San Franciscans may not be pleased to learn the return on these pooled funds is less than 1 percent. The largest contributor to this pool of funds is the San Francisco Public Utilities Commission, which contributes approximately 30 percent, or $1.7 billion. You may be surprised to find out the SFPUC pays approximately 4.5 percent to revenue bond coupon holders for its $1.7 billion invested in this pool. The high cost for this excessive liquidity is unexplainable. Proper independent oversight of the SFPUC would not allow for such disastrous results.
There does exist the Board of Supervisors Treasury Oversight Committee that is supposed to ensure that proper investment strategies are optimized. This is where the devilment begins. One only has to take a look at the track record of the past and present members of this committee and recall how these same individuals worked to destroy the Revenue Bond Oversight Committee, which was established by you, the voters, in 2002.
To refresh your memory, as a supervisor in 2002, I, Tony Hall, placed on the ballot Proposition P, which created a truly independent Revenue Bond Oversight Committee for the SFPUC. That panel was specifically tasked with reviewing the SFPUC’s revenue bond expenditures.This commission also has the unique power to stop additional unnecessary bonds from being issued. You, the public, wisely passed this proposition, which put a definite crimp into the politicians’ and money managers’ self-serving practices at that time.
The present members of this Treasury Oversight Committee, along with at least two of the past members, are all very aware of the intent of Prop. P and the independent controls mandated by the Revenue Bond Oversight Committee. They are also very aware that without any controls or outside independent review, they can do with your money what they decide is best for you, while at the same time satisfying special interests and political agendas.
Creating more public debt via well-publicized but unnecessary bond issuances is par for the course today for politicians who know nothing about true leadership or genuine public welfare.
But this is so egregious — roughly $6 billion earning less than 1 percent, while costing us 4.5 percent — and just too obscene to be ignored. The foxes that usurped the Revenue Bond Oversight Committee under guise of independent oversight are now the very caretakers of this great amount of money.
Do you see how the game works? If you can eliminate any independent outside scrutiny, you can really manipulate public intent.
There are far too many instances of backroom dealing involved with individuals tasked with the oversight of the money to list here. The failure of these past and present members of the Treasury Oversight Committee to implement Prop. P alone should have been cause for permanent dismissal from public service, or at least from any position involving fiscal oversight.
The most amazing phenomenon is that these retreads keep appearing, especially with the mayor and the Board of Supervisors reappointing them to positions of oversight.
It is better to have no oversight than the illusion of oversight from people like this.
Tony Hall is a former member of the Board of Supervisors. Brian Browne is a former member of the board’s Revenue Bond Oversight Committee.