The Worst-Run Big City in the U.S.

Benjamin Wachs and Joe Eskenazi report via SF Weekly:

It's time to face facts: San Francisco is spectacularly mismanaged and arguably the worst-run big city in America. This year's city budget is an astonishing $6.6 billion — more than twice the budget for the entire state of Idaho — for roughly 800,000 residents. Yet despite that stratospheric amount, San Francisco can't point to progress on many of the social issues it spends liberally to tackle — and no one is made to answer when the city comes up short.

The city's ineptitude is no secret. "I have never heard anyone, even among liberals, say, 'If only [our city] could be run like San Francisco,'" says urbanologist Joel Kotkin. "Even other liberal places wouldn't put up with the degree of dysfunction they have in San Francisco. In Houston, the exact opposite of San Francisco, I assume you'd get shot."...

In 2007, the Department of Children, Youth, and Families (DCYF) held a seminar for the nonprofits vying for a piece of $78 million in funding. Grant seekers were told that in the next funding cycle, they would be required — for the first time — to provide quantifiable proof their programs were accomplishing something.

The room exploded with outrage. This wasn't fair. "What if we can bring in a family we've helped?" one nonprofit asked. Another offered: "We can tell you stories about the good work we do!" Not every organization is capable of demonstrating results, a nonprofit CEO complained. He suggested the city's funding process should actually penalize nonprofits able to measure results, so as to put everyone on an even footing. Heads nodded: This was a popular idea...

Job protection for even the most obviously unfit Muni workers is among the strongest in the city. Peskin had proposed increasing the percentage of employees who could be fired for incompetence from 1.5 to 10 percent. But if that provision were included in the measure, union reps said, they would flood the "No on A" campaign with money and volunteers. "This is a union town," one transit worker warned. "And we expect it to stay that way."

Peskin caved. He had to. This is a union town. You can't reform the city charter without winning an election; winning an election requires union support; and unions — almost by definition — don't want major reform. It would be a paradox — but that would contravene a number of union bylaws.

You can't get San Francisco running efficiently, because that would require large numbers of unionized city workers to willingly admit their redundancy and wastefulness. Inefficiency pays their salaries. "It's been going on for decades," Peskin says.

This problem comes up almost every time the city negotiates labor contracts, which is part of the reason San Francisco is constantly on the brink of fiscal ruin. Politically powerful unions — the progressives are beholden to the service unions; moderates cater to police, firefighters, and building trades; and Republicans ... what's a Republican? — negotiate contracts the city knows it can't afford. Politicians approve them, despite needing to balance the budget every year, because the budget impact of proposed contracts is examined by the Board of Supervisors only for the following year, no matter how long contracts run. According to former city controller Ed Harrington, it has become common practice not to schedule any raises for the first year of a contract, but to provide extensive raises in later years.

The result is a contract that looks affordable one year out, then blows up in the city's face. City employees receive up to 90 percent of their already generous salaries in pensions and many also receive lifetime health care — meaning that as they retire, labor costs soar.

The unions worked their magic on Peskin's Muni reform, gutting the ability of management to fire workers and getting a higher base salary out of the deal. But they did keep their word, and helped the revised Prop. A win at the ballot box. Some good should have come out of that. But it hasn't. That's because unions were only part of the toxic combination that rendered Muni reform impossible, no matter what the voters said.

Prop. A gave Muni tens of millions of dollars in parking meter money that had previously been spread around the city. But even though voters decided that money should go to Muni, city departments found novel ways to keep it for themselves — and then some. Denied funds by Prop. A after 2007, departments began charging Muni for "services" they were legally required to provide anyway. Police charged Muni whenever they went onto transit vehicles; ambulances charged Muni for picking up people off the buses. [Mayor] Newsom, meanwhile, paid his green advisers' hefty salaries from Muni's coffers. By 2009, this was costing Muni about $63 million — more than double what the agency was making in new revenue from Prop. A. Muni is the city's slush fund — even though that money was supposed to go to help your commute. You voted for it.

This is why it's so hard to "reform" anything in San Francisco: Pass a bill giving Muni a dedicated revenue stream, and you end up eviscerating its finances; try to hold Muni workers more accountable for their jobs, and you end up giving them a raise. Muni isn't getting fixed anytime soon, because these are the fixes...

Research by professor Bill Watkins of California Lutheran University over the past decade reveals that San Francisco is shedding its middle-class population at double the state rate. The city, however, is not losing low-income people at nearly the state's pace — and is gaining wealthy residents at far more than California's overall rate. In short, we are replacing our middle class with a rich elite and a burgeoning underclass.

It doesn't surprise me. See They Have Lost Their Minds in San Francisco and I Told You It's a Crazy Crime Zone: The Mayor of Sacramento Robbed in San Francisco.

San Francisco is a living, breathing example of what happens when you have leaders that expect the government sector to solve problems by adding more regulations, more things for government to control and taxing more.

What the anti-private property crowd has done to San Francisco, President Obama wants to do to the nation. Starting with your health.