D. Methodology and Assumptions

Capital Plan Methodology

Under direction of the City Administrator, department staff annually assesses facility conditions, determines cost projections for renewal projects and proposed enhancements, and analyzes available funding resources to prepare a 10-year capital plan.

Through a series of meetings the Capital Planning Committee reviews proposals, staff recommendations, and documents toward the development of the Capital Plan. These reviews do not, and are not meant to, replace the authority of department commissions’ or other oversight bodies under the City Charter and other codes. Rather, the 10-year plan is meant to provide a forum that examines capital needs from a citywide perspective and to foster a dialogue on those needs between stakeholders, commissions, the Mayor, and the Board of Supervisors.

Staff uses two approaches to collect data for the Plan. The Facilities Renewal Resource Model (FRRM) is used to collect information on the state of repair for major facility and infrastructure subsystems (also known as renewals) for all of the General Fund departments. The Airport, Port, and MTA have implemented this model for their facilities as well. In addition, General Fund departments submit enhancement requests using the Capital Planning and Reporting system (CPRS). Each proposal is reviewed by professional staff (e.g., architects, engineers, analysts etc.) and categorized as a funded, deferred, or emerging need.

Facilities Renewal Resource Model (FRRM)

The City uses the facility life-cycle model to predict annual funding requirements for General Fund department facilities. The objectives of the facility modeling effort are listed below:

Develop a budget model to predict relative annual funding requirements for facilities renewal and document the existing backlog of deferred maintenance in a consistent way for all departments.

Provide a basis for a funding plan that will first address adequate resources for renewal and then a reduction of the deferred maintenance backlog.

Create consistent and comparative data among departments for determining funding allocations and targets for addressing renewal as a part of operating or capital budgets.

Deliver a cost model to each department with associated staff training so that facilities renewal and deferred maintenance needs can be updated annually and progress in meeting those needs can be measured.

Provide a planning tool for departmental use which provides a useful life “systems” profile of each building as a way of predicting future funding needs or packaging projects to leverage fund sources.

Develop a credible model to assess needs consistently and to focus on total funding needs and strategies.

The model uses building information (gross square feet, construction date, facility subsystem type, etc.) and an approach based on subsystem life cycles and replacement costs to estimate the backlog of deferred maintenance and future capital reinvestment needs. Shown here is an example of the 10-year renewal forecast report generated by FRRM for a particular facility. This report, one of dozens available, shows subsystems within the building that need to be replaced during the next 10 years and the corresponding cost (in thousands). A variety of other reports are available for further analysis.

Each department maintains the model, with the capability of summarizing information at both the department and citywide level. The model has a great deal of built-in flexibility that allows the City to enter new data and even change the underlying assumptions in future years.

The FY 2022-31 Capital Plan reflects renewal data collected from August through December 2020 and includes detailed information for each General Fund department. These findings are summarized in the renewal graphs and the renewal line of the financial summary schedules for each of the General Fund service areas found throughout the Plan.

Capital Plan Assumptions

The FY2022-31 Capital Plan uses the Annual Infrastructure Construction Cost Inflation Estimate (AICCIE) of 3.5% as the escalation rate for the first 2 years, followed by 5% for the remainder of the Plan.

Fiscal years (FY) in the Plan refer to the calendar year in which the City’s July 1 to June 30 budget cycle ends. For example, FY2022 refers to calendar year dates from July 1, 2021 to June 30, 2022.  Dollars are listed in thousands for all financial schedules unless otherwise noted.

For all planned General Obligation Bonds, the financial schedules show the total bond amount in the fiscal year during which the bond is to be approved by voters. For example, a G.O. Bond proposal on the November 2023 ballot will appear in FY2024 of the financial schedule.

The General Obligation Bond Program assumes a reduction in Net Assessed Value of 4.83% in FY2022, and growth of 5.89% in FY2023, 5.92% in FY2024, 4.64% in FY2025, 3.99% in FY2026, 3.37% in FY2027 and FY2028, and 3.38% annually thereafter.

When issued, G.O. Bonds proposed by this Plan will not increase voters’ long-term property tax rates above FY2006 levels. In other words, new G.O. Bonds will only be used as funding source when existing approved and issued debt is retired and/or the property tax base grows.

The General Fund Debt Program assumes that General Fund discretionary revenues grow 16.75% in FY2022, 8.39% in FY2023, 5.48% in FY2024, 3.99% in FY2025, 3.94% in FY2026, and 2.70% annually thereafter. In addition, the General Fund Debt Program assumes that the amount of General Fund revenues spent on debt service will not
exceed 3.25%.

Jobs Creation Estimation Methodology

In an effort to better evaluate and prioritize capital projects, local governments are examining not only upfront financial costs but also their contributions of direct and indirect jobs generated by the capital investment. The City and County of San Francisco’s FY 2022-31 Capital Plan estimates nearly $38 billion in capital projects during the next ten years, which will create nearly 170,000 San Francisco jobs. A job is defined as one job year of full-time work. For example, five people employed for four years equals 20 job years. This jobs estimate is based on the REMI Policy Insight model which attributes 4.48 San Francisco jobs per million dollars in construction spending. This is exclusive of the additional jobs created outside of the City and County as workers
and materials migrate in from surrounding areas.

Customized for San Francisco, REMI has the unique ability to determine the effects of taxes and other variables on the local economy. As a result, the Controller’s Office of Economic Analysis uses this model for analyzing the economic impact of pending legislation. The table below summarizes the number of job years from the REMI model based on $1 million of construction spending in San Francisco.

Estimated Jobs Created from Construction Spending in San Francisco

Source: Economic Multipliers from Office of Economic Analysis, Controller's Office, REMI Model Outputs

Infrastructure Finance Districts Criteria

The following threshold and strategic criteria to guide the use of future Infrastructure Finance Districts (IFDs) in San Francisco were adopted by the Board of Supervisors (BOS) on February 18, 2011. These criteria are in addition to those in IFD law (CA Government Code section 53395 et. seq.)

The Guidelines are organized into two sets of criteria: (1) minimum “Threshold Criteria” that must be satisfied for an IFD to be formed by the BOS and (2) “Strategic Criteria” that may be considered when deciding whether to form a future IFD. These policy guidelines would not apply to any existing Redevelopment Area (IFD law prohibits it) or to any property owned or managed by the Port of San Francisco.

Threshold Criteria:

Limit to areas that are rezoned as part of an Area Plan or Development Agreement approved by the Board of Supervisors (BOS) and also adopted as a Planned Priority Development Area (PDA) by the Association of Bay Area Governments (ABAG). Priority Development Areas (PDAs) are locally-identified, infill development opportunity areas within existing communities. They are generally areas of at least 100 acres where there is local commitment to developing more housing along with amenities and services to meet the day-to-day needs of residents in a pedestrian-friendly environment served by transit. To be eligible to become a PDA, an area has to be within an existing community, near existing or planned fixed transit or served by comparable bus service, and planned for more housing. Designation of PDAs expresses the region’s growth priorities and informs regional agencies, like the Metropolitan Transportation Commission (MTC), which jurisdictions want and need assistance. Planned PDAs are eligible for capital infrastructure funds, planning grants, and technical assistance. Linking creation of future IFDs to areas designated as PDAs will allow the City to leverage the increment generated by an IFD to increase its chances to receive matching regional, state, or
federal infrastructure and transportation grants.

Limit to areas where a rezoning results in a net fiscal benefit to the General Fund as determined by the Controller’s Office. Specifically, the City must demonstrate that any added General Fund costs generated by the new service population projected to result from the growth supported by a rezoning are offset by greater General Fund revenues, resulting in a net fiscal benefit or surplus. As a general rule, this would mean that use of IFDs would be limited to areas that received substantial & quantifiable upzoning, based on actual net increases in height, bulk, density that result in greater developable FAR than the previous “baseline” zoning, or through liberalization of land use and permitting provisions that increase the certainty of entitlements and the value of property.

In general, restrict the maximum increment available to an annual average of 33-50% over the 30-year term of the IFD, and in no event allow the annual average increment over the life of the IFD to exceed the projected net fiscal benefit over the life of the IFD. This maximum average cap would include annual pay-as-you-go monies and bond service payments or some combination of both. The maximum average increment cap may be increased to 50% to fund neighborhood infrastructure that also provides clear citywide benefits, like an extension or upgrade of a MUNI light rail line or the development of a City-serving park. In any event, this policy would guarantee that an IFD diversion should always be less than the net fiscal benefit, guaranteeing that there is at least some again to the General Fund in all circumstances. This policy would not prevent the “front-loading” of increment in the beginning years of an IFD to allow for bonding and the acceleration of construction of neighborhood-serving infrastructure, especially since accelerating delivery of infrastructure should have a correspondingly positive effect on property tax revenues for the General Fund.

Limit to areas with documented existing infrastructure deficiencies. Because the City has not developed universally-applied and objective citywide standards for assessing the sufficiency (or deficiency) of existing neighborhood-serving infrastructure, BOS-adopted planning documents (like Area Plans) that qualitatively and/or quantitatively describe such deficiencies will suffice until new citywide standards are adopted at a later date. After the adoption of a new IFD policy, the Capital Planning Committee should be tasked with developing a systematic and quantitative set of criteria or standards for assessing existing neighborhood infrastructure deficiencies in the following areas: (i) neighborhood parks & open space improvements; (ii) “Better Streets” streetscape & pedestrian safety improvements; (iii) bicycle network improvements; (iv) transit-supportive improvements; (v) publicly-owned community center and/or child-care facilities. Furthermore, the CPC would need to adopt citywide standards to avoid the use of IFD funds for “gold-plated park benches” or facilities that far exceed citywide norms for cost and quality.

Limit use of IFD monies to individual infrastructure projects where a source of long term maintenance funding is identified. Within an IFD, limit expenditure of IFD monies to projects that have identified a separate source of funding for ongoing maintenance and operations. In some cases this could be through public-private agreements, such as a Master HOA agreeing to maintain a public park or a Community Benefit District agreeing to fund long-term maintenance, or via the creation of a new supplemental property tax assessment district, like a Mello-Roos Community Facilities District.

Strategic Criteria:

In general, limit IFDs to parcels without any occupied residential use. The City may want to exclude parcels that contain existing occupied residential structures. This is because IFD law requires an actual voter-based election if there are 12 or more registered voters within the proposed boundaries of an IFD. If there are less than 12 registered voters, the law only requires a weighted vote of the property owners, which, in general, should reduce the complexity and time required for forming a district. On the other hand, there may be circumstances where a voter-based election may be both desirable and manageable.

Use IFDs as a strategy to leverage additional non-City resources. As noted in Threshold Criteria #1 above, IFDs should be used as a tool to leverage additional regional, state, and federal funds, thereby serving a purpose beyond earmarking General Fund resources for needed infrastructure. In particular, IFDs may prove instrumental in securing matching federal or state dollars for transportation projects.

Consider adopting a limited policy of “overriding considerations” for situations where the BOS may have adopted zoning that purposely restricts or limits the economic “highest and best” use of a given area, thereby limiting or reducing the net General Fund benefit derived from a rezoning, but where other social policy objectives might dictate that some IFD revenues be spent on supportive infrastructure.

Capital Plan Methodology

Capital Plan Assumptions

• The FY2020-29 Capital Plan uses the Annual Infrastructure Construction Cost Inflation Estimate (AICCIE) of 6% as the escalation rate for the first 2 years, followed by 5% for the remainder of the Plan.
• Fiscal years (FY) in the Plan refer to the calendar year in which the City’s July 1 to June 30 budget cycle ends. For example, FY2020 refers to calendar year dates from July 1, 2019 to June 30, 2020.
• Dollars are listed in thousands for all financial schedules unless otherwise noted.
• For all planned General Obligation Bonds, the financial schedules show the total bond amount in the fiscal year during which the bond is to be approved by voters. For example, a G.O. Bond proposal on the November 2018 ballot will appear in FY2019 of the financial schedule.
• The General Obligation Bond Program assumes growth in Net Assessed Value of 6.49% in FY2020, 4.51% in FY2021, 4.31% in FY2022, 4.03% in FY2023, 4.03% in FY2024, and 3.50% annually thereafter.
• When issued, G.O. Bonds proposed by this Plan will not increase voters’ long-term property tax rates above FY2006 levels. In other words, new G.O. Bonds will only be used as funding source when existing approved and issued debt is retired and/or the property tax base grows.
• The General Fund Debt Program assumes that General Fund discretionary revenues grow 4.50% in FY2020, 3.79% in FY2021, 3.15% in FY2022, 2.97% in FY2023, 3.19% in FY2024, and 3.50% annually thereafter. In addition, the General Fund Debt Program assumes that the amount of General Fund revenues spent on debt service will not exceed 3.25%.
• The Pay-As-You-Go Program assumes General Fund and Senate Bill 1 Street Repaving as revenue sources.

Jobs Creation Estimation Methodology

 Source: Economic Multipliers from Office of Economic Analysis, Controller’s Office, REMI Model Outputs

Infrastructure Finance Districts Criteria

1. Limit to areas that are rezoned as part of an Area Plan or Development Agreement approved by the Board of Supervisors (BOS) and also adopted as a Planned Priority Development Area (PDA) by the Association of Bay Area Governments (ABAG). Priority Development Areas (PDAs) are locally-identified, infill development opportunity areas within existing communities. They are generally areas of at least 100 acres where there is local commitment to developing more housing along with amenities and services to meet the day-to-day needs of residents in a pedestrian-friendly environment served by transit. To be eligible to become a PDA, an area has to be within an existing community, near existing or planned fixed transit or served by comparable bus service, and planned for more housing. Designation of PDAs expresses the region’s growth priorities and informs regional agencies, like the Metropolitan Transportation Commission (MTC), which jurisdictions want and need assistance. Planned PDAs are eligible for capital infrastructure funds, planning grants, and technical assistance. Linking creation of future IFDs to areas designated as PDAs will allow the City to leverage the increment generated by an IFD to increase its chances to receive matching regional, state, or federal infrastructure and transportation grants.
2. Limit to areas where a rezoning results in a net fiscal benefit to the General Fund as determined by the Controller’s Office. Specifically, the City must demonstrate that any added General Fund costs generated by the new service population projected to result from the growth supported by a rezoning are offset by greater General Fund revenues, resulting in a net fiscal benefit or surplus. As a general rule, this would mean that use of IFDs would be limited to areas that received substantial & quantifiable upzoning, based on actual net increases in height, bulk, density that result in greater developable FAR than the previous “baseline” zoning, or through liberalization of land use and permitting provisions that increase the certainty of entitlements and the value of property.
3. In general, restrict the maximum increment available to an annual average of 33-50% over the 30-year term of the IFD, and in no event allow the annual average increment over the life of the IFD to exceed the projected net fiscal benefit over the life of the IFD. This maximum average cap would include annual pay-as-you-go monies and bond service payments or some combination of both. The maximum average increment cap may be increased to 50% to fund neighborhood infrastructure that also provides clear citywide benefits, like an extension or upgrade of a MUNI light rail line or the development of a City-serving park. In any event, this policy would guarantee that an IFD diversion should always be less than the net fiscal benefit, guaranteeing that there is at least some again to the General Fund in all circumstances. This policy would not prevent the “front-loading” of increment in the beginning years of an IFD to allow for bonding and the acceleration of construction of neighborhood-serving infrastructure, especially since accelerating delivery of infrastructure should have a correspondingly positive effect on property tax revenues for the General Fund.
4. Limit to areas with documented existing infrastructure deficiencies. Because the City has not developed universally-applied and objective citywide standards for assessing the sufficiency (or deficiency) of existing neighborhood-serving infrastructure, BOS-adopted planning documents (like Area Plans) that qualitatively and/or quantitatively describe such deficiencies will suffice until new citywide standards are adopted at a later date. After the adoption of a new IFD policy, the Capital Planning Committee should be tasked with developing a systematic and quantitative set of criteria or standards for assessing existing neighborhood infrastructure deficiencies in the following areas: (i) neighborhood parks & open space improvements; (ii) “Better Streets” streetscape & pedestrian safety improvements; (iii) bicycle network improvements; (iv) transit-supportive improvements; (v) publicly-owned community center and/or child-care facilities. Furthermore, the CPC would need to adopt citywide standards to avoid the use of IFD funds for “gold-plated park benches” or facilities that far exceed citywide norms for cost and quality.
5. Limit use of IFD monies to individual infrastructure projects where a source of long term maintenance funding is identified. Within an IFD, limit expenditure of IFD monies to projects that have identified a separate source of funding for ongoing maintenance and operations. In some cases this could be through public-private agreements, such as a Master HOA agreeing to maintain a public park or a Community Benefit District agreeing to fund long-term maintenance, or via the creation of a new supplemental property tax assessment district, like a Mello-Roos Community Facilities District.

Strategic Criteria

• In general, limit IFDs to parcels without any occupied residential use. The City may want to exclude parcels that contain existing occupied residential structures. This is because IFD law requires an actual voter-based election if there are 12 or more registered voters within the proposed boundaries of an IFD. If there are less than 12 registered voters, the law only requires a weighted vote of the property owners, which, in general, should reduce the complexity and time required for forming a district. On the other hand, there may be circumstances where a voter-based election may be both desirable and manageable.
• Use IFDs as a strategy to leverage additional non-City resources. As noted in Threshold Criteria #1 above, IFDs should be used as a tool to leverage additional regional, state, and federal funds, thereby serving a purpose beyond earmarking General Fund resources for needed infrastructure. In particular, IFDs may prove instrumental in securing matching federal or state dollars for transportation projects.
• Consider adopting a limited policy of “overriding considerations” for situations where the BOS may have adopted zoning that purposely restricts or limits the economic “highest and best” use of a given area, thereby limiting or reducing the net General Fund benefit derived from a rezoning, but where other social policy objectives might dictate that some IFD revenues be spent on supportive infrastructure.

Capital Plan Methodology

Facilities Renewal Resource Model (FRRM)

• Develop a budget model to predict annual funding requirements for facilities renewal and document the existing backlog of deferred maintenance in a consistent way for all departments.
• Provide a basis for a funding plan that will first address adequate resources for renewal and then a reduction of the deferred maintenance backlog.
• Create consistent and comparative data among departments for determining funding allocations and targets for addressing renewal as a part of operating or capital budgets.
• Deliver a cost model to each department with associated staff training so that facilities renewal and deferred maintenance needs can be updated annually and progress in meeting those needs can be measured.
• Provide a planning tool for departmental use which provides a useful life “systems” profile of each building as a way of predicting future funding needs or packaging projects to leverage fund sources.
• Develop a credible model to assess needs consistently and to focus on total funding needs and strategies.
• The model uses building information (gross square feet, construction date, facility subsystem type, etc.) and an approach based on subsystem life cycles and replacement costs to estimate the backlog of deferred maintenance and future capital reinvestment needs. Below is an example of the ten-year renewal forecast report generated by FRRM for a particular facility. This report, one of dozens available, shows subsystems within the building that need to be replaced during the next 10 years and the corresponding cost (in thousands). A variety of other reports are available for further analysis.

Capital Plan Assumptions

• Throughout the time frame of the Plan from FY2018-27, the Plan uses the Annual Infrastructure Construction Cost Inflation Estimate (AICCIE) of 5 percent as the escalation rate.
• Fiscal years (FY) in the Plan refer to the calendar year in which the City’s July 1 to June 30 budget cycle ends. For example, FY2018 refers to calendar year dates from July 1, 2017 to June 30, 2018.
• Dollars are listed in thousands for all financial schedules unless otherwise noted.
• For all planned General Obligation Bonds, the financial schedules show the total bond amount in the fiscal year during which the bond is to be approved by voters. For example, a G.O. Bond proposal on the November 2018 ballot will appear in FY2019 of the financial schedule.
• The General Obligation Bond Program assumes growth in Net Assessed Value of 4.19 percent in FY2018, 5.90 percent in FY2019, 4.49 percent in FY2020, and 3.5 percent annually thereafter.
• When issued, G.O. Bonds proposed by this Plan will not increase voters’ long-term property tax rates above FY2006 levels. In other words, new G.O. Bonds will only be used as funding source when existing approved and issued debt is retired and/or the property tax base grows.
• The General Fund Debt Program assumes that General Fund discretionary revenues grow 4.8 percent in FY2019, 3.2 percent in FY2020, 2.8 percent in FY2021, and 2.7 percent thereafter. In addition, the General Fund Debt Program assumes that the amount of General Fund revenues spent on debt service will not exceed 3.25 percent.
• The Pay-As-You-Go Program assumes only General Fund revenue sources.

Jobs Creation Estimation Methodology

Source: Economic Multipliers from Office of Economic Analysis, Controller’s Office, REMI Model Outputs

The Guidelines are organized into two sets of criteria: (1) minimum “Threshold Criteria” that must be satisfied for an IFD to be formed by the BOS and (2) “Strategic Criteria” that may be considered when deciding whether to form a future IFD. These policy guidelines would not apply to any existing Redevelopment Area (IFD law prohibits it) or to any property owned or managed by the Port of San Francisco.

Threshold Criteria

1. Limit to areas that are rezoned as part of an Area Plan or Development Agreement approved by the Board of Supervisors (BOS) and also adopted as a Planned Priority Development Area (PDA) by the Association of Bay Area Governments (ABAG). Priority Development Areas (PDAs) are locally-identified, infill development opportunity areas within existing communities. They are generally areas of at least 100 acres where there is local commitment to developing more housing along with amenities and services to meet the day-to-day needs of residents in a pedestrian-friendly environment served by transit. To be eligible to become a PDA, an area has to be within an existing community, near existing or planned fixed transit or served by comparable bus service, and planned for more housing. Designation of PDAs expresses the region’s growth priorities and informs regional agencies, like the Metropolitan Transportation Commission (MTC), which jurisdictions want and need assistance. Planned PDAs are eligible for capital infrastructure funds, planning grants, and technical assistance. Linking creation of future IFDs to areas designated as PDAs will allow the City to leverage the increment generated by an IFD to increase its chances to receive matching regional, state, or federal infrastructure and transportation grants.
2. Limit to areas where a rezoning results in a net fiscal benefit to the General Fund as determined by the Controller’s Office. Specifically, the City must demonstrate that any added General Fund costs generated by the new service population projected to result from the growth supported by a rezoning are offset by greater General Fund revenues, resulting in a net fiscal benefit or surplus. As a general rule, this would mean that use of IFDs would be limited to areas that received substantial & quantifiable upzoning, based on actual net increases in height, bulk, density that result in greater developable FAR than the previous “baseline” zoning, or through liberalization of land use and permitting provisions that increase the certainty of entitlements and the value of property.
3. In general, restrict the maximum increment available to an annual average of 33-50% over the 30- year term of the IFD, and in no event allow the annual average increment over the life of the IFD to exceed the projected net fiscal benefit over the life of the IFD. This maximum average cap would include annual pay-asyou- go monies and bond service payments or some combination of both. The maximum average increment cap may be increased to 50% to fund neighborhood infrastructure that also provides clear citywide benefits, like an extension or upgrade of a MUNI light rail line or the development of a City-serving park. In any event, this policy would guarantee that an IFD diversion should always be less than the net fiscal benefit, guaranteeing that there is at least some again to the General Fund in all circumstances. This policy would not prevent the “front-loading” of increment in the beginning years of an IFD to allow for bonding and the acceleration of construction of neighborhood-serving infrastructure, especially since accelerating delivery of infrastructure should have a correspondingly positive effect on property tax revenues for the General Fund.
4. Limit to areas with documented existing infrastructure deficiencies. Because the City has not developed universally-applied and objective citywide standards for assessing the sufficiency (or deficiency) of existing neighborhood-serving infrastructure, BOS-adopted planning documents (like Area Plans) that qualitatively and/or quantitatively describe such deficiencies will suffice until new citywide standards are adopted at a later date. After the adoption of a new IFD policy, the Capital Planning Committee should be tasked with developing a systematic and quantitative set of criteria or standards for assessing existing neighborhood infrastructure deficiencies in the following areas: (i) neighborhood parks & open space improvements; (ii) “Better Streets” streetscape & pedestrian safety improvements; (iii) bicycle network improvements; (iv) transit-supportive improvements; (v) publicly-owned community center and/or childcare facilities. Furthermore, the CPC would need to adopt citywide standards to avoid the use of IFD funds for “gold-plated park benches” or facilities that far exceed citywide norms for cost and quality.
5. Limit use of IFD monies to individual infrastructure projects where a source of long term maintenance funding is identified. Within an IFD, limit expenditure of IFD monies to projects that have identified a separate source of funding for ongoing maintenance and operations. In some cases this could be through public-private agreements, such as a Master HOA agreeing to maintain a public park or a Community Benefit District agreeing to fund long-term maintenance, or via the creation of a new supplemental property tax assessment district, like a Mello-Roos Community Facilities District.

Strategic Criteria

• In general, limit IFDs to parcels without any occupied residential use. The City may want to exclude parcels that contain existing occupied residential structures. This is because IFD law requires an actual voterbased election if there are 12 or more registered voters within the proposed boundaries of an IFD. If there are less than 12 registered voters, the law only requires a weighted vote of the property owners, which, in general, should reduce the complexity and time required for forming a district. On the other hand, there may be circumstances where a voter-based election may be both desirable and manageable.
• Use IFDs as a strategy to leverage additional non-City resources. As noted in Threshold Criteria #1 above, IFDs should be used as a tool to leverage additional regional, state, and federal funds, thereby serving a purpose beyond earmarking General Fund resources for needed infrastructure. In particular, IFDs may prove instrumental in securing matching federal or state dollars for transportation projects.
• Consider adopting a limited policy of “overriding considerations” for situations where the BOS may have adopted zoning that purposely restricts or limits the economic “highest and best” use of a given area, thereby limiting or reducing the net General Fund benefit derived from a rezoning, but where other social policy objectives might dictate that some IFD revenues be spent on supportive infrastructure.

C. Glossary of Terms

Commonly used terms throughout the Plan are defined below.

Area Plans: Subsections of the City’s General Plan that address the specific urban design, open space, transportation, housing, and community facility goals of a particular neighborhood. For the purposes of the Capital Plan, Area Plans refer to those Areas of high marginal growth governed by Chapter 36 of the San Francisco Administrative Code: Balboa Park, Central SOMA, Eastern Neighborhoods, Market/Octavia, Rincon Hill, Transit Center, and Visitacion Valley.

Assessed Value: The dollar value assigned to individual real estate or other property for the purpose of levying taxes.

Capital Project: A major construction and improvement project, including the planning and design phases. Examples include the resurfacing of a street and the construction of a new hospital, bridge, or community center.

Capital Plan: Also referred to as the Plan. The City and County of San Francisco Capital Plan outlines all of the Capital Projects that are planned for the next 10 years. The City’s Capital Plan is updated every two years and has a 10-year horizon. Not every project in the plan has funding (see Deferred Project and Emerging Need), but the Plan aims to present a complete picture of the City’s strategy for maintaining and improving its infrastructure and key assets. The Capital Planning Program produces the Capital Plan based on department capital requests, and the Capital Planning Committee reviews and proposes the Plan to the Board of Supervisors.

Certificates of Participation (COPs): A commonly used form of lease financing for capital improvement projects or purchases of essential equipment. COPs are loans to the city that are paid back by the revenue generated by a building or other city-owned assets.

Community Facility District (CFD): Also known as a Mello-Roos District. A defined area such as a county, city, special district, or joint powers authority where residents vote to approve a special property tax on real estate, in addition to the normal property tax, to fund public improvements benefiting the district. The tax is often used to secure debt.

Debt Service: The annual payment of principal and interest on the City’s bonded debt (see Municipal Bond for more information on bonded debt). Debt service can be used to describe the payments for an individual project or to provide an overall picture of the city’s bonded debts.

Deferred Project: A project not funded in the Capital Plan either due to lack of funding or the timeline of the project falling outside of the 10-year planning cycle.

Emerging Need: A project not funded in the Capital Plan because additional planning is needed or there is significant uncertainty around project-specific issues. Emerging needs are included in the Plan to show the City’s awareness that they may become more significant and/or defined in coming years.

Enhancement: An investment that increases an asset’s value and/or changes its use. Enhancements typically result from the passage of new laws or mandates, functional changes, or technological advancements. Examples include purchasing or constructing a new facility or park, major renovations of or additions to an existing facility, accessibility improvements to comply with the Americans with Disabilities Act (ADA), and planting new street trees. Typically, enhancements are large-scale, multi-year, projects such as renovations, additions, or new facilities. While some project costs can be funded with pay-as-you-go sources, most enhancements require debt financing through the issuance of General Obligation bonds, Certificates of Participation, or lease revenue bonds.

Enterprise Department: An Enterprise Department generates its own revenues from fees and charges for services and thus does not rely on the General Fund. The City has four Enterprise departments: Public Utilities Commission, San Francisco International Airport, Port of San Francisco, and the Municipal Transportation Agency.

External Agency: An agency that is a separate, autonomous entity from the City and County of San Francisco and operates separately.

Facilities Maintenance:
See Routine Maintenance.

General Fund: The largest of the City’s funds, the General Fund is a source for discretionary spending and funds many of the basic municipal services such as public safety, health and human services, and public works. Primary revenue sources for the General Fund include local taxes such as property, sales, business, and others.

General Fund Department: A City department that relies primarily or entirely on the General Fund as a revenue source to provide City services. The General Fund departments included in the Plan are: Asian Art Museum, Arts Commission, California Academy of Sciences, District Attorney’s Office, Emergency Management, Fine Arts Museum, Fire, General Services Agency, Homelessness and Supportive Housing, Human Services Agency, Juvenile Probation, Police, Public Health, Public Library, Public Works, Recreation and Parks, Sheriff, Technology, and the War Memorial and Performing Arts Center.

General Plan: Adopted by the Planning Commission and approved by the Board of Supervisors, the General Plan is the document that serves as the foundation for all land use decisions in the City, especially around the issues of land use, circulation, housing, conservation, open space, noise and safety. It contains specific Area Plans for the planning of different City neighborhoods.

General Obligation Bonds (G.O. Bonds): A municipal bond secured by property tax revenues. G.O. Bonds are appropriately used for the construction and/or acquisition of improvements to real property broadly available to the residents and visitors of San Francisco.

Horizontal Infrastructure: Infrastructure required to deliver basic public goods and services such as roads, sewers, water lines, bridges, transit rail, and open space, among others.

Infrastructure: Physical elements of the city that allow it to function effectively for residents, workers, and visitors. This can include roads, bridges, sewers, water lines, transit rail, open space, hospitals, housing units, city offices, jails, and other public assets.

Job Years: Defined as one year of full-time work. For example, three people employed full-time for five years represent 15 job years.

Lease Financing: An important source of medium- and long-term financing where the owner of an asset gives another person the right to use that asset against periodical payments. A common example would be a landlord leasing an apartment for a monthly rent. The owner of the asset is known as lessor and the user is called lessee. There are various forms of lease financing in the Plan, including Certificates of Participation.

Mello-Roos District: See Community Facility District.

Municipal Bond: A debt obligation issued by a government entity, such as the City and County of San Francisco. When an individual buys a municipal bond, they are loaning money to the issuer – the City – in exchange for a set number of interest payments over a predetermined period. At the end of that period, the bond reaches its maturity date, and the full amount of the original investment is returned to the individual. The amount of money that the City owes as a result of selling municipal bonds is known as the City’s bonded debt. Net Assessed Value: The total assessed value of property in San Francisco, excluding property considered exempt from tax levies, such as properties owned by religious or non-profit organizations.

Pay-As-You-Go (Pay-Go): Refers to the funding of Capital Projects with current General Fund revenue on an annual basis rather than paying for projects by taking on long-term debt or using another dedicated funding source.

The Plan: See Capital Plan.

Renewal: An investment that preserves or extends the useful life of facilities or infrastructure. Examples of renewal projects include the repair and replacement of major building systems including the roof, exterior walls and windows, and heating and cooling systems; street resurfacing; and the repair and replacement of infrastructure in the public right-of-way, including sidewalks and street structures.

Since renewal projects tend to be smaller investments compared with investments needed to replace entire facilities, the Plan funds many of these needs through Pay-Go cash revenue sources, appropriated through the City’s annual budget process.

Revenue Bond: A municipal bond secured by and repaid from specific revenues. Pledged revenues are often earnings from a self-supporting enterprise or utility. Typically, these revenues are associated with the asset for which the bond was originally issued, for example those issued by the Airport or Public Utilities Commission.

Right-of-Way Infrastructure: Infrastructure constructed and maintained by the City for right-of-way purposes, which are defined as the right of public travel on certain lands. Examples include the traveled portion of public streets and alleys, as well as the border areas, which include, but not limited to, any sidewalks, curb ramps, planting strips, traffic circles, or medians.

Routine Maintenance: Also known as Facilities Maintenance. Projects that provide for the day-to-day maintenance of existing buildings and infrastructure, including labor costs. Unlike renewals and enhancements, these are
annual allocations.

Vertical Infrastructure: Facility structures such as hospitals, clinics, public safety buildings, administrative facilities, public housing units, community centers, and jails, among others.

A. Administrative Code

Sec 3.20. Capital Expenditure Plan

By March 1 of each odd-numbered year, beginning with March 1, 2013, the City Administrator shall submit to the Mayor and Board of Supervisors a ten-year capital expenditure plan which shall include an assessment of the City’s capital infrastructure needs, investments required to meet the needs identified through this assessment, and a plan of finance to fund these investments. By May 1 of the same year, the Mayor and Board of Supervisors shall review, update, amend, and adopt by resolution the ten-year capital expenditure plan. The Mayor and Board of Supervisors may update the plan as necessary and appropriate to reflect the City’s priorities, resources, and requirements.

The capital expenditure plan shall include all recommended capital project investments for each year of the plan. The plan shall incorporate all major planned investments to maintain, repair, and improve the condition of the City’s capital assets, including but not limited to city streets, sidewalks, parks, and rights-of-way; public transit infrastructure; airport and port; water, sewer, and power utilities; and all City-owned facilities.

The capital expenditure plan shall include a plan of finance for all recommended investments, including proposed uses of General and Enterprise Funds to be spent to meet these requirements. Additionally, the plan shall recommend the use and timing of long-term debt to fund planned capital expenditures, including General Obligation bond measures.

The capital expenditure plan shall include a summary of operating costs and impacts on City operations that are projected to result from capital investments recommended in the plan. This operations review shall include expected changes in the cost and quality of City service delivery.

The plan shall also include a summary and description of projects deferred from the ten-year capital expenditure plan given non-availability of funding necessary to meet assessed capital needs. (Added by Ord. 216-05, File No. 050920, App. 8/19/2005; amended by Ord. 40-06, File No. 060078, App. 3/10/2006; Ord. 222-11, File No. 111001, App. 11/15/2011, Eff. 12/15/2011) (Former Sec. 3.20 added by Ord. 223-97, App. 6/6/97; amended by Ord. 55-98, App. 2/20/98; repealed by Ord. 216-05)

Sec. 3.21. Capital Planning Committee

There is hereby created a Capital Planning Committee consisting of the City Administrator as chair, the President of the Board of Supervisors, the Mayor’s Finance Director, the Controller, the City Planning Director, the Director of Public Works, the Airport Director, the Executive Director of the Municipal Transportation Agency, the General Manager of the Public Utilities System, the General Manager of the Recreation and Parks Department, and the Executive Director of the Port of San Francisco. Each member of the Capital Planning Committee may designate a person to represent her or him as a voting member of the Committee. Such designations shall be in written documents signed by the designating member and filed with the City Administrator, or her or his designee.

The mission of the Capital Planning Committee is to review the proposed capital expenditure plan and to monitor the City’s ongoing compliance with the final adopted capital plan. As such, the Capital Planning Committee shall (1) establish prioritization and assessment criteria to assist the City Administrator with the development of the capital expenditure plan, (2) annually review the City Administrator’s proposed capital expenditure plan prior to its submission to the Mayor and Board of Supervisors, and (3) review the annual budget and any proposed use of long-term debt, including General Obligation bonds, to ensure compliance with the adopted capital expenditure plan.

The Board of Supervisors shall not place on the ballot, or authorize the issuance of any long term financing, until the Capital Planning Committee completes a review of the proposal and submits its recommendation to the Board of Supervisors. Each proposal shall be in form and substance satisfactory to the Committee, and shall be accompanied by descriptive financial, architectural, and/or engineering data, and all other pertinent material in sufficiently complete detail to permit the Committee to review all aspects of the proposal. The Committee shall submit a written report to the Mayor and the Board analyzing the feasibility, cost, and priority of each proposal relative to the City’s capital expenditure plan.

The Chair of the Capital Planning Committee is hereby authorized to adopt such rules, definitions, and procedures as are necessary to meet the requirements described in Section 3.20 and 3.21. (Added by Ord. 216-05, File No. 050920, App. 8/19/2005) (Former Sec. 3.21 added by Ord. 223-97, App. 6/6/97; repealed by Ord. 216-05)

SEC 3.20. Capital Expenditure Plan

SEC. 3.21. Capital Planning Committee

SEC 3.20. Capital Expenditure Plan

SEC. 3.21. Capital Planning Committee