Almanac

Cover Story - June 4, 2008

When public meets private

The rewards and the risks of public-private partnerships

by The Almanac staff.

What would the towns in The Almanac's circulation area Atherton, Menlo Park, Portola Valley and Woodside be like if it weren't for private gifts to public agencies from local town governments to school districts?

Private gifts to public schools, mostly through school foundations, range from around 8 percent of the budgets in the Portola Valley, Las Lomitas and Menlo Park elementary school districts to 25 percent in the Woodside Elementary School District.

In Portola Valley, a new $20 million Town Center complex is being built with $17 million in private donations. Atherton officials have indicated they may follow this model of privately funding the building of a new Town Center. The Atherton council voted May 21 to form a task force to explore whether there is public support for such an effort.

In Woodside, resident Noel Perry donated approximately six acres off Farm Hill Boulevard across from Canada College for the town's first park and athletic field. The land was assessed at $6.9 million when the gift was made in 2005. The Barkley Fields and Park project is a public-private collaboration in another way: About $2.3 million in private funds were raised to help pay for around $4 million in work on the field.

In Menlo Park, an anonymous private donor recently offered $8 million or more to fund the building of a new gymnasium in the Civic Center.

There are many large donations. Among the 500 people who donated a total of $17 million to build a new Portola Valley Town Center complex, six donors gave $1 million or more, and 72 gave between $10,000 and $999,000.

With the Portola Valley school district facing revenue shortfalls, in part due to a 60 percent reduction in the assessed value of the Larry Ellison estate, an anonymous donor (not Mr. Ellison) stepped forward and gave the district $200,000 to help implement its technology plan.

Many people in all four towns also give the gift of labor, volunteering on boards and commissions, in the classroom, and to organize fundraising events.

Of course, there are alternatives to private donations. Bond issues and tax measures can be passed, and regularly have been in local towns and school districts.

School parcel taxes, which require approval by two-thirds of the voters to pass, range from $233 a year per parcel in the Woodside district to $561 in the Menlo Park district.

Voters also have backed many school bond proposals, notably the $91 million bond measure approved by 70 percent of voters in the Menlo Park district in 2006. The funds are being spent to improve and expand facilities on all four the district's campuses.

Municipal governments have won voter approval for tax measures, including a new Menlo Park utility users tax in 2006. Portola Valley voters approved renewal of its utility taxes in 2005, and Atherton voters have long supported a parcel tax to help finance town operations.

Tax and bond measures have the advantage of engaging large numbers of people in the decision-making process. The measures require that public officials convince a majority, and often a super-majority, of voters to approve the proposal.

These "advantages" can be seen as disadvantages hurdles that public officials don't have to scale if they can raise private donations.

"It is very difficult to get 67 percent of a vote for pretty much anything," said Portola Valley Councilman Ted Discoll last year when asked why the council did not seek voter approval of a bond measure to finance the building of a new Town Center. "If someone felt strongly that we should not do this project, they should have run" for election to the council, he said.

Restrictions on public funding, including Proposition 13, adopted by California voters in 1978, led to major local efforts to raise private funds for schools, including through nonprofit foundations. These fundraising efforts also involve large numbers of people, particularly parents, in the public process, and in a more direct way than in elections, supporters point out.

But private gifts, particularly large ones, can come at a cost, or at least a risk. Large donors may have an influence, directly or indirectly, and perhaps unseen, on public policy. In addition, there may be the perception founded or unfounded among some members of the community that large donors receive favored treatment, leading to a feeling among less-wealthy members of the community that they are somehow second-class citizens.

In this and future stories, The Almanac will examine the rewards and risks of public-private partnerships. We will look at mechanisms set up to avoid undue influence on public policy by private donors. And we will ask members of the public, in addition to public officials, how comfortable they are with the role of private wealth in the local public process.

LET'S HEAR FROM YOU

We welcome your observations and comments about the rewards and risks of private gifts to public agencies. Post your comments online at AlmanacNews.com (check the links under the heading, TownSquare), by e-mail (editor@AlmanacNews.com), by fax (650-854-0677) or by mail: Editor, The Almanac, 3525 Alameda de las Pulgas, Menlo Park, CA 94025. Please specify if the comments are for publication. If so, we need your name and the name of your street and town, plus a phone number. The phone number is not for publication but gives us a way to contact you. If you wish to remain anonymous, but would like to talk with a reporter, please provide a way to contact you.

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