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 advertising.