Thank you to the committees clerk. I would also like to thank San Francisco government tv staff for staffing. Mr. Clerk, do you have any announcements . Thank you. Please ensure you have silenced yourself owns an electronic devices. Your completed speaker cards a copy of documents should be cemented to the clerk. Items acted upon today will appear on the september 19th, 2019, board of supervisors agenda unless otherwise stated. Thank you. Since item number one was sponsored by supervisor brown, along with supervisor safai, we will skip that one until she gets here. Lets move to item number two. Item number two is an ordinance amending the campaigning government conduct code to increase the matching ratio for Campaign Contributions raised by candidates participating in the Financing Program and the amount of public Funds Available for those candidates. Thank you. Welcome, supervisor brown. We skipped to item number two. I just wanted to make some opening remarks. I am incredibly excited to bring this ordinance before this committee today. In 2019, with our democratic norms and values under assault every day, it has never been more important for us to advance invest in strengthening our democracy. The path to a more just future is stronger democracy and a fair and more just elections. When the voters of San Francisco crated our public Financing Program in 2,000, it was cutting edge and it established San Francisco as a leader in publicly financing elections. Since then, outside spending outside campaigns has skyrocketed and we have fallen behind our peers and keeping up with the times. The ordinance before us, based on a simple idea, public official should be accountable to the public, in this accountability must start and how we are elected. Public financing of elections allows candidates to compete in campaigns increasingly flooded with private funds from super pacs. It apple flies the voices of our constituents and provides greater regulation and accountability for those who seek office. This is not a controversial idea it was the people of San Francisco who establish this program. The National Democratic party has recognized recognize the urgency in furthering them when nancy pelosi retook the gavel this year, the first piece of legislation passed by the new democratic majority was h. R. One , that we the people act. With sweeping electoral reform, including establishing Public Financing for congressional races at a 61 matching ratio, h. R. One mirrored every part of this ordinance. While these reforms are blocked on the federal level, we cannot wait for washington to start to the essential work of strengthening our democracy. It falls upon cities to lead and we can do this here and now. This ordinance represents the single greatest expression of our public Financing Program since its inception two decades ago. Modernizing and bringing the program further in its goals. It does this in a few ways, most importantly, it increases the amount of publicly public Funds Available to qualified candidates. It increases the ratio from 21 to 61, while limiting the matchable portion of a contribution to 150. This will significantly amplify the overall impact of the program while specifically amplifying the impacts of grassroots, small valard donations from individuals. Because the value of your voice in our democracy should not depend on the value of your bank account. It also increases the end of this ordinance began with Community Meetings hosted at the commission over a year ago. It went through a robust inquest process from community stakeholders, Campaign Finance reform, advocate advocates and our office. Multiple draft recommendations from the Ethics Commission staff and amendments at the Ethics Commission where the final version before us ultimately received unanimous support. We partnered with the b. L. A. For substantive policy analysis of these reforms, which is before you today. Also on record for this file are letters of support from the aclu and the Campaign Legal centre. Without further ado, i would like to welcome leanne, executive director of the Ethics Commission. Good morning. Thank you, and good morning members. I appreciate your opening comments and the Ethics Commission is really delighted to be able to be here and have the opportunity to encourage this paddle and the full board to support this ordinance. As you indicated in your opening comments, this is a process where the Ethics Commission, for the past year, is really tried to focus on how we can strengthen the public Financing Program and it has been a process with lots of stakeholder involvement. We know there is a balancing of interests and needs in any legislative package that we bring forward and we feel that this one really does move the dial forward in terms of encouraging, not just participating by candidates in communitybased individuals, to run for office, who dont have to rely as heavily on larger donors, would also really encouraging citizens to get more involved. We are increasing the value of their contribution to political campaign. As you indicated, cities have been leading this effort around the country for years. San francisco is taking that path and we are very excited to be part of this discussion of encouraging the changes that you highlighted. As you know, this is a system that is voluntary so candidates have to participate in it and opt into it. Our focus is a commission has been to look at how we can make the program attractive to candidates within existing funding levels and also encourage greater participation among the voters that candidates are seeking to be elected to represent. Over the years, the historical figure shows that the program has been opted into by roughly half or less of candidates on the ballot. So for us, that was a motivating factor to look to see how we could increase that so the candidates of real resources to run and recognize a availability his of campaigns in 2019 and update and modernize the program so it is relevant and is an incentive to candidates to want to participate. We know when they participate, the public does benefit. This is the third phase of the changes we have brought to the board of supervisors. We started with an initial change in a phase i ordinance that was a technical cleanup that the board and the mayor adopted. We had the regulatory changes that also address provisions in the public Financing Program administration. Those are now in law as of effect of july 30th. This is only the third piece and one that is the most substantive that we are very excited about. I just wanted to thank you for your leadership and support in moving forward and the focus of this committee and the time you spending to bring the Program Forward that is beneficial for san franciscans and all people who participate. Im happy to answer any questions. I want to thank you for that time. Thank you so much. Thank you for your work on this in the ongoing work that you and your staff do administering the public Financing Program and our other ethics programs in San Francisco. Now we would like to welcome fred from the budget and legislative Analyst Office to present his detailed report and overview on this item. Good morning, supervisors. Im from the budget and legislative analysts office. I am going to start this. We have issued sorry. Is there a way to get this on the slideshow . Okay, i see. We issued a report to you yesterday on the proposed legislation, the Public Campaign financing and i will do a quick summary of that report this morning. First of all, a quick background , most of you probably know the program started in 2,000 with the passage of proposition oh. It is a matching program where private funds are matched with public funds and as was mentioned, it is a volunteer program. Initially it covered the board of supervisors and in 2006, the Mayors Office was added to the program. The funding structure has changed over the years. At one time there was a 41 match, but now it is between one and 21. Public funds disbursed over the years since it has been in place ranging from 281. 9 24. 7 million in 2011. With a range of all candidates spending covered by the program. That is an average of 29 . Participation has ranged from nine to 23 candidates per election, which equates to 12 to 67 of all candidates on the ballot, averaging around 40 1 . The programs are in place in other cities. They have Public Finance camping programs, as well. Those with a 61 matched rates include new york, los angeles, berkeley, portland. Denver and baltimore are now adding 91 matched rates to their programs. Current structure for board of supervisors elections as presented in this table, and as you can see, there are three tiers in the Current Program, and different matching rates going with each tear. The first is the qualifying requirement where candidates need to raise a certain amount of money based on a certain number of donors, and it is 10,004 nonincumbent and 15,004 incumbent, and that qualifies them for the program. They get matching public funds for nonincumbent his and 314 incumbent his. And then there are two more tiers of fundraising with matching contributions, meaning the amount of the contribution that will qualify for public funds, and it is set at 500 right now. The match rate for the second tier is 21, so when 50,000 in private funds are raised, the candidate gets 100,000, and then there is a third tier, so they matching contribution amount of 500. The rate drops down to 11. You can see at the bottom of the the total amount that can be raised is the individual expenditure ceiling with a maximum that the candidates can spend on their campaigns that is 250,000 in on the table shows the makes of public and private monies that add up to that amount. Candidates may not raise all that if they dont get if they dont raise all the private funds required, but they would get a portion of the match up to what they have raised prior. This table shows the current structure for mayor Mayoral Elections. Same idea, with the dollar amounts are greater and you can see the match rates and the matching contributions in the same columns, and the difference between incumbent and nonincumbent. In both cases, nonincumbent get slightly more money for their private fundraising then incumbents. And right now, that would add up to 1,475,000, maximum individual expenditure ceiling. If the candidates raise all the required private money and get through the associated public funds. The individual expenditure ceiling can be increased by the Ethics Commission, but that requires that their opponents have raised more money and are using some funds were oppositional spending or that they have more quarter funding that exceeds the individual expenditure ceiling. The proposed changes in the legislation have a number of policy objectives and these are captured on this table. For the legislative change, we do see the maximum private contribution amount that qualifies for public matching funds and increasing the match rate from right now that ranges from 11 to 21 and would be increased to 61 for nonincumbent his incumbents. The associated objectives are to enhance the impact of smaller sized donations and encourage candidates regardless of whether their supporters and donors are able to contribute large sums or not. Another area of change is increasing the initial total spending limits or the individual expenditure ceiling for publicly financed campaigns and providing a greater amount of public funds for candidates, and the objectives here at apple for Resources Available to participate with candidates for more effective and sufficiently resourced campaigns, and to provide participating candidates with more available resources and make their Time Available for communicating their policies and reducing their time fundraising. Another area that is proposed for change is the area Public Financing reduction in funds that candidates must privately raise qualify for the remaining public funds, and reducing the number of tears a private fundraising requires to access public funds as i showed on the previous slide. With the proposed changes there be two. The objective is to reduce the importance of raising large sums of money to access the public funds. On this chart we show the changes for the board of supervisors elections and candidates, and you can see this highlights where they are separated by incumbent and nonincumbent. The ceiling goes up by 100,000. I think that is important to note that they would still be a 10,000 minimum for candidates to get for nonincumbent candidates to be able to programs and 15,000 for incumbents. That is a qualifying amount right now. That does not change. But once in, what does change is the maximum public dollars available for candidates shown on the next row which increases by approximately 100,000 for both nonincumbent and incumbent the amount to be privately raise to release those funds decreases , thats because of the increased match rate. It goes from 95,000 in private funds and nonincumbent his that have to raise to 42,500, a reduction of 52,500 per candidate. For incumbents, the changes from 97,500 and now 47,000. For tier two, the matching contribution amount, this is the amount of the contribution that the donor can give up to 500 illegally to a candidate, but right now, all 500 of that counts towards matching funds. The larger the donation, the faster candidates get the public funds. Under the proposed changes, the matching contribution would reduce to 150. It would not take as large of a contribution but the candidate would get access to the public funds with a smaller amount at a higher match rate. And then finally, the total amount to be privately raise to allow the candidate to spend the individual expenditure ceiling maximum stays the same. It is currently 95,000, and that would remain 95,000, but they would have received all the public funds for less than that, it is just that they can continue private fundraising after theyve acquired or been granted the public funds. The next slide, i wont go through the same detail, but this shows the arrangements currently, and as proposed for mayoral candidates and it follows the same pattern of increase individual expenditure ceilings, a maximum public dollar available for candidates increased, a smaller amount that needs to be privately raised to access the public fund, and a lower matching contribution so smaller donations results in higher amounts of public Funds Available. One of the impacts of the proposed changes that ive shown on this slide and this chart, and i think its important to note, that there are two variables that will have impact here. One is the increase in the match rate and that seems obvious if you get 6 for every one privately raised dollar, that is better now better than what it is now. It is also significant in the reduction in the matching contribution. You can see on the left two bars it shows there is a five time differential right now if you didnt change the matching contribution. Theres a 500dollar donation candidates would have 30,500 at their disposal, mostly because of the increased public funds. Five times more than a donation of 100 to provide to candidates with the proposed changes, the 6 1 match rate increases the amount of public funds that would be provided, with a differential between a 100dollar donation and a 500dollar donation is reduced. So theres only 1. 5 differential this captures the important policy objectives for the proposed legislation. The next page, a different way of looking at this, but quickly showing what the Current Program with the Current Program, a 150dollar donation. The match right would provide three underdogs the public funds to the candidate with the proposed changes, is 900. Right now, 500dollar donations with a 61 match rate that would provide a 21 match rate would provide 1,000, but with the proposed changes, the 61 match rate, but only 150dollar matching contribution. That donation would result in 900 in public funds. You can see it is the same as a 150dollar donation and dilutes the impact of large donations in terms of access to the public funds. We did look at the Election Campaign funds because this will result in higher rates of spending of public funding if the proposed changes are adopted what we have seen is that the Election Campaign fund generally is very wellfunded. It started in 2018 was 7 million, it is wellfunded in part because of the level of participation in the program. So there are funds that are allocated every year by the board of supervisors through the budget process, but if they dont all get spent, then this is the nonelection mirror and they will move over to next year the result has been a fund that funds that has been able to cover all public funding for the campaign since the program has been in effect, except for one year, the very first year. So this shows, except for example, expenditures in 2018. And this was the year that we had the board of supervisors and Mayoral Elections, and even with all of that spending, it was about 4. 2 million. The fund had 7 million at the beginning of the year. It was more than sufficient to cover. It was 14 candidates that participated. Under the proposed changes, and assuming all the same candidates will participate in the program, but now have the higher rates of public funding granted to them, that would require six my 4 million, assuming they all got 6. 4 million. So with the 7 milliondollar balance in th