reconstruction. that is where we have failed to do ongoing maintenance of the street and have failed to make capital investments to preserve the life of the street. so those blocks that have fallen apart, you know -- concrete is spending up, buses are rolling over pot holes. you are right, it is obviously a capital investment. it costs upward of five $1,000 per block, and we have 11,000 blocks in the city. the second thing we tried to do is what we tried to do to prevent streets from getting to the point where they need that major reconstruction. we called it resurfacing for repaving. that is where we grind off the top two inches of asphalt and replace it with new as all -- asphalt.

those streets that are fairly simple, about $70 -- $70,000 to $90,000. those streets have a useful life of 20 to 30 years, depending on the level of traffic. supervisor chu: so that extends a st.'s useful life 20 years? >> in some cases, on little-used streets, they do not need to be reserved for 40 years. what really impacts the street is heavy vehicular traffic. then we are doing what mtc and their pavement management program requires, that we spend a certain amount of money on preventive maintenance, not maintenance. that is where we get into slurry

sealing and crack sealing. if those things are done at the right time of the life cycle of the pavement, greatly extends the life of that asset. if we do the salary ceiling -- slurry sealing, then we will not need to do crack ceisealing. all of those are considered capital assets, and they are all, i have to tell you, extremely good practices, in terms of minimizing the city's investment in its infrastructure. supervisor chu: and how doelong, for example, does a slurry seal

extend the life of the street? >> 20 years. and it is a very cost-effective treatment. part of the entire life cycle of the pavement requires us to do that kind of treatment and it is the same with a building, supervisor. we might build an entirely new building, an entirely new hospital, like general hospital, or we might be replacing roofs. that will last many years and is protecting the asset. even though it is not protecting the entire building, it is considered a capital improvement. should i move on?

the road repaving and resurfacing bond before you is designed to invest in the san francisco right-of-way infrastructure, providing funding source for the next three years, and is also funding our sidewalk and curb ramp improvements that are part of our americans with disability act transition plan. the condition of streets in san francisco, that pti score, in three years will be moving up from 64 to 66, and be putting us on track to 70, which is good, as opposed to fiaair, in 10 years. this book create more than 1600 jobs in san francisco and we will be distributing the project equitably throughout

neighborhoods. that language, for both the paving and streetscape improvements in the bond, is included in york mets come before you in a few weeks. something that this bond will not do is increase property tax rates for san francisco property taxpayers. we will be issuing new bonds only if all the bonds are repaid, only to ensure we do not have any property tax rate increases. the size of the bond in the capital plan, because the capital plan has made this commitment, the size of the bond was designed to meet this policy set forth in the capital plan.

i have mostly been talking about street repaving, and that is where the majority of the funds in the proposed bond measure will go, about $148 million. but we will also be spending $22 million on sidewalk excess ability improvements, which include 1900 new curb ramps citywide, 125,000 square feet of new sidewalk that is the responsibility of the city. these are sidewalks that front public property or have been damaged by the city's street trees. we will be putting $7.3 million toward needed rehabilitation and repair of our street structures, such as bridges, guard rails, tunnels, retaining walls, stairs, viaducts.

$50 million for city implementation bicycle and streetscape improvements, such as countdown lighting, sidewalk extensions, bicycle improvements, tree planting, blub outs, and landscaping. finally, street traffic infrastructure improvements to reduce traffic time and improve transit reliability. again, this is a capital investment in the streets. muni is funding several later its vehicle procurement, and the kind of on board, mobile equipment that is required to make the entire transit effectiveness program work. that on board equipment would not be eligible for general obligation bond funding, but they do have sources to cover those projects. >> on -- supervisor chu: on these categories, can you

explain to me, on the streetscape, bicycle, landscaping improvements, $50 million, as well as the transit straight signal infrastructure -- why doesn't make sense to put all of these into a string of effort -- resurfacing bond? >> let me say first the streetscape, bicycle, and other improvements are about having streets that are usable by everybody. we have found that there are a lot of people who are very concerned about pedestrian bicycle safety, the livability of our streets. my next slide will show this is really the only funding source available for those improvements, and they are part of st. safety. and this is not just a resurfacing bond, but a safety bond.

we also believe when we are going into the streets and improving them, muni, because it carries so many passengers, is a key part of our transportation system, that women are making these improvements in the street -- when we are making these improvements in the street, improvements to muni should also be made. with the st. transit signal infrastructure, the mta does not have any other identify the source of funding. >>supervisor chu: i'd think many of us recognize the need to have transit improvement work, whether it is the signals we are talking about in this situation, among other things, for muni. the question is why this comes forward with a street repaving bond. is there something that links transit signals to a street?

if you are paying, is there something that you need to put into the ground anyway? >> what we're really trying to look at is the entire street and road network, the concept of the bond that we are approving -- we are trying to improve the entire network. yes, muni is implementing their signal upgrades to do that. it is much more efficient for us to be doing it at the same time with the same contractor doing the street resurfacing. throughout the street program, we are trying to coordinate with anyone else digging up the streets, and that includes the water department, sewer department, pg&e, and anything that mta is doing in the street because it saves both money and

aggravation for residents for having streets being dug up, construction going on more than necessary. this slide shows what other sources of funding, in addition to the bond, are anticipated over the next three years. you will see, about two-thirds of the funds for street resurfacing are in this bond. over half of the funds or curb ramps and sidewalk a sensibility are in this bond. nearly all of the funds for structures, streetscape, bicycle improvements, and transit signaling infrastructure improvements are in this bond. so if it does not pass, we do not believe it is likely that these improvements will be implemented over the next three

years. all of that being said, however, to 60% of the funds are going to just street resurfacing, and if you add sidewalks and curbs ramps in with that. we have prioritization criteria for all of our projects. a few years ago we implemented street repaving projects coordinator with utility companies so that we could have efficiencies. we are looking at pavement condition index scores and we are trying a variety of improvements on streets. we are reaching some streets

that are in terrible condition and made investments in order to extend their useful life. as well, making improvements on those more expensive streets that are probably the one that the public feels most strongly about that we need to fix. if we put all of our money into those streets, though, we would have a lot more streets in that condition 10 years from now, if we are not making needed investments in streets that have a score around 50 now. we're putting all of our money into these areas. the sidewalk and curb ramp improvements are prioritized in accordance with our ada transition plan. those are also distributed throughout the city. we give priority to high pedestrian areas and places where there are people with

disabilities. they have let us know that they need and accessible path of travel to get to work, a medical appointment, school. the st. structure rehabilitation program is prioritized based on the level of safety hazard and deterioration as well as usage frequency and locations on emergency access routes. the streetscape pedestrian and the bike projects, as well as being for midwood utilities, being geographically distributed, mostly will be made in instances where there is a community-supported plan. with the $50 million for these, we have many more streets throughout the city that are candidates for these kinds of improvements than we have funds to place.

the transit signal infrastructure will be prioritized based on need. traffic, passenger volume, from your roots, transit network recommendations. it will go through the entire mta process with their committee structure in a public hearing. the bond legislation includes transparency and accountability measures. we have objective and other criteria for the selection of projects within each program. we will have a dedicated web page that lists projects, scope, budget. we will have regular hearing before the capital planning committee and the citizens general oversight obligation bonds committee. before any funds are sent -- spent on these projects, we will have to come to this board to have those funds appropriated. you will see the specific

projects that are to be accomplished with the bond funds, when that time comes. finally, i just want to mention briefly, the schedule we are on today, we are anticipating the ordinance will be before you in early july. the order and it needs to be approved on second reading by the board of supervisors by july 26, for submittal to the department of alexians july 29. -- elections july 29. that is the end of my presentation. we have program managers from various projects we are proposing to implement -- i am hoping susan from the mayor's office of disability can answer

any questions about curb ramps. supervisor chu: on the level of funding we have been the proposed budget this year, it looks like the combined source of federal, state, prop k sales tax moneys is equivalent to what it was in the current fiscal year. the big difference is, we use cops in the next year, they will not be available? >> that is correct. supervisor chu: so if this does not go through, what is the value of the cop roughly? $20 million? $30 million? >> 30. supervisor chu: ok, so without this bomb, $30 million less --

bond, $30 million less. let us go to the budget analyst report. >> madam chair, members of the committee, on the bottom of page five, as shown in attachment 2, on page 16, the estimated total debt service requirement -- between july 1, 2011 and june 30 -- a period of 24 years -- that is an annual average debt service of $8.2 million a year. that includes $240 million in the principal $189.2 million in interest. we also point out on page 6, on a five under thousand dollars home, this bond would result in an increase of property taxes of about $37.33 annually after

deductions, however, as the department pointed out, the timing of the issuance of the bonds would occur such that increases in property taxes from the proposed bond would be offset by reductions in property taxes as the city's existing general fund is redeemed. so there should be a neutral effect in terms of increased property taxes. on page 9 of our report, we point out, the mta has its own debt authority to finance the cost of the transit street signal infrastructure improvements, irrespective of the mta's current financial standing. we also point out on the bottom of page 9 we consider the proposed $148.4 million in

general-obligation bonds for street repaving and reconstruction projects to be routine and ongoing when considering the entirety of the city streets system, and therefore, find such projects -- and i say this in a perfect world -- such project would be more appropriately financed on a pay-as-you-go basis without the issuance of the proposed go bond that will relate result in long- term debt. as i mentioned, there is a significant interest expense attached to bonds. if we had the revenue, it would be more appropriate to use in general revenues -- general fund revenues. we consider conclusion, on page 10, we say in the recommendation, inclusion of the $140 million to be used for street repaving and reconstruction. $20.3 million for the minister of transportation agency transit traffic street signal

infrastructure improvement to be a matter of the board of supervisors. supervisor chu: supervisor weener? supervisor wiener: for the budget analyst, regarding the last item -- this is more corporate for reconstructing -- this is more a program as a financing item. i want to ask you what your basis is for saying that. in light of what we just heard in the presentation, i do not want to say there is conventional wisdom, but there is a view out there. i disagree that bond financing is only used for building something. when you look at par bonds, we do existing work from those assets that perhaps sometimes

accrued from a long period of neglect. if you add up the square footage of our roads, i would suspect that our roads are our largest asset. so why is it inappropriate? >> madam chair, members of the committee, but i stated, in a perfect world, in our judgment, it would be better to use general fund revenues. i state that, supervisor, because, as you know, on the top of page six, when you issue $240 million in general-obligation bonds, you are automatically incurring an additional $189 million in interest expense. that is the reason why we believe, if the city has sufficient revenues -- we did not say do not do this. we said as a policy. if the city has sufficient revenues that could pay for this, it would save $189

million. that is primarily -- the only reason we say this. supervisor chiu supervisor wie.: supervisor wiener: that is true of every bond. if we did that have all these problems, in a perfect world, we would be able to pay for everything and i would be able to pay for my home in cash instead of taking on a mortgage. how is this different from a park spawned where we do capital work that is not as dramatic as building a new jail or something like that? >> supervisor wiener, we look at this from street reconstruction. these last about seven years, something of that nature. continually, these types of projects that are funded must be continually improve done again.

that is where we see a difference. supervisor wiener: 4 significant repaving, 20 years, seven years for the slurry sealing. i agree, there is a gray area. as supervisor carmen chu said, when you are talking about extreme reconstruction compared to the packaging of a pothole, and there is a big spectrum in between. i just wanted to see where that line is. >> the other thing, as we say in our report, the department has acknowledged, within three years, we need to find additional revenues for this. it is an ongoing problem. but having said all this, our recommendation to you is not to disapprove this. we simply said because of that, we considered it to be a policy for the board. if we felt strongly against

this, we would say we recommend you do not approve it, and we are absolutely not saying that. >> thank you, supervisors. i do appreciate the change on that item because i grappled with the same issue on what is a corporate to be considered long- term compared to something that should be covered in operations. i will be a first to say, if we had more general fund dollars to put into street resurfacing, we would do that, but given the reality of what we are seeing, where our budget has been, it is asking me to reconsider the cap the project and what we would maintain. in an ideal world come as mr. rose said, i agree, we should be doing as much as we can on a pay-as-you-go basis and identify general fund sources, as you once did, for street resurfacing. the thing that also brings me concern is, after the three years that would be paid for for the st. reservists in bonn, we still have an unidentified

source of funding to deal with the condition of our streets. to that extent, i wonder if the department could speak about the efforts on identification of future revenues. are we considering a certain portion that would potentially come from the general fund, as we once invested in? are we taking a look at prop k allocations? i have heard that we are potentially looking at the vls issue, but that is contingent on what the state does. to me, that the not sound like a completely reliable source as well. could you speak about those efforts? >> as i mentioned in my presentation, the street resurfacing finance group looked at 17 different funding and revenue options as a long-term funding source, and they prioritized them -- some that

were likely, good options, some that did not make sense. amongst the ones that were most highly regarded, the vehicle license fee. there was also consideration of a city-wide parcel tax. the city still has room for a quarter-cent sales tax. one of the things that i thought was interesting about the street resurfacing, the working group's recommendations were that -- the vls, as it is proposed -- it would be a general tax. it would not be a special tax that would require two-thirds voter approval. it but it woulwould be a simplel tax that could be approved by a majority of voters. we would consider implementing

part of that tax, a parcel tax, what we call a conditional tax. the tax could only be levied in a subsequent year, if the city actually made an investment in its streets. so we will set a floor that would give incentive to you, the policymakers, to make these investments and appropriations for streets. and they could be tied to an absolute appropriation of or to pavement condition index scores, and if the city fails to make those investments in one year, essentially, this big it would be turned off and those funds would not be available for appropriation or collection in a subsequent year. all of these revenue measure that i have spoken of, reallocation of prop k sales tax

revenues, that was one of the things considered. all of this will require policy approval in working through a political process. so i cannot come before you now and say we have a magic bullet or something that is not going to require policy consideration and approval by this board, and probably by the voters. supervisor chu: thank you. why don't we go to public comment on this item. is there anyone from the public that would like to comment on this item? item 3. >> good afternoon, supervisors. san francisco bicycle coalition. we are watching and listening with great interest. pavement quality is of pa