Making Your Mark

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San Carlos Rewarding Monumentally Bad Behavior

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Some time ago my colleagues agreed to a suggestion I made about having staff put our banking services contract out for bid. While the then-current provider, Wells Fargo, had been providing services for enough years that it was good practice to re-bid the service, there was a more important reason to do so. At least for me.

Because it was Wells Fargo, and they’d been caught opening millions of fake accounts in order to make money off unsuspecting customers.

At last Monday’s Council meeting staff presented the results of the bidding process, recommending the Council award a five year contract (with renewal clauses) to…wait for it…Wells Fargo.

I was, needless to say, pretty disappointed in this recommendation. Consider the following quotes from various news reports about the scandals at Wells Fargo (emphases added):

  • “…[Wells Fargo] paid out more than $4 billion in settlements and fines since September 2016…”
  • “…Wells Fargo branch employees opened perhaps millions of fake accounts without customer knowledge.”
  • “…much of it stemming from problems that came to light following the sales scandal [i.e., the opening of those fake accounts].”
  • “…problems have emerged in nearly every major business in the bank.”
  • “…it sold unnecessary insurance coverage to auto-loan customers and charged improper fees to mortgage customers.”
  • “…[Wells Fargo is] in the process of refunding customers tens of millions of dollars related [insurance products], which also include pet insurance and legal services [geez, pet insurance?!? how low can you go??].”

These are not the signs of one-off mistakes or a small group of rogue employees. These are the signs of deep-seated, pervasive unethical behavior (note: I am not arguing that every Wells Fargo employee was behaving unethically — just that enough were to call into question the ethics of the entire organization).

Interestingly, the reason Wells came out on top of staff’s analysis is because (a) the ranking criteria did not include any consideration of unlawful or unethical behavior and (b) bids had to be “plug compatible” with the way the City currently handles its financial activities (i.e., requiring changes to existing procedures and processes was a down check). Which, as an aside, kind of gives a leg up to whoever happens to hold the current contract.

The Council voted 4 to 1 to accept staff’s recommendation, and award the contract to Wells. That decision may or may not be reversible (many of our decisions have to be voted on twice, by law, to come into force, but I don’t know if this is one of those). But even if it can be changed, it’s unlikely to be reversed without public outcry.

Too bad.

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Community Foundation Update

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For the last six months resident volunteers have been working hard to set up a new community foundation aimed at improving the quality of life in San Carlos. At last night’s Council meeting they presented an update on where they are in the process and where they plan to go.

This effort was initiated when the Council earmarked $2,000,000 of the $6,000,000 PG&E Line 147 settlement as a potential endowment for a new foundation (it’s potential because the Council hasn’t yet voted to commit or transfer the funds, in part because the new foundation isn’t set up yet).

The residents gearing up the new foundation represent a cross-section of San Carlos: long-term residents, recent arrivals, people with fundraising/not-for-profit experience, business people, parents with school age children, parents with grown children, people without children. When I see them I am reminded about how astounding San Carlos is, as a community, to have such a deep bench of people willing to sacrifice personal time to help the City of Good Living become even better than it is.

The group is also self-selected; the Council did not appoint people to the foundation. I made that point last night because I sense some folks think the opposite, that the foundation is a creature of the Council. We are certainly enabling its organization and launch with that potential $2,000,000 endowment. But it’s a home-grown effort, the same as all the other not-for-profit groups that exist in San Carlos (e.g., the San Carlos Education Foundation, Healthy Cities Tutoring, San Carlos Together, the Parks & Rec Foundation, the San Carlos Garden Club, etc.).

From what I’ve heard from the dais, both this Council and the previous one don’t want a foundation subservient to the Council. We will, I suspect, impose some constraints on how it uses the $2,000,000 grant. But, in general, the goal is to enable a group of committed residents to do what San Carlans do best: work together to improve our community.

As with any change, particularly one of this magnitude, there were concerns expressed about how the new kid on the block would fit in with the existing not-for-profit ecosystem. In particular, people speaking on behalf of the San Carlos Education Foundation and the San Carlos School District were concerned the new foundation would siphon off fundraising, making an already challenging public school financial situation more difficult.

Cameron Johnson, who chairs the group developing the new foundation, has said “If the San Carlos Community Foundation harms the San Carlos Education Foundation, we will have failed” (he said the same thing last night, several times, in different ways). The stated goal of the new foundation is to expand the pool of donors contributing to efforts aimed at improving life in San Carlos.

As a parent whose children attended our public schools, as a former school board member, as a long-term donor to the Education Foundation (not to mention someone who worked hard as a volunteer to help them expand significantly years ago), I wholly agree with Cameron.

Avoiding a negative impact, of course, is harder than stating it as a goal, and, ultimately, the proof is in the pudding; there isn’t any way that I know of to guarantee, ahead of time, that no “diversion” takes place. But having a clear, and sincere, goal of avoiding it is an excellent place to start. Building on that, through discussions with the various existing foundations serving San Carlos, seems like a good way for the new kid to fit in.

And it’s an area that clearly needs some work. The new foundation hasn’t spent a lot of time talking to the leadership of the existing foundations. I give the community foundation team credit for recognizing and owning that shortcoming, and committing to have those dialogs, pronto (they’ve already started).

Personally, I accept their explanation that the oversight was a result of all the work they had to do to come together as a team and to get things moving (launching a startup of any kind is neither easy nor a walk in the park, particularly when people have busy lives). And I applaud their commitment to work through the concerns of the other foundations to reach an acceptable modus vivendi.

As a side note, I think some of the concerns I heard expressed are the result of dealing with “the unknown”. Perfectly valid but probably overblown. Individuals and families don’t give to, say, the Education Foundation because they want to donate and it’s the only game in town (it’s not, but it’s the biggest player). They give to the Education Foundation because they want to help our public schools. That desire and focus doesn’t go away because a new foundation appears.

Granted, the situation for business donors is different. Some firms look upon philanthropic donations as a cost of doing business, and budget only a certain amount for each community in which they operate. That’s less true of local businesses, in my experience, where the approach is closer to the way individuals decide on their donations. Nevertheless, it’s an issue that should be addressed. I’m confidant there’s a way to do that (probably more than one), and it will be worked out.

I want to see the new foundation succeed. It’s stated goal of improving the quality of life in San Carlos is definitely something I support. But even more than that, I hope it will do for civic life what the San Carlos Education Foundation did for our public schools: significantly raise awareness of the opportunities and challenges facing the city.

When the San Carlos School Board was wrestling with its first “modern” financial crisis back in the early oughts polling data showed the overwhelming majority of San Carlos residents had no idea how financially strapped the District was (I know this because I served on the School Board at the time). They deeply supported their public schools, but were relatively clueless about its struggles. That’s not surprising; only about 25% of the households had a child in school at the time (and not all of those had children in the K-8 grades served by the District).

Far fewer households in San Carlos today are that ignorant; the vast majority understand the basic financial situation of the District. That’s due, in no small measure, to all the outreach and education done by the San Carlos Education Foundation. Their goal was not to educate the community per se. But in order to galvanize people to donate they had to explain why donations were important. That resulted in a community better educated on public school issues and more engaged with supporting its schools.

I believe the new community foundation, in the course of working to make life better in San Carlos, will do something similar on the civic side. Because we do have significant issues and challenges to deal with; we’ll get better outcomes, and a better future, from a more knowledgeable and engaged community.

I encourage everyone to watch the video of the presentation and the ensuing public comment and Council discussion. You can find it on the city website.

Overall, I was pleased with what I heard, with the public input that was offered, and with how the new foundation team reacted to it. It’s great to see community members committed to working together to improve San Carlos!

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Gun Store Regulation

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This is a letter I recently mailed to Governor Newsom, Senator Jerry Hill and Assemblymember Kevin Mullin.

Dear Governor Newsom, Senator Hill and Assemblymember Mullin:

I currently serve as the mayor of the San Carlos City Council. However, I am writing you today as an individual Council member, not on behalf of the Council. The opinions and perspectives expressed here are my own, and do not necessarily represent those of the City of San Carlos or its City Council.

I ask the State to take what steps are necessary to return regulation of the number of firearm stores allowed in a community to the residents of those communities, acting through their local governments.

After 18 months of effort, our Council revised the regulations governing where and how stores selling firearms may operate within San Carlos. This effort was sparked by a tremendous, spontaneous outpouring of community concern triggered by a proposed branch retail store of a major firearms retailer.

Those new regulations will impose significant limits on any new firearm stores seeking to locate within San Carlos. I strongly support the changes.

But they do not go far enough. And the reason they don’t is because court rulings related to San Francisco’s Measure H established that the State of California pre-empted local regulation over the number of firearm stores communities allow within their boundaries.

This is bizarre. We have the authority to limit the number of banks, nail salons and dollar stores. Such regulations have been on San Carlos’ books for years. Legal experts tell me we could, if we wished, similarly limit the number of grocery stores. Some communities go even further and ban all retail establishments, of any kind. Why should firearm stores be exempt?

I suspect the pre-emption stems from a desire to avoid legal challenges by those who fervently support the 2nd Amendment. That is a significant risk for a community contemplating regulating firearm stores. But each community ought to be allowed to judge that risk for itself and decide what it is willing to take on.

If we can regulate access to the food our residents need to survive – survival surely being an implicit Constitutional right – then we should be able to regulate the number of stores which sell tools that, whatever other desires they fulfill, have all too frequently been used to maim and murder our fellow residents.

Very Truly Yours,

Mark Olbert
Mayor, San Carlos City Council

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Development by Right, EIRs and Liberty

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This is a lightly-edited version of an op ed I wrote which was published in the San Mateo Daily Journal on Friday, April 12, 2019. You can find the Daily Journal item here.

I recently attended the San Carlos Planning Commission meeting where the Environmental Impact Report process for a 68 townhouse development on the old Black Mountain Water Company site was launched. After the EIR process is complete, the Commission will review the project proposal itself, and decide whether to approve it.

In listening to comments by residents I realized there are some misunderstandings about how the process works and, more importantly, why it works the way it does.

I think the biggest source of confusion stems from the belief that, in a democracy, the community ought to be able to decide whether it wants any given development project, and in what form. The reality is different, and for a very important reason: to preserve liberty.

Communities do get to set rules governing what can be built where within their boundaries. While those rules must abide by State and Federal laws, there is quite a bit of flexibility at the local level.

But once the rules are set, and until they are changed, they are binding upon the community. Project approvals are not transactional. Communities don’t get to decide, on a case by case basis, which projects they want.

Instead, if a proposed project complies with the rules, it can and must be approved, although conditions may be attached. It’s what’s called a “development by right”. Failure to do so exposes the community to being sued, a suit it would almost certainly lose, and then not only have to pay damages and court costs but end up with the project being built anyway.

This sounds, and is, rather undemocratic.

But that’s because our system of government is not a pure democracy. It is a representative constitutional democracy, and those other two words substantially modify how it operates. In this case the constitutional aspect protects members of the community from arbitrary acts by the majority, however well-intentioned. We can require you to prove you’re compliant with community rules – that’s what the project review process is for – but, once that’s established, you’re good to go.

That principle was adopted because it’s the best way found yet to preserve as much individual liberty as we can. But, like anything, it involves trade-offs that people may not like. One of those is that it’s extremely difficult for a “by right” project to be blocked by retroactively changing the rules.

There’s a similar situation involving EIRs. Most people see the EIR process as a way, potentially, to block a project that can be shown to have environmental impacts.

But while that can occur, the law is actually focused on identifying environmental impacts and getting them addressed. That’s why EIR studies almost always end up talking about mitigations: what can be done to reduce or eliminate negative environmental impacts?

Having negative impacts is almost inevitable, but it’s not, in and of itself, grounds for stopping a project. Instead, the project sponsor must address the significant (“material”) ones identified by an objective review of the project’s impacts. If they cannot find a cost-effective way to do so they may choose to abandon the project. But that’s relatively uncommon, particularly when dealing with something in short supply and great demand, like housing on the Peninsula.

None of this is intended to dissuade people from engaging city hall in discussions about specific projects. For one thing, that helps ensure a
proposal complies with our rules, and that’s important.

But my sense is at least some San Carlans want more than that. Focusing on what’s coming next, rather than what’s currently up for approval, might be a more effective approach.

For example, San Carlos will likely face, in the next few years, a significant amount of new commercial development. Deciding how we want
to govern that will make this a pivotal moment in our history. Getting, and staying, engaged in that discussion will better shape the future we pass on to those who come after us.

If you’re interested in more on this subject you might enjoy my recent State of the City address, available online at the San Carlos Chamber of Commerce website.

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