9-May-2012 (Wed)
Wherein we're gonna get Pucced.

Lemme tell you about a construction-related joy called the PUC, the San Francisco Public Utilities Commission.

Let's say you're expanding your business, and putting in a bathroom, a bar, a kitchen, whatever. Part of this interminable process is that at some point, your plans land on the desk of someone at the PUC, and they take the list of all the gear you're installing -- every toilet, every sink, every floor drain, every refrigerator -- plug those into some mysterious equation, and then they say, "Now you owe us $40,000 please. Or you can't have your construction permit."

The purported reason for this is that your business is placing "additional load" on the water and electrical systems, and so they get to bill you for it.

But, it's funny, because I get a bill every month for the water and electricity that I use that charges me for exactly the additional load that I have placed.

So this is actually a "paying the taxman" tax. You have to pay this bill for the privilege of paying future bills.

Having heard me rail against the anti-business stupidity of our local governmental bureaucracy, you might get the impression that I'm against taxes, or government in general, but that's far from the case. I'm not some Libertarian who thinks that roads are things that just magically happen during the night. What I'm against is stupidity, which we have in abundance. We have a system that is overwhelmingly optimized for the wrong things.

Taxes don't exist just for revenue generation for some nebulous, parasitic entity called "The Government". They exist so that people pay their share of the commons from which we all benefit, directly or indirectly; and also, they are a form of social engineering. You raise taxes on things you want to discourage, and lower them on things you want to encourage.

So what's this discouraging? What's the market pressure they're trying to exert here? Is it conservation? "We'd like you to use less water, so we'll discourage you from installing sinks." Well, no, for two reasons. First, if you want people to use less water, you raise their monthly water bill (or you make the bill progressive, so that the rate is higher when water consumption passes what you consider a "reasonable" level). Who cares whether they have a sink if it's never turned on. But second, it's not like I have any choice about these sinks! I can't say, "Hey, you know what, let's do our part for Mother Earth and just put in one sink instead of two." All of this is mandated by the Health Department: a bar has to have a 3-pot sink, a hand-washing sink, an ice well, a floor drain, etc. If your capacity is X, you must have Y toilets. There's basically zero discretion here.

So what they're actually discouraging by charging an enormous fee for merely owning a sink is not "wasting water", but is instead, "doing business in San Francisco". They're saying, "We'd rather you not expand your business. We'd rather you not increase the number of people you employ, or the number of visitors you bring to town. We think those things are bad, so we'd like to make it less likely for you to be able to afford to stay open."

It's the "We will have to confiscate your ice cream cones" thing all over again.

14 Responses:

  1. Alex Gourley says:

    That sounds.. super frustrating.

  2. Jonathan Lennox says:

    I'd phrase what they're trying to discourage as "competing with existing businesses in San Francisco."

    This perhaps makes the motivation clearer.

    • DoctorMemory says:

      No, I think he's actually got it pretty right. There is a large constituency in this city that quite honestly thinks that San Francisco's (and it's surrounding cities') evolution from a sleepy naval base town into a high-tech center has been a complete disaster, and that the city would only be improved if everyone who has attempted to move here or start a business here or build a house here since roughly 1980 would just give up and go away.

      And they vote.

      Can't blame the city government for being responsive to the desires of their constituents.

      (What sort of jobs they think we'll all have in this utopian hipster/programmer-free SF given that the navy is unlikely to reclaim the Presidio and Treasure Island is unclear: I guess we'll all be making art in the ruins?)

  3. Craig Maloney says:

    Would they have a serious shit-fit if you put in pay-toilets and pay sinks? :)

  4. Erbo says:

    You know, over these past however-many years, you've shown the patience of Job in suffering the slings and arrows of outrageous San Francisco bureaucracy, for the sake of keeping live music and entertainment going in the city. I've gotta think, though, that at some point, you're just going to say, "To hell with this. Obviously, the city of San Francisco values their uptight, politically-correct, Kafkaesque government system more than they value having actual culture and nightlife. Fuck them. I'm done. I'm taking (what's left of) my marbles and going home." Not that I hope that this happens anytime soon...but should someone be starting a betting pool as to when? (Nah, SF would probably tax that too. :-) )

  5. Jeremy Wilson says:

    The amazing thing is that any business gets done at all in SF based on these rules. Imagine how awesome a place it would be without the insanity!

    • gryazi says:

      Having been loosely involved in pushing paper for NYC businesses, this does start to make NYC seem downright reasonable.

      So [rather than dig up their web page], what's the stated mission of the PUC workforce other than collecting PUC fees? I'm aware that the costs of obtaining rights-of-way for 'private' utilities to.. y'know, keep the lights on.. can be staggering in certain developed areas - so is the mandatory contribution keeping civilization from collapsing worse?

  6. Tom Lord says:

    Are these "utility hookup fees"?

    It seems legit to say that there are extra one-time costs associated with hook-ups that further strain capacity. Some municipal infrastructure stuff will wear out faster than planned. For really large developments, new infrastructure may be needed up-front.

    I guess you are saying (in small part) that you'd rather see those one-time hook-up-related costs distributed to all rate payers rather than charge them to new developments? 'Cause when you write "But, it's funny, because I get a bill every month for the water and electricity that I use that charges me for exactly the additional load that I have placed," that just seems.....

    If anyone can place new hook-ups with no hook-up fee, then your usage rates would have to go up in response to other people's development (or would have to be higher than "actual costs" to begin with).

    $40K or whatever it is may be way to high. The money, as you say, may go to the wrong fund rather than legitimately covering one-time expenses related to increased load. The bureaucratic process may be needlessly cumbersome. I believe you on all those things. I'm not defending your $40K bill.

    But that one specific part of the argument that says new hook-ups ought to be covered by usage fees doesn't make sense to me.

    • jwz says:

      These are not hook-up fees (for any reasonable definition of "hook-up fees"). You get charged this shit if you add a second refrigerator to an existing kitchen on the same circuit, or add a second sink to the same source and drain in the same room. Assuming you did your remodeling in a fully legal, permitted manner, which of course you would.

      • Tom Lord says:

        Thanks. Learning is fun.

        So, since they aren't usage fees:

        I presume you probably don't really want to take this on but.....

        CA law (constitution and legislation) requires that fees like this must be for actual costs of providing specific benefits to your property. In theory, you should be able to demand a breakdown of how that $40K is spent to specifically benefit you and your property.

        So like an actual hook-up fee: fine (provided its a reasonable estimate of actual expenses). What it sounds like you are talking about: theoretically against state law.

        I learned that investigating the possibilities for implementing retail space vacancy taxes here in Berkeley. As a tiny town, commercial real estate has a less than huge number of owners. In some retail districts they seem to keep rents very high, even when the result is years and years worth of lots of vacancies.

        So the question we faced is -- and this relates to your observations about fees discouraging new business in The City -- can Berkeley impose a tax or a fee of some kind on vacant retail spaces? Essentially, it would be intended as a punitive measure to encourage the lowering of retail rents. Makes a little sense? Arguably, anyway?

        Can't be done, at least not in CA. The punitive fee would deliver no specific benefit to the owner so it would violate CA law -- and arguably the federal constitution (on uncompensated taking). Which sucks.

        Some jurisdictions have the crude approximation of a "blight tax" or "blight fee" but these do no good if the property is maintained: vacancy is not in and of itself "blight". Vacancy is by right. A cleanly vacant property can't be penalized.

        The same problem that prevents Berkeley from having a retail vacancy tax with any teeth could be a partial solution to excessive fees in San Francisco -- although I don't anyone who'd have obvious incentive to take on that legal fight. In theory though....

  7. Anont Race says:

    I thought "social engineering" was that form of non-technical hacking as in Mitnick's book ;)

  8. Jered Floyd says:

    OK; I've just got to jump in here. I feel for you and your fighting with bureaucracy, but every time a permit or license issue comes up I feel like you play the "I'm soooooo confused!" card, and that's not being fair.

    You know exactly why all these idiotic rules exist. There are exactly two reasons:

    1) To generate revenue to allow to scope of local government to continue to expand.

    2) To do this in a way that doesn't impact people who pay to get the politicians re-elected.

    Instead of just complaning about it, do something about it. Larry Lessig's "Republic, Lost" goes through the details of the problem and what can be done in excruciating detail.

    Almost everything you have complained about boils down to a systematic dependency on money, a corruption that afflicts every level of our government today. If you want to do something, you have two choices:

    1) Form a local PAC, a "Friends of San Francisco Culture" or something, and get you and your business-owning colleagues to donate several million dollars to the campaigns of local politicians who will decimate the licensing and permitting departments, or

    2) Advocate for local political reform, getting money out of politics.

    • Jamie Zawinski says:

      I don't see how what I wrote sounded even remotely like "I am so confused." I'm not confused. I'm pretty sure what I wrote was, "This is some bullshit."
      But hey, thanks for giving me the traditional Open Source response of "well if you don't like it, fix it yourself." That's just swell. That knee-jerkery is always so pleasant and helpful in every context.
      If your assumption is that I *don't* also sink money into lobbyists and advocacy organizations, well, you're wrong. Hint: it's not as easy or effective as you think.

      • Matty J. says:

        I wonder if the elections commission would allow 'jwz' on the ballot for mayor, or if they'd make you spell out your whole name.

        I'd totally vote for either one.