “No” votes, the GBD was approved. In total, “Yes” votes for property owned by the city, UC and Caltrain accounted for more than a quarter of the votes in favor of the Dogpatch GBD.

Immortalization

Once the Board of Supervisors certifies the result, the formation committee is in charge until a private, non-profit corporation is formed to run the GBD, at which point property owners elect a board of directors (likely made up primarily of the original GBD boosters) and appoint someone to the lucrative executive director position.

You might imagine that if the GBD proves to be a mistake, you can just vote it out again. Well you can, under very limited circumstances. Typically, there’s a 30-day period once a year when property owners can submit a petition to disestablish the GBD. That requires support from owners representing 50% of all assessments. You may note that this is far higher than the 30% threshold for the initial petition or the 50% of votes cast in the formal GBD ballot. And this time you won’t get $500,000 of free money to fund your campaign. Even if you get 50% support to disestablish the GBD, all your petition does is require the Board of Supervisors to consider the matter. They’re under no obligation to terminate the GBD if it serves their interests.

But don’t we want clean streets and greenery?

Certainly, many of the services that GBDs provide could be a true benefit to our neighborhoods. Cast aside the $150,000 executive director job, the anti-homeless patrol and the wayfinding signs, and we can all get behind trees, planters, landscaping and street cleaning. But we really don’t need a two-tier public service system and more bloated layers of bureaucracy to accomplish this. Most of this stuff can and should be funded through regular city taxes and fees, and delivered as a uniform service across all the city’s neighborhoods, not just as a special privilege for the gentrified ones.

So, when the GBD fairy comes knocking with tales of sugar plums and sylvan glades, remember that there’s a dirty little undemocratic process at work here. Don’t sign the GBD petition. And if this gets as far as a ballot, vote “No” to oppose GBD formation.

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