Reject Prop. B Bond Measure

Deceptive Prop. B Mailers Exploit LHH’s Patients

List of Projects Prop B Would Fund Nowhere to Be Found

Editor’s Note:The Westside Observer does not endorse candidates or issues; opinions of its authors and reporters are their own, not the Westside Observer.

by Patrick Monette-Shaw

• • • • • • • • • • October 16, 2024 • • • • • • • • • •

Amailer recently sent by the “Healthy, Vibrant SF, Yes on B Committee” featuring registered nurse Abigal Williams, who works at Laguna Honda Hospital, is shamelessly deceiving voters to pass Prop. B.

The mailer is essentially crying wolf. It warns voters that LHH’s HVAC units, a power transformer project, and other of LHH’s aging infrastructure could collapse, placing LHH patients’ lives at risk. It’s a cheap ploy to tug at voters’ heartstrings to shame them into passing the $390 million bond measure.
The pitch isn’t just ridiculous; it’s also insulting. It may also be an outright lie because the Capital Planning Committee didn’t even approve funding for LHH’s HVAC and power transformer projects on May 6, 2024, that LHH had estimated before May 2024 would cost up to $12.5 million.

It’s not known if Ms. Williams knew the mailer would deceive voters. That’s because although the mailer implies an LHH “power transformer” project might be funded from Bond spending, a separate “Emergency Power” project at LHH was identified to be funded using the “Certificates of Participation” financing scheme, not via general obligation Bond funding.

Neither Williams nor the mailer mentioned that in September 2024, LHH reported to San Francisco’s Health Commission that LHH had filed two so-called “Facility Reported Incident” reports with the California Department of Public Health (CDPH) involving “power outages” that had occurred at LHH during August 2024. Whether CDPH issued citations and/or penalties against LHH for power failures affecting LHH patients’ well-being is unknown.

The failure of the City to prevent power outages at LHH and allocate money to fix the emergency power problems at LHH is shocking! Shocking, in part, because the Board of Supervisors approved $28.4 million in emergency repairs for LHH to help it become recertified, including $8.2 million earmarked for repairs named LHH’s “Emergency Power Replacement in September 2023.” It’s unclear if the “emergency repairs” were simply performative and toothless, without actual funding attached and supplied. Almost a year later, LHH reported having “power outages.” LHH’s emergency power problems were identified way back in 2010, shortly after its replacement hospital opened for business.

Some observers have noted the mailer is a pathetic ploy to, once again, use LHH to get more money from taxpayers who have been bamboozled into funding a hospital that was rendered unsafe and inaccessible, and faced potential closure due to its Federal decertification in April 2022. Others believe it is shameful B.S. from Mayor Breed to use LHH like this, when so much has already been spent and is still required to be spent to gain LHH’s recertification.

Unfortunately, how much of the $390 million bond will actually be used to fund critical infrastructure at LHH is completely unknown, and it was deliberately kept hidden from voters before they cast their ballots on November 5.

A pre-election Prop. B marketing Bond Report for the “2024 Healthy Safe and Vibrant SF Bond” presented to the Board of Supervisors on July 10, 2024, engaged in semantic backflips using vague language that Bond funds for SFGH and LHH “could allow” funding projects at LHH like LHH’s rooftop HVAC units, “could fund” replacement of LHH’s power transformer, and “could allow” funding of LHH’s emergency wastewater holding system. That system was estimated to cost $5.6 million, but the CPC approved just $3.2 million for the project, leaving $2.4 million in funding support not approved.

That’s a lot of “could-a’s” and “might-a’s”
Unfortunately, the “Bond Report” does not list which projects willbe funded, and perhaps none of those projects will receive any of the bond funds. Worse, Prop. B’s legal text also does not contain any lists or names of, which specific repair projects at either SFGH or LHH will be funded from the $66 million being set aside in the $390 million bond for our two City hospitals.

During a July 10 Supervisor’s Budget and Finance hearing, only seven of the 11 Supervisors had signed on as sponsors. Supervisors Connie Chan, Dean Preston, Ahsha Safai, and Shamann Walton did not initially support the bond. It was eventually placed on the ballot unanimously by all 11 members; then, Mayor Breed jumped in as an official proponent of the measure.

What Prop. B Will Fund

The bond was larded up with “extras” by Mayor Breed and the Supervisors to sweeten the pot. They are counting on voters who support parks and recreation centers to help pass “Prop. B.”

Unfortunately, the $390 million bond allocates just $66 million — only 32% of the bond — requested by our two hospitals. The rest of the $390 million ($324 million) is for other totally unrelated projects. Almost half — 47.4% — of spending is earmarked for largely frivolous projects that have nothing to do with public health, despite Prop. B’s misnamed title “Community Health and Medical Facilities,” as shown in Table 1, below.

This isn’t the first time street and sidewalk improvements and park and recreation facilities have been piggy-backed onto critical Bond funding initially identified as public health-related.

On June 7, Supervisor Connie Chan was vehemently opposed to larding up nearly 50% of this Bond measure with non-public health projects.

And as for the $50 million set aside in this bond earmarked for “interim” homeless housing sites, there’s no explanation of why Prop C, passed in 2018 to fund homelessness projects using a dedicated gross receipts tax-funded account, isn’t already enough. That’s the same account Mayor Breed has tried to raid from providing homelessness solutions. Now she wants another $50 million of this $390 million to fund programs that should have been funded by Prop. C?

Capital Infrastructure Backlog at SFGH and LHH

On May 6, 2024, the City’s 11-member Capital Planning Committee (CPC) — made up of City department heads and the president of the Board of Supervisors — released its 15-page list of Capital Improvement projects requested by only 18 of the City Departments for the next two fiscal years.

For the two-year period, requested funding totaling $868 million — much of which is deferred maintenance that City Departments have neglected to keep up with annually.

After the CPC met and deliberated on May 6, it submitted a memo announcing which capital improvement projects received funding approval.

The CPC’s list of approved funding requests was required before the Prop. B bond measure could be developed and then placed on the November ballot.

The CPC’s list of approved funding reveals there was $203.2 million in combined capital repair projects that SFGH and LHH had requested for Fiscal Years 2024–2025 and 2025–2026, shown in Table 2. The CPC memo approved just $11 million in projects across the two hospitals.

Shamefully, the $11 million the Capital Planning Committee did approve for SFGH and LHH represents just 5.4% of the combined $203.2 million the two hospitals requested. The $192.2 million that was not approved represents 94.6%. It might easily take two decades for the CPC to approve the full funding requests — which by then will have mushroomed due to inflation and construction cost “creep”! And that’s ignoring future funding requests.

Separately, the Capital Planning Committee approved $7.5 million (in addition to the $11 million for capital repair projects) for annual facilities maintenance for LHH and SFGH combined across the two Fiscal Years, which could be used for some of their capital repair projects.

There were 24 projects on LHH’s two-year list, totaling $68.5 million, and another 25 projects on SFGH’s one-year list (FY 24–25 only), totaling $134.7 million, for a combined total of $203.2 million.

LHH’s list of 24 requested projects shown in Table 3 to receive Capital Planning Committee approval is worrisome, in part because the Committee approved only $11 million of the requested $68.5 million for all projects LHH requested and in part because only six of the LHH’s 24 backlogged repair projects were approved.

LHH’s six projects that did receive approval had requested a total of $16.5 million be approved but were approved for just $11 million — leaving $5.5 million of those six projects not fully approved.

Deceptively, the Prop. B mailer didn’t mention that project ID #1060 “Power Transformers” project, is for the old LHH hospital used for administrative offices, not for patient care areas in the replacement facility that opened in 2010.

Of note, of the $11 million approved for LHH’s six projects the Planning Committee recommended that LHH’s “Emergency Power” project (project ID #1055) be funded by issuing $4.5 million in “Certificates of Participation” (COP) — not bond financing. Elsewhere, the “Emergency Power” replacement project is estimated to cost $8.2 million — so the $4.5 million in COP may fund only half of that project.

On September 12, 2023, the Board of Supervisors passed Resolution #422-23, an Emergency Declaration to approve $28.4 million in emergency repairs at LHH for eight specifically-named repair projects.

It is thought the Board’s Resolution was simply a performative action, mainly passed to demonstrate to the Centers for Medicare and Medicaid Services (CMS) that San Francisco would fund the repairs in order to get LHH recertified and prevent it from being closed down.

The $11 million the Capital Planning Committee approved on May 6 may be the down payment on the $31.2 million for the eight projects the Supervisors and Mayor approved in September 2023.

As noted, the $2.5 million for LHH’s “Power Transformers” project #1060 and the $10.6 million HVAC replacement project (#1075) mentioned in the campaign mailer weren’t even approved by the CPC. Obviously, that $13.1 million not approved exceeds the $11 million the Capital Planning Committee did approve. Why does the HVAC system installed just 14 years ago need urgent replacement?.

All of the SFGH list of projects costing $134.7 million shown in Table 4 were for its main campus, not other health centers. Unfortunately, the Capital Planning Committee didn’t approve any of SFGH’s requested 25 projects.

That none of those 25 projects for SFGH received Capital Planning Committee approval on May 6 suggests that kicking those projects down the road will only increase their costs in future years.

“Prop. B ”: A Misguided Boondoggle

Supervisor Connie Chan, in her role as Chairperson of the Board of Supervisors Budget and Finance Committee, wrote to Mayor Breed in a June 7, 2024 letter:

Chan’s letter to Breed indicated that Chan was concerned that elements of the Bond proposal were a departure from the “City’s Ten-Year Capital Expenditure Plan.”

Chan’s letter went further, essentially criticizing the larded-up projects included in the bond that have nothing to do with public health projects.

Chan informed Breed that including of $68.9 million for street improvements in the proposed $390 million bond, plus $30 million for public plaza and parks improvements might reflect important infrastructure needs, but were obviously not critical public health safety needs.

A separate Budget and Legislative Analyst (BLA) report indicated street improvement projects and public plaza and parks improvements in the proposed bond totaled $134.9 million, not $98 million.

However, as Table 1 shows, those non-public health “sweetener” projects total $184.9 million, 47.4% of the total bond. They’re all unrelated to critical public health projects!

Chan noted that alternative funding sources for those non-public health projects should be explored. Chan enumerated a list of alternative funding sources. She seemed adamant they should not be included in “Prop. B.”

Quite clearly, had the $184.9 million shown in Table 1 for the non-public health “sweetener projects” been used for LHH and SFGH instead, that $184.9 million could have funded nearly all of the $192.7 million shortfall the two hospitals Had requested shown in Table 2.

But Breed wouldn’t budge, and Supervisor Chan’s advocacy to focus on critical public health projects lost out!

The BLA report also noted this bond is estimated to have total debt service payments of $737 million, including approximately $347 million interest on the bond and the $390 million in principal.

For most bond measures, the City Controller, in the Voter Guide, unequivocally states that property tax rates will not increase. Warning: Homeowners and building owners should not be surprised if their property taxes go up if Prop. B passes.

The BLA also requested that city departments report the criteria that will be used to prioritize projects that receive funding, either at the June 26, 2024, Budget and Finance meeting or in a letter to be included in the legislative files for these items. But as of July 10, 2024, there were noletters in the background materials from any City Department, and not in either of the June 26 or July 10 “Committee Packets,” including a response to the BLA or to the Board of Supervisors on how projects will be prioritized for Bond spending should Prop. B be approved by the voters.

The Director of Public Health, Grant Colfax, asserted during public meetings of the Health Commission that Prop. B will “fully fund needed capital repairs for SFGH and LHH.” He wasn’t telling the truth.

Although this proposed Bond increased funds for SFGH/LHH capital projects by $10 million — from $56 million initially announced to the final $66 million — this bond won’t “fully fund” either of the SFGH and LHH facilities’ capital projects.

Finally, voters should take note that of the $66 million allocated for SFGH and LHH in the Prop. B bond, only $11 million of the projects received approval from the Capital Planning Committee in May 2024.
And there’s no list of previously approved projects for SFGH and LHH not listed in Tables 3 and 4 that were approved in prior years and may receive the $55 million in funding from the bond. Voters have no idea which projects will receive the bond funding.

Voters should not forget that if the Prop. D commission reform ballot measure passes on November 5 and San Francisco’s Health Commission is eliminated as proposed, there will be no Health Commission oversight of how the Prop. B money will be spent. For all we know, the $66 million set aside in the bond earmarked for SFGH and LHH critical infrastructure repairs might get replaced with the $18.5 million “Childcare Center” (project #1105 in Table 4) on SFGH’s campus.

Given concerns in this article — principally that a full list of projects to be funded by this bond will only become known and explicitly named at the point City Departments return to the Board of Supervisors seeking approval to sell the Bonds years later, if this bond gets passed by voters — I’m voting No on Prop. B.

Readers and voters should too, until San Francisco reforms how the project identification process is finalized prior to placing Bond measures on the ballot, and then resorting to begging — and misleading — voters to get Bonds passed!

Monette-Shaw is a columnist for San Francisco’s Westside Observer newspaper, and a member of the California First Amendment Coalition (FAC) and the ACLU. He is a Childless (and catless) Cat Daddy, and voter for 50 years. He operates stopLHHdownsize.com. Contact him at monette-shaw@westsideobserver.com.

October 2024