The FY2026-35 Capital Plan preserves San Francisco’s longstanding funding principles that prioritize how capital dollars are spent. The Plan also places constraints around the use of General Fund dollars, debt, and other revenue sources through clearly described and transparent policies that are adopted by the Capital Planning Committee. The policies govern the level and distribution of funds that feed into the Plan while the funding principles guide how the funds are prioritized.

Pay-Go Program Policies

The Capital Plan recommends a Pay-Go Program funding level based on the goal of restoring and eventually exceeding pre-pandemic levels of investment in capital. This Plan recommends a General Fund investment of $149 million in FY2026 growing by $30 million per year until FY2028, and $25 million per year thereafter. This program is the City’s primary source for basic public facilities and right-of-way repairs, an essential function of government that the City is required to deliver.

The Pay-Go Program policies recommended by the Plan are:

The General Fund funding level will be $149 million in FY2026 growing by $30 million per year until FY2028, and $25 million per year thereafter.

The Street Resurfacing Program will be funded at the level needed to achieve and maintain a “Good” Pavement Condition Index (PCI) score of 75.

ADA barrier access removal projects and the ongoing curb ramps right-of-way program will continue to be a program priority.

Funding for critical enhancements will be restored by setting aside $10 million per year.

Several voter-determined outcomes have affected the Pay-Go Program. Approved set-asides for the Recreation and Parks Department and street tree maintenance without associated revenue sources have resulted in restrictions on General Fund spending. Voters also renewed the Library’s set-aside in 2022. These measures limit the flexibility of the Pay-Go Program.

For more information on the Pay-Go Program, please see the Capital Sources Chapter.

Table 2.2

Pay-Go Program Funding (Dollars in Millions)	FY26-30	FY31-35	Plan Total
Routine Maintenance	109	140	249
ADA: Facilities	9	9	18
ADA: Public Right-of-Way	55	71	125
Street Resurfacing	207	290	497
Enhancements	50	50	100
Recreation and Parks Base Commitment	71	71	142
Capital Contribution to Street Tree Set-aside	37	48	85
ROW Infrastructure Renewal	52	107	158
Facility Renewal	439	885	1,325
Total Projected Funding	1,030	1,670	2,700

 

Debt Program Policies

The policy constraint for the General Obligation (G.O.) Bond Program is:

• G.O. bonds under the control of the City will not increase long-term property tax rates above FY2006 levels. In other words, G.O. bonds under control of the City and County of San Francisco will only be used as existing bonds are retired and/or the city's assessed value grows.

Consistent with the 2026 update of the Five-Year Financial Plan, the G.O. Bond Program assumes growth in Net Assessed Value of 0.52% in FY2027, 2.63% in FY2028, 3.28% in FY30, and 3% annually thereafter.

The policy constraint for the Certificates of Participation (General Fund Debt) Program is:

• The amount spent on debt service in the General Fund Debt Program will not exceed 3.25% of General Fund discretionary revenues.

Consistent with the Five-Year Financial Plan, the Plan assumes that General Fund discretionary revenues grow 1.84% in FY2026, 5.65% in FY2027, 1.03% in FY2028, 3.91% in FY2029, 2.54% in FY30, and 2.70% annually thereafter.

For more information on City’s Debt Programs, please see the Capital Sources Chapter.

Special Financing District Policies

Following the Capital Planning Committee’s recommendations, the Board of Supervisors first adopted guidelines for the establishment and use of Infrastructure Financing Districts (IFDs) in San Francisco in 2011. As the types of IFDs expanded over the past several years to include infrastructure revitalization and financing districts (IRFDs) and enhanced infrastructure financing districts (EIFDs), the Capital Planning Committee and Board of Supervisors approved updated guidelines that were consistent with the FY2024-33 Capital Plan. These guidelines apply to any IFDs established by the former Redevelopment Agency. The policies regarding the 50/50 share and the 5% General Fund cap do not apply to IFDs at the Port. A copy of the guidelines can be found in Appendix D. The uses of IFDs are also discussed in the Capital Sources Chapter.

General Policies

The Capital Plan uses the Annual Infrastructure Construction Cost Inflation Estimate (AICCIE) developed by the Office of Resilience and Capital Planning and approved by the Capital Planning Committee for the first year of the Capital Plan. For this Plan, that figure is 3.5%. Thereafter, the Plan assumes an annual escalation rate of 5.0% unless otherwise noted.

The City uses a revolving Capital Planning Fund primarily to support pre-development of projects for inclusion in bonds with the expectation that these funds will be reimbursed at bond issuance.

Departments with major building projects within the Plan's time horizon are expected to develop estimates for the impact on the City’s operating budget as part of project development. Those impacts appear in the Plan to the extent they are known at publication and are further discussed as a standard component of requests made to the Capital Planning Committee. Operating impacts are also considered during the City’s annual budget development process. The financial impact of operations is not recorded in the Plan but is addressed for major projects in the City’s Five-Year Financial Plan.