The Weekly Digest (April 7, 2024)

Apr 7

Happy Sunday, Brionies!

Here’s what you need to know about San Francisco politics this week and beyond:

City Hall

Spring Break for Supes: the Board of Supervisors will be on Legislative Recess from April 8 through April 12, per the regularly scheduled Board meeting schedule.

Action item

Check out the campaign to repeal Proposition 47 and either request a petition or sign one here:

Monday, April 8: 11am-2pm, Clement Street and 8th Avenue; 3-6pm, Temple United Methodist Church
Tuesday, April 9: 9-11:30am, Noriega and 32d Avenue; 3-6pm, Golden Coast Restaurant, Ocean Avenue and Miramar Street
Wednesday, April 10: 10:30am-1:30pm, Whole Foods, 1150 Ocean Avenue
Thursday, April 11: 10:30am-1:30pm, Manila Market, 4175 Mission Street; 12-3pm, Irving Street and 22nd Avenue
Friday, April 12: 10:30am-12pm, Safeway, 4950 Mission Street; 12:15-1:30pm, Maple Restaurant, 5820 Mission Street

Happenings around town

Monday, April 8, 8:30am-6pm, Hoover Institution, Stanford University, registration required

What we’re reading

This week, the Chronicle highlighted a scathing new audit of HomeRise, one of San Francisco’s largest providers of affordable and supportive housing. As background, in 2004, Mayor Newsom launched a “Ten-Year Plan to Abolish Chronic Homelessness” that shifted funding away from emergency shelters toward permanent supportive housing, under the “Housing First” philosophy. HomeRise now operates more than 1,500 units at 19 properties across the city, with 250 employees and an annual budget of about $34 million. The city’s current agreements with HomeRise total more than $240 million in loans, grants, and subsidies. Here are some highlights (lowlights?) from the audit:

[G]ross fiscal noncompliance, wasteful practices that misuse taxpayer funds, and spending of City funds on unallowed or questionable costs that diverted funds available for support services to intended housing recipients or facility improvements.
Key financial controls were missing, and problematic practices coupled with high corporate staff turnover and missing oversight heightened the risk of fraud, waste, and abuse at HomeRise.
HomeRise gave staff bonuses of more than $200,000 that were unplanned and unbudgeted, worsening cash flow problems.
Revenues decreased at 10 of 16 properties reviewed, while general expenses increased between 16-50% over a four-year period.
Review of expenses revealed instances of unallowable, imprudent, or questionable spending that did not meet the intent of the City’s grant agreement. Money was spent for fundraising expenses, staff bonus pay, and lunches and gifts for staff.
As of January 2023, HomeRise had 118 active credit cards in use, of which more than one-third, or 40, had credit limits of $10,000 or higher; 21 cards had limits ranging from $15,000 to $70,000.
HomeRise’s cash flow problems continued into 2023, when it had more than $1.2 million in payables over 90 days late and, in one instance, incurred $21,600 in late fees.
Between 2019 and early 2023, HomeRise’s chief executive officer and chief financial officer turned over three and five times, respectively.

You may be thinking, “Is this the same story about nonprofit corruption that I read last week?” Nope! The HomeRise scandal is a newbie, but you may be confusing this story with the one about the United Council of Human Services (annual budget: $28 million), whose executive director was accused of using city funds for personal enrichment. Or maybe you’re thinking of SF Safe, which recently fired its executive director amid allegations that the organization spent $80,000 on luxury gift boxes, limo rides, and a trip to Lake Tahoe; or perhaps you’re recalling Providence, a homeless shelter operator accused of wage theft and labor violations. The regular and repeated patterns of corruption and waste at these organizations call to mind Milton Friedman, who wrote: “The repeated failure of well-intentioned programs is not an accident. It is not simply the result of mistakes of execution. The failure is deeply rooted in the use of bad means to achieve good objectives.”

Dean Preston vs. Big Grocery is heating up. The fact that the Tenderloin lacks a grocery store to serve its residents is a genuine issue, and we agree that every neighborhood – particularly low-income ones with families and elderly residents without cars – should have access to fresh food. Supervisor Preston has been calling attention to this issue, but his suggestions (proposing a publicly-owned grocery store and blaming “unconscionable” corporate decision-makers) reflect his anti-business POV. Preston’s latest tactic is to invoke the 40-year old Neighborhood Grocery Protection Act, which would require notification and community involvement when a neighborhood grocery store plans to close. As this article points out, however, rampant theft – not greedy grocers – is the primary obstacle to establishing a grocery store in the Tenderloin. Public safety (not the operation of grocery stores) is squarely within the state’s responsibility. If the city could assure that, the market (pun intended) will meet the need.

Quick hits

Bill Jackson

The Weekly Digest (April 14, 2024)