all get so used to over time hearing complaints about muni, sometimes it can be dismissed as a san francisco pass time, it's our favorite pass time, trashing muni. but this is having real life consequences for hundreds of thousands of people in this city. and i just don't think we are even close to having the path forward to getting this system back on track. and, so, i hope we can get there and i just don't think we're even close. >> okay. mr. strong, do you want to continue? >> yes. thank you very much. so, if you look at the overall capital plan on the next slide here, we look at where the investments are going and it is $25 billion. this is an aggressive capital plan. the last ten-year capital plan we did was also $25 billion.

and some of the big -- the big investment increases are in the infrastructure and streets category where we would have street repaving. but we also have some of the sewer system improvement program and the water system improvement program that the puc is working on diligently. the other -- and then in the transportation area, again, this is where you would have the muni along with the sfo improvements and so forth. the external agencies, you know, a lot of that are in the development or redevelopment or former redevelopment area along with transbay -- along with the transbay center. the funding source, this is where, you know, a constrained plan becomes really difficult and i have to say we are one of the few, one of the only ones i'm aware of where we list on our capital plan what we fund and what we don't fund. how we're doing that is if you look at the pie chart on the

left, you can see for enterprise departments we're able to issue a significant amount of debt to cover our -- to cover some of our capital liabilities. so, that is especially true in the airport and the puc where we're up to 50% of the operating budget is going toward debt service. now, that's not the case with muni that they actually have started to be able to issue debt, which is something that's also new. this happened in the last few years or the last year or so where they're able to start to begin to address some of their needs that way. if you look at the pie chart on the right, you can see for the general fund departments, we really are -- we really have relied quite a bit on general obligation bonds and going to the voters and getting the 67% support to address some of these really serious needs. but the other difference here is that our general fund contribution has gone up dramatically and again that's really due to the tsip program and the investment in streets. if we go to the next slide,

just briefly, we want to spend a little bit of time. we know you hear from the enterprise departments and they have their own capital staff. this is just an overview of their contribution of the capital plan of what they're going to be doing. it's around $20 billion, that includes the external agencies as well. and there is a list of the different projects that range from what i just mentioned, the transbay terminal of $3.5 billion, you know, to the central subway and pier 70 rehabilitation and development. the next slide, you know, begins to discuss where we are with respect to our general fund. so, this is just the general fund program and looking at those needs. and you can see that while, again, this is a record to be investing $4.7 billion, we're also deferring $4.7 billion. that's a better ratio than what we've had in the past. a lot of those improvements, a lot of those funded

improvements have been around earthquake safety and i think this is -- it's part of being in san francisco, a town that has a lot of earthquake vulnerabilities. it's part of being an older city. and that is where a lot of the emphasis has been. we've also been making significant contributions in disability access. i should say these are just listing the set of a-d-a transition plan, access disability improvement. we do a-d-a improvements in almost all of our capital infrastructure projects as they are required by law. we are also making big improvements in parks and space, parks and open space. we just had a geo bond that was passed. they still have a significant backlog but we are beginning to address them. and, of course, there is also the street and intersection improvements we also mentioned, especially in the enhancement category. a lot of that number is the proposal that we've had for a little while which was to underground utilities, which i believe is in the neighborhood

of 1.6 or 7 billion dollars. but undergrounding utilities across the city. the next slide gets a little more detail. what is in the pay as you go program. so, for the general fund i mentioned there are three sources we have control over. one is the cash that we put in every year. the other is the geo bond program and the other is the general fund debt program. so, the geo bond program, we made a commitment back in 2006 with the first capital plan to grow the amount that we set aside for [speaker not understood] by 10% a year. this year we've add today that. this new capital plan, we added to the policy to fund streets and reach, stay at a pci of 70. we will not reach it right way, but by the end of the capital plan, by 2023 we should be at a pci of 70 and should cost us less to maintain it, maintain streets at that level. which is considered a good level, i should say. it's not a great level, not a super high level, but we think

a responsible one. if you look down on this list here, you can see that we've kind of outlined in red a little bit some of the transportation related improvements because they do represent a significant amount of what we are able to do with our cash program. and that's about $1.1 billion which is a little more than half of all the funds that we are able to set aside. and, again, what's really driving this is the tsip program and part of the tsip is also that street resurfacing. the next graph kind of shows what's going on. and i think we had some discussions about this with supervisor breed when we were in her office just because of her experience in the african-american cultural center and the challenge of maintaining our facilities, the mode of streets and we have a large backlog. if we're not able to fund our good repair, renewal needs,

renewal needs on a regular basis, the backlog grows. the purple line at the top shows the backlog growing at a faster rate than what our capital plan recommends, which is the red line. the reason for that is that when the capital plan makes its recommendation typically during the budget process, we funded renewals at about 33% of what we're recommending. so, that's one of our challenges, too, if we were able to better fund those, if we're able to commit to fully funding our renewals, then we would see this red line and the red line actually crosses in about 20 26, we would be funding our annual needs and address the city's renewal backlog. so, than is' what this graph is showing here. the line on the bottom is basically showing what's recommended in the capital plan. ~ the next graph, i guess, you know, further illustrates that point. it's historical analysis that shows how much we've funded in actual dollars versus what was recommended in the plan. so, on the left is what's recommended in the plan, on the

right is what we funded in actual dollars. and, again, the big concern with us is that's a gray bar that is in the middle and you can see the plan is recommending a fairly wide gray bar. but when it comes to the budget, the gray bar gets considerably smaller. this last year we actually had a very good year for renewals. it was tied with the best renewal funding year we had had since the capital plan. but it's still not enough to really get us over the hump where we can begin to try to take down the backlog. finally, the next area of funding that we have where we have policy around is our geo bonds. again, in 2006 with a lot of help from the controller and various people, we made this commitment that we would only issue new bonds as we retire old ones. and while i know this gives nadia [speaker not understood] our finance director some heartaches periodically, we really are commit today making sure the tax rate does not go over that 2006 level.

and all the bonds we pass, as supervisor chiu was mentioning, have been done in a way that does not increase the tax rate. this shows the next set of bonds that are coming forward. there is an earthquake safety bond originally was going to be in 2013 that has been pushed back to june of 2014. this has the new transportation and street infrastructure improvement bond and part of the reason for the amount in there is that we're trying to stay within that, within that funding limit, when we issue new and retire old. and this also shows the public health -- public health facilities bond. we know we passed the last one in 2008. there are still significant liabilities out at the general hospital campus that we need to address. >> supervisor avalos. >> when was the last time we had issued bond when we hadn't quite retired? bonds at the same level? thank you, chair farrell.

~ where we were actually above our retiring bonds when we issued bonds? >> [speaker not understood]. we went through a period from 2000 to almost 2008 where we did not pass the geo bond. we had a number of geo bonds that failed including [speaker not understood] that i mentioned before. there was one for the war memorial. so, that actually -- so, we had a fair amount before 2000. prior to 2000 is when i think would have been the last time that was happening. certainly when we did the earthquake, the bonds after loma-prieta, i don't know, ben, if you can think of any others prior to -- [multiple voices] >> between 2000, 2008, we were still trying to establish new bonds while we were retiring old ones. we were actually under that level, is that correct? i see nadia shaking her head. >> good afternoon, supervisors. nadia [speaker not understood], office of public finance.

this policy was created in 2006. prior to that we had a much smaller debt program, lower amount and voter approved bond measure. so, we didn't have the need that were identified -- that is currently identified in the 2010 to have such policy wherein which bond [speaker not understood]. so, we still had the same template and [speaker not understood] issuing debt as needed, but we did not have constraints that would require us to maintain a [speaker not understood] threshold. so, this is mainly -- the paying down issuing debt as you retire old bonds is mainly trying to limit us at the 2006 tax rate level. >> that is the recent practice? >> this is a recent practice in 2006 and all our principals mature in june of each year. so, as we sell that, you're

paying down a substantial amount of that. it's a much more managed portfolio [inaudible]. >> is it all possible to look back before the policy was established to see what was done in actuality? was there anything that came close to trying to maintain a level of debt that was consistent and not going above? i'm just -- i'm getting to the point where i look at what we have for the bond for transportation in streets next year, $150 million. it seems like if we're going to voters, it seems like a lower amount of money than we would need to handle a lot of the deferred maintenance that we have on our streets than with muni capital needs and is there consideration to actually go above that? >> i think there are two thing. the 2006 level is a policy driven and it's not binding unless the board or the policy maker decide.

[multiple voices] >> it hasn't been binding -- sorry. it hasn't been beding, but it's been a guideline that's been utilized, right? [speaker not understood] the city really hasn't considered going over it. i think that it's actually worth considering going over whether we decide to or not is a political question. but i think it's something that, you know, should be discussed in placeses like this [inaudible]. >> [speaker not understood]. the second point i was going to make is [speaker not understood] has a 3% assessed valuation limitation. we're about 1%. so, there is enough capacity if you were to go by what is mandated in the charter. it's two different [inaudible]. >> i see. appreciate it. thank you. >> if i could ask a couple quick points. you're saying, supervisor avalos, this is a document where that policy is established and it can be changed every two years by the board of supervisors when you do that. so, this is one of the constraints that's built into the plan this plan happens around. as you note, there's thinking to it but no magic to it.

different constraints can be incorporated because as nadia mentioned we're well below our legally required 3% cap. the only other thing to kind of briefly mention is that with that planning constraint in place, we've been able to pass and sell more general obligation bonds in five years than we did in the previous 25. so, it has yielded a fairly robust five-year period in terms of what it's supported. >> do you know there is a direct correlation, though, between debt issuance and retirement and our success in passing bonds? >> i guess that turns into a political strategy and voter education question about whether -- what you attribute the success of five years of bonds to and to what extent does that constraint help drive voter acceptance of these bonds, and that's not a question for me obviously. >> oh, my other question

related -- today by this resolution, we are approving that we are not going to be issuing new debt beyond what's in the plan or we can come back six months or a year from now and issue the debt above -- >> you set that as a planning target. it's underpinning the plan, but it bach obviously not binding. if the general obligation bond comes forward next year to the board, you legally have the authority to increase that bond [inaudible]. >> and typically, supervisor, we do have those discussions when bonds are coming before voters. we go back and look at it at the cap and so forth. all right, then continue. so, this shows graphically what we were discussing. again, this slide number 17 here, and you can see from the green bar up are the new bonds that we're planning to issue going forward over the next 10 years.

some specifics when we do have -- you know, i mentioned charles [speaker not understood] is here, some other folk if you have questions. this is the specifics of what's in the next few general obligation bonds because we do know we get questions on these periodically. and this for the earthquake safety, the next one up sort of shows what happens in 2010, the bond that did pass. what we're proposing in 2014 and because this is a program, we also have what is proposed in 2021. so, again, fire stations and critical facilities are there. the office of the chief medical examiner is there for 65 million. sfpd station is a critical facility. the largest chunk of that is the crime lab, the friends of sciences unit which includes the crime lab out at mission beah long with the forensic services center at the hall of justice. i'm sawyer, the crime lab is out at hunters point. those are both vulnerable

facilities that have to move and then it also has money for police stations to fix stations. >> so, a question on this slide. again, today we're not approving these line items in the bond, are we? >> that's right, you're not. >> okay. i guess just a flag at the animal shelter for 28 million, a lot of thing that have gotten punted off the list including the fire station at bayview hunters point and police academy retrofit and thing like that that i just -- i'll highlight that i look forward to having those conversations going forward. >> sure. the next bond that we have is again around transportation and street infrastructure. this is the tsip geo bond that we're talking about, update portion of this is the transit effectiveness project which is moving through the e-i-r process and should be cleared in the summer. and that's really to look at some of these questions around

how we can get muni to operate more efficiently. there is also a number of bike path and streetscape improvements that are in here. these are not the only bike path and streetscape improvements in the capital plan, but these are 30 million worth which we do believe would make sense to put in the geo bond. the next category is really public health and this was a bond, again, to follow-up on the work that's happening at the general hospital, the new trauma center. there's a lot of -- we had a strong partner thinkv with ucsf, ucsf is moving forward with looking at building their own structure or constructing their own building on that campus. these buildings, especially 80 90 where we have our urgent care clinic are seismically unsafe. and building 5 where the current hospital is, is unsafe for hospital-type uses. and the plan is to put clinics in there when the new hospital

is open. the debt program is the other area where we have funds that we can spend on capital. similar to geo bonds, we are retiring old ones. this time the policy that was actually formalized by the board last year, this is one that we do have to follow unless a super majority of the board votes otherwise, requires that we only spend 3.5% of the general fund discretionary revenue on debt service. so, this results in about $515 million of cops we can spend the next 10 years. the majority of that is going to be going towards the replacement of jail 3 and 4 atop the hall of justice. as i mentioned in my introduction, there is money to get to court related agencies so we'll be very close to being able to get all of our staff out of the hall of justice and

rebuild that facility. this again is showing the retirement of debt and the issuance of new debt. the only thing i would note here is typically we were challenged in staying below the line. this is this capital plan. we are actually below the line with all these projects, though they're still -- we're still going to be waiting to hear on what the final numbers are for the jail and for -- well, primarily for the jail and the population impact on the jail. so, just -- you know, again, we talk a lot about needs. we wanted to overview some of the achievements and i won't go through this because it's already been a long presentation. but again, a number of different openings and renovations and street repaving, i think if you count the number of cranes in the city, they're all over the place. if you look at the number of programs that are being done, the number of streetscape improvements, the number of

city buildings and structures, it's really been almost a boom time and we do think that's had a big impact on the city's financial condition and the ability to pull out of this, out of the economic downturn very quickly. you know, again, the revenue rate raising measures, i think we've already discussed the geo bond. we should mention, and i think chair farrell raised this earlier, that the fitch improved rating is actually in march, not in february. but we have actually seen very strong ratings across the board and that's for a number of reasons, including, you know, we think being responsible about how we manage our capital program. looking forward, you know, there are a number of challenges that we still have to face and i think this gets to the earlier discussion about mta and muni needs and so forth and how we balance those needs,

how we balance it, the existing buildings and older areas with the new growth. we've had a pretty aggressive schedule for this geo respond so it's going to be tight to move that forward. we're really going to be looking for your leadership and support on those measures to decide what's in the package to get the public education out there and to move forward with these. the other issue is while it's been great, the economy is moving forward, the big climate is becoming more challenging as well. so, that's going to put further pressure on some of the budgets around capital improvements. and with that, i concluded with the presentation. if you have any other questions, me or actually any of the staff here who care to join me, would be happy to answer them. ~ who came to join me. >> okay, commissioner breed. >> thank you. thank you so much for the presentation. first of all, i want to start by asking you to please change

your photograph of station 5. that's an incorrect photo that you have on your presentation. >> okay. >> so, thanks so much -- >> that's one i think we're going to rebuild, right? >> yeah, that's not the right fire station. >> got it. >> that's actually the station that i spent most of my life going to as a kid to get toys for christmas. so, i know that station very well. it's also the station that's in district 5. really proud of that station and the members there. so, just want to make sure they were represented well here today. >> thank you. >> i'm really glad that we're looking at this issue and taking a really hard look at what's necessary in order to maintain our city infrastructure as well as especially our facilities.

not just building, building, building new facilities. but more importantly, we have some amazing assets and i think it's really important to maintain as much of the character of these assets, but also look toward the future and how we do that so that these buildings are safe, they're accessible to those with disabilities, and able to provide the services that they do for the public in the most efficient way. i really appreciate this report and the work that went into it, including some of the details around what's needed moving forward in terms of deferred projects and things of that nature. and it brings me to something that financially is really tiny in the bigger picture, but it's continuing to be on the deferred list, and that is our city's cultural center. not just because i am a former

director of one of the most incredible arts cultural center in the city, but more importantly, the city owns four community cultural centers that play a vital role in preserving the arts and providing a space for affordable community arts, and they are in a really tough situation. and i know that they -- in this particular capital plan -- are on the deferred maintenance list yet again. and i just wanted -- i realize there are some additional funding, creative funding from the mayor's office on disability for a-d-a improvements, to the mission latino cultural center, as well as soma. and i think one of the things that may not have been mentioned in this report is the additional puc money that's coming on board to support

these cultural centers, and also not clear about the specific plans around the bayview opera house. and, so, i know we're being asked to approve this report today, but i think there are some small adjustments that i'd like to see made, and i'd like to see some prioritizing of these cultural centers rather than there being in the deferred maintenance or deferred project category. >> one response. the deferred projects are to do an absolute full renovation, almost completely where you would completely get them and rebuild them which we recognize is needed for nearly all of them. not for all of them. there is funding and it's considerable amount of funding in a pay as you go program to address roofs, hvac and some of

those things, and those would be -- those are really captured under the pay as you go or under the renewal line item in the capital plan. so, it's not the full amount that you would have to redo the building, but we are investing money in those buildings. that's what i'm trying to say. we are in planning to invest money in those buildings, continue to invest money in those buildings, but we have not found a way to do the blip type program that i think we're talking about for the cultural centers. and it is something that we know was actually on the ballot. it was one of those measures that was on the ballot along with the veterans bill that did not pass. it was something we talked to the art commission staff about. for the past six years since we've been doing the capital plan and trying to develop solutions that will work, and i believe the bayview opera is one example where a number of different organizations that have got together and were able

to put together a plan which i believe is pretty much fully funded now to do a lot of the -- they've already done some work, but to finish up some of the significant improvements there. >> and i would just say my biggest concern is that this is like no other example anywhere that i'm familiar with in any part of the united states which is why san francisco is so amazing because we're so unique in providing thai opportunity of critical, and if we lose these facilities, i'm not sure how we can recover from that. so, i just want to make sure that they're prioritized. and again, i know there's a lot of need here, but in the bigger picture, you know, just really some of -- especially i know we're putting a new roof on the latino cultural center, but it was definitely in need of some additional tlc in order to

bring it up to par. so, just wanted to mention that and let you know that i got my eye on making sure it gets done for all these amazing assets. the other thing i wanted to ask about specifically was the yerba buena under the successor agency. >> um-hm. >> the yerba buena gardens renewal program where there is expressed 5.4 million in facility renewal needs for yerba buena gardens over the next 10 years, and about 4.6 million in reserve. and i'm just curious as to the lease -- the leases that exist between the former redevelopment agency and the marriott and other locations in that p