A Source at City Hall
Prop K – Will the public notice?
The November ballot is long and tiring, but there is
a measure on it called Proposition K. Wags are saying it means “Kiss
off the Fangs,” but it's about money and the influence newspapers
have upon the electoral process. Technically Proposition K would
change how the city awards its public notices or advertising
contract. This contract includes advertising meetings, contracts,
and things like who has property tax liens, all printed in 6-point
type. In truth, few actually read public notices.
The San Francisco Independent has held this contract
since 1994. That year, the Independent placed Proposition J on the
ballot, which established a point system to award the contract to
the benefit the San Francisco Independent. It removed the old
requirement that the “lowest responsible bidder” win the contract.
Precise dollar amounts on current costs have been difficult to
extract from the Controller’s office, but San Francisco spent close
to $1.49 million on public advertising between July 1, 2001 and June
30, 2002. The bulk of that money went to the San Francisco
Independent. In 1994, the last year the contract was competitively
bid, the old Hearst-owned Examiner bid $302,000 and the San
Francisco Independent bid $493,000. This represents a 493% increase
in the cost of public notices, whereas the rate of inflation for the
years 1994-2002 is equal to 21%.
San Francisco closed a $175 million deficit in
fiscal year 2002-2003, which runs from July 1, 2002 through June 30,
2003. Given uncertainties about the national economy and the
hard-hit tourist economy, which is dependent upon both disposable
income and consumer confidence in boarding aircraft, estimates are
that the city will face a $200 million deficit next year.
Money is part of the calculus on Proposition K. So
is politics. The Fang family owns the San Francisco Independent but
in 2000 also picked up the old Hearst Examiner for a $1 with the
help of Mayor Willie Brown, then Attorney General Janet Reno, and
Senate Judiciary Committee member Dianne Feinstein. The Fangs even
banked a $21 million annual subsidy from the Hearst Corporation for
three years to consummate the deal.
The Fangs are not shy about whom they support and
oppose in city politics. They practice a politics that is high on
rewarding friends and punishing enemies. They helped drive then
Mayor Art Agnos out of office in 1991. That election demonstrated
what their newspaper could do. In 1995 they made the switch from
Mayor Frank Jordan to supporting Willie Brown. Politically they had
a good run for the first five years of the Brown administration.
However, when the public mood changed in 2000 with the election of a
new Board of Supervisors, they also suffered. For example, their
strong endorsement of Kimiko Burton for public defender did not
enjoy much traction even on the west side.
Supervisor Jake McGoldrick defeated the Fang-backed
candidate in District 1 in 2000 by a 52% to 48% margin. He defeated
Michael Yaki, who had won a full seat on the citywide Board of
Supervisors in 1996 after spending years as the district
representative to Congresswoman Nancy Pelosi. It was an upset for an
ESL teacher from the University of San Francisco who was best known
as a neighborhood activist and perennial opponent of Residential
Builder Association projects at the Planning Commission.
McGoldrick is the primary sponsor of Proposition K,
along with Supervisors Tom Ammiano, Chris Daly, Matt Gonzalez, and
Aaron Peskin. It replaces the 1994 Proposition J formula with new
criteria to select a bidder based upon cost, circulation, and cost
to the reading public. Newspapers would also have to verify their
circulation figures. Proposition K opens up the competition to
weekly publications not currently allowed to compete for the main
contract, so more than two newspapers could qualify for the city’s
advertising business. Conservative estimates are that it will save
taxpayers $300,000 a year. If the Controller’s $1.49 million
advertising cost holds, savings could be greater. Given the fiscal
backdrop, there are worse times to look at sacred cows.
Opponents of Proposition K such as Independent
columnist Warren Hinckle argue that it would shutter the doors of
the San Francisco Independent and remove requirements that a bidder
publish in San Francisco. Additionally, opponents argue that it
eliminates affirmative action criteria in the 1994 Proposition J
formula, which rewards women- and minority-owned firms. The charge
against the first argument is that by limiting the contract to firms
that publish in San Francisco, it artificially constricts who gets
to compete for the contract. The affirmative action arguments are
muted by the fact that the city already has a program to assist
disadvantaged minority- and women-owned businesses administered by
the City’s Human Rights Commission but that the Fangs don’t qualify
because they are not a disadvantaged firm. Supreme Court rulings
bolster this definition of affirmative action.
Proposition K is about the fiscal realities San
Francisco confronts and whether public subsidies to one publishing
family with a distinct niche in local politics are appropriate. Most
political endorsements will side with the Fangs based upon recent
history and the emotion called fear. McGoldrick has been and will
continue to be vilified in the San Francisco Independent and
Examiner. The open question is whether the public mood that has run
against the city’s politically dominant Democratic machine in recent
elections will extend to changing how money is spent on public