serve those customers have been terminated or completed. that means that the exit fee could appear on a customer's bill for 30 or more years into the future. it is kind of an odd framing to call it an exit fee. people think it is a one-time fee when you do that but it is actually ongoing. the p.u.c., the san francisco p.u.c. developed and launched our clean power s.f. program guided by some specific program goals. that's were developed over time with the input of the mayor, the board of supervisors, and our own commission. these programs lead with affordability, making sure that rates are competitive and that services are reliable to provide cleaner electricity alternatives that deliver more renewable energy and de- carbonized the city's energy supply by 2030 and invest in the city's electric supply.

those revenues are coming in locally to new renewable and demand-side projects. such as measures to reduce energy use of homes and businesses that create new clean energy jobs within san francisco and the bay area, and then finally we need to balance those goals and ensure we are providing long-term rate and financial stability for the program. in balancing these goals, we are leading with affordability. our default product, evergreen product described here is priced competitively with standard offering, and it is cleaner with at least 40% renewable energy. it is a better product for a comparable price, and we also have a premium product, our super green product. customers prioritizing that renewable project can choose to pay a slight premium for our 100% renewable energy project. it cost the average residential customer in san francisco about four dollars more per month with

their electric service than the green product. clean power s.f. is a choice program so customers can also opt out of the program and take their electricity supply away. we begin serving customers under the clean power s.f. program in may of 2016 when we enrolled commercial customers and supervisory districts five and eight, and commercial and residential customers throughout the city that have signed up. it will be approximately 800 accounts in all. we have enrolled about 117,000 accounts citywide, were almost 30% of the potential clean power s.f. accounts in the city. the p.u.c. has been busy for his next major enrolment and they will be enrolling about 280,000 mostly residential accounts in april. with this enrolment, we will have enrolled all but the largest electricity accounts in

the city and we will be following up with those electricity customers individually over the course of calendar year 2019. after the upcoming april enrolment, we estimate the number of active customers being served by clean power s.f. that will be around 365,000. as part of our phasing policy and decision-making around 12 enrolled additional customers, the p.u.c. established it would not automatically enrolled customers unless we projected that our rates would be at or below pg&e at the time of enrolment after accounting for pg&e's exit fees. that brings us to the topic of today's hearing. clean power s.f. rates, and pg nd exit fees. the exit fee is a method this cpuc uses to ensure those unavoidable costs are shared with c.c.a. customers. the p.u.c. took a rate action.

the san francisco p.u.c. took a rate action that is before you today because it pg nd was forecasting that it's rates would be changing early this year, specifically, their exit fees are expected to increase for commercial customers, and decrease for commercial customers. the generation rates are projected for all customers. the results, were we to take no action is that clean power s.f. customer cost would be higher than pg nd service. that is why we are here with you today recommending that you take the action to ensure that our customers have competitive rates with pg nd and are protected from these exit fees that they implemented. influencing these changes is the decision of the california p.u.c., which change the methodology for calculating fees in october of 2018.

the most recent decision was recent -- was really front of mind for san francisco and many other communities that operate or are planning to operate c.c.a. this past fall, a some of you may recall, in september, all members of the san francisco board of supervisors signed onto a letter that was prepared by the c.c.a. association requesting that the california p.u.c. adopt a balanced decision on the new exit fee methodology. >> i'm sorry to break in, there are supervisors who wanted to ask a question. supervisor ronan and supervisor peskin, and his supervisor walton wouldn't mind, i want you to ask a question first pick i know you are first on the roster of supervisor peskin. are you okay with that supervisor walton? >> yes. >> thank you so much. i just had a question through the chair, miss hale, i don't know if i fully understand this.

if there exit fee is expected to decrease for residential customers, why with the rates for all customers be going up, not just for commercial customers? >> it is really to the methods that they are choosing to assign costs for the ones that they are incurring. and the action that the california p.u.c. is taking us what we are reacting to in making our proposal to you. >> i see. even though this is a first time that i've realized that the cost of the exit fee for residential customers is going down, as is the generation rate, and yet because the exit fee is going up for commercial customers, and their cost-sharing methods, they are increasing rates for residential customers as well?

>> yes. i thank you get the gist. is a number of components that are moving, and is different --dash it is different for the different rate classes. >> this is a whole way that residential customers are being punished by pg andy. >> i believe general manager kelly might have an answer to the first question. okay. the exit fee only applies to the folks who left, so that will increase, and that means we have to absorb it, or if it decreases , it is a good thing, however the generation cost goes down, and so we have to make sure that hours go down as well, our price so we can absorb the exit fee.

so i think the main theme is the fee only applies to us, and so although it is higher may go down, we still have to absorb that fee. that is why we've been fighting to make sure that fee is not higher because we have to absorb that cost. it doesn't apply to pg and e., the exit fee. >> at the end of the day, customers pay bills, they don't pay the individual fees, they are just looking at the bottom line. we are trying to make sure as we do our rate making analysis and recommendations to you and to our commission, we take that into account, and look at the bill results of these changes. >> okay. do you have more to your presentation? >> thank you. >> please continue. >> as you are understanding, these are controversial decisions of the california p.u.c. is making. the board participated in outreach with the letter that i

referenced. the mayors of san francisco,, oakland and san jose also jointly submitted a letter to the california p.u.c., despite our request for change to the new exit fee methodology, they voted out the decision unanimously. that brings us to where we are today. the rate action was taken in december by our commission to improve the prospects for our customers to see competitive reliable service. it was designed to ensure that the clean power s.f. program would be able to continue offering that affordable service to both existing, and future customers that who were planning to enrolled in april. [please stand by]

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zbls by generous, i don't -- i should say -- i probably shouldn't use that word. we have a credit facility that has available capacity, that can help us, whether a situation -- a situation like that. so we do have tools in front of us available to us that we planned for for situations like this, and then, we're also working with the controller's office on what our options could be given the city's pool of funds and the various different draws on it and the capacity there. so we have some internal

options that we're looking at. we also have some options that would involve our state regulators and legislators. >> so it is scary when we're talking about our reserves and our municipality, and we're going to generate the revenue, and it's going to pass through pg&e. i'm wondering at the state level if this is where we need to push our representatives at the state to change some legislation so we're not required to give this to pg&e when they're going through this process and how quickly that can happen. when we're talking about using our reserves, and when we're talking about using our own resources -- [please stand by].

>> san francisco's in a position where we're pretty well positioned to take on that responsibility of billing since we already do billing functions for all of our utility and wastewater customers. not every communities that participate in agregation are as well positioned, so we might want to talk about requirements to do it yourself, but absolutely, yeah, we're on the same page. let's fix this going forward. >> president yee: okay. supervisor ronen, do you still have comments? >> supervisor ronen: yes, thank you. >> president yee: okay. >> supervisor ronen: i just wanted to just take a minute to think about the bigger picture here and really piggyback on supervisor peskin's comments about the fact that this is a real opportunity for us to take cleanpowersf to the next level and why i think that's so

important. and there's basically three major reasons for that. the first is for the first time, you know, in a long time, and maybe for the first time, this state is waking up to the way that pg&e has been operating as a company and is no longer going to allow this corporation to run roughshod over our communities. and i mean even the editorial in the chronicle shows willingness to standup to this company that we haven't seen in the past, and i think that's really exciting. and i think that comes from the fact that, you know, these policies, whether it's that -- the games with the exit fees, which are the latest method

that pg&e is trying to stop the fair competition that cleanpowersf provides to its product that it offers to, you know, the -- the games that they've been playing with the city of san francisco that have caused all of us on the board of supervisors to be fed up with the delays they've caused to essential city projects like parks and navigation centers and affordability projects and swimming pools and museum and police stations. i mean, it's been shocking to see the road blocks that they've put in place, to san bruno explosion to the devastating fires that we're now feeling might be a part of our regular lives here in california. it's time that this state and actors at all levels standup to this corporation, and that's

finally happening. and i think we need to, as a leader in that, and as san francisco has been in the past, we need toic at th take that t next level. so that's number one. number two, we all know that climate change, and unlike, you know, some of our leaders on the federal level, i think we have unanimous level here at the local level is the biggest threat to human beings that we're going to be facing in the decades to come. and when we're talking about solutions to climate change, we have to be thinking at initiatives that are bigger and bould bolder that we've really thought heretofore. while we're really good on this board of supervisors really good on smaller policies like banning plastic straws and hastening the process for new electric vehicle chargers, all

of which i completely support and are very important, this is not the level at which we need to be acting to really make an impact around climate change. the one program we have in the city that is big enough and bold enough to make that level of impact that we need to make is cleanpowersf, and we are doing -- the p.u.c. is doing a great job in running this program, but we really need to take it to the next level, and that next level is a complete buildout so we are providing 100% renewable energy to all of our customers. we're providing 100% clean energy, but not all of it is renewable, and we've got to get to that next level. but now, we not only have an opportunity to get to that next level and produce 100% renewable energy, but produce and transmit it to our customers, which is something that supervisor peskin and i have talked about getting started this year, but i don't

think we imagined at the beginning of those discussions that we would perhaps have an opportunity to move quicker than we had ever imagined. and i think we need to take advantage of this opportunity precisely because the crisis of climate change is a crisis and one that we need to be acting to -- to impact at levels that we haven't done so in the past, and this provides that opportunity. and then finally, i am a believer that when a corporation has a profit motive as its ultimate goal in providing a product to customers that is so essential for our everyday life, that we often see disasters like we've seen out of pg&e. when profit motive is the ultimate motive then public safety comes second, then

reliability comes second, then cost comes second. if we as a city are able to take over this responsibility as a municipality, profit motive will not be our ultimate goal, our ultimate goal will be providing a clean product to our customers in a reliable way that controls costs, and that provides a public good, like utilities should be run. and that is why i think it is urgent that san francisco takes over -- has a complete divorce from pg&e as quickly as possible and takes over operation of this utility. we have shown our responsible -- or let me be more specific. under the incredible leadership of harlan kelly, barbara hale and juliet lewis, we have shown that we can provide this service and do it in an

incredible way, and now, we need to agree it. and i'm looking forward to taking some leadership to make that happen. so again, i just want to end by saying we'll be watching closely how this bankruptcy proceeding goes forward. i'm looking forward to working with my colleagues and the city attorney's office and the mayor office in making sure that we're protecting cleanpowersf, that we're protecting our customers here in san francisco, and at the same time, that we are pushing forward, you know, the real next stage of cleanpowersf, the next two stages, where we're not only building out the infrastructure to provide renewable -- 100% renewable product, but that we're also taking over the distribution of that product. >> president yee: okay. supervisor safai? >> supervisor safai: thank you, president yee.

i just had a question for miss maybe hale. i know we let the effort here on this board to pass prop a and give you bonding authority. i just want to talk to the chair about the possibility -- i believe you have been asked to put together an analysis, but maybe you can talk a little bit about this. i think it would be the will of this board to understand what the ultimate acquisition cost of the service here in the city and county of san francisco, so facilitate the expansion of and a more robust power system here in san francisco, so maybe you can talk about what the steps would be to analyze the cost of that infrastructure. i don't think we could have anticipated the circumstances we could be in, but potentially, if it were the will of this mayor and the board to move forward to

acquire the distribution and other assets of pg&e to achieve a more robust goal of renewable energy and energy independence in the city and county of san francisco, so i wanted to give you the opportunity to talk about that and shed some light onto that, either yourself or director hale. >> maybe i can start it, and barbara, you can chime in. so when we approved prop a, it would give the p.u.c. the ability to debt finance as we look at expanding our operations and mainly we're looking at creating our distribution because one thing we realize is the cost of pg&e distributing our power became very costly, and that's where we felt that we can actually build our own facility and then have a rate payers pay and actually be cheaper for a rate payer. so we looked at trying to build

our own distribution system out. and so that was really the purpose of proposition a. but now, given the fact that the wildfires and the cost of distribution because pg&e's going to have to spend so much money in their distribution, it's going to become really expensive for the distribution costs, and i think that is one of the things that we're looking at is how can we, you know, really protect our rate payers in san francisco. and one way is to actually purchase or distribution system in san francisco so that we can maintain it and not have the burden of pay for all the distribution of country where the fires occur and all that. so that he as why it makes sense to invest in the distribution system. we know that the distribution

system is not in a state of good repair, and if we look at the what the value is, we would have to discount it based on that. so i think the first thing we would want to do is kind of assess what the distribution costs would be by kind of driving around and see what that would entail. do you want to -- >> supervisor safai: and before you jump in, director hale, through the chair, i just wanted to have a question on that. so is it the plan of the p.u.c., and i believe it's the will of that body to understand what the cost would be to acquire that distribution system. and then two, we do have the ability through proposition a -- >> yes. >> supervisor safai: -- we could potentially go to the voters to ask for acquisition cost, which i imagine would be in the millions of dollars regardless of the repair of the current distribution system. >> yeah. so the whole way it would work is we would evaluate the cost of the distribution, and then, if we -- you know, depending on how we obtain it, if we have an

agreement -- let's say we have an agreement with pg&e to purchase it, what -- the way that we would pay for it would be through our rate payers because the cost of purchasing it against the cost that pg&e distribution fees will be much higher than what we would offer, that delta will help us actually pay for the up-front money. >> supervisor safai: say the last part again. >> do you want to try to explain? >> so just a couple -- a couple of preliminary points, and then i'll hit what you're asking about. our efforts -- you're alluding to mayor breed's letter, asking us to, over the next three months, prepare a preliminary report. our efforts associated with that will include assessing the value of the system as g.m.

kelly mentioned, but we also need to do the financial assessment work, looking at, you know, knowing how much the -- evaluating how much the repairs of the system would be, how much the cost of the operating would be, better undering what the revenue stream will be, would the revenue cover those costs. g.m. kelly is saying the -- knowing our costs of operating the system won't include the profit component, we know we will have a delta where our costs for operating and managing the system are lower costs for financing, acquisiti acquisition of the system or capital improvements of the system will probably belower than pg&e's. we anticipate we would then be able to repay whatever the up-front costs are for purchasing the system through the bonding authority and repay any, you know, immediate repair

of that system that we prioritize after we've assessed it together with the consulting resources we'd need to perform that work. the other component of this, as well, that we would bring to the table is an assessment of the equity programming that we can incorporate into our -- our operation of the utility service which would be another thing we would bring to the table different from a pg&e operated system. i think you heard you say, supervisor, that we would then have to go back to the voters for that authority. and no, we don't need to go back to the voters. i just want to make that clear. >> supervisor safai: no, i did not mean to say that. >> okay. good. prop a gave us the authority to come back to you and go through the revenue bond authority process to -- you know, to act on the decision that's arrived at. >> supervisor safai: so through the chair, to be clear, you are in the process of putting together an assessment

and will come back and give a report and an assessment to the mayor in three months about what the overall cost of the acquisition, the distribution will be. >> a preliminary report. >> supervisor safai: yes, and then, the second part is how does the bankruptcy play into the conversation? do they have to be willing to sell those assets, and does the bankruptcy affect their decision or compel them to sell certain assets in their portfolio? >> well, you're probably starting into territory that maybe is more appropriately addressed with legal counsel, but -- >> supervisor safai: we can talk in general terms. >> -- but the -- but the -- you know, we as a city have the right to provide municipal electric service, so that's not a question. how the bankruptcy court could influence pg&e's ability to sit

down at the table with us, you know, part of their plan of reorganization that they would file with the bankruptcy court could include, they've indicated already as i've read in the press, that they're planning on including sale of assesses, perhaps even the whole gas part of their system, i've read, is something that they're evaluating, along with the headquarter building here in san francisco. so they're clearly looking at assets. they're signaling that they're looking for potential buyers, and i think it's appropriate for us to, given the direction we've seen from mayor breed and the guidance we've gotten from you in this room before, to be expressing our interest in understanding what our role could be in acquiring assets, and that that could help pg&e then with that additional cash meet the other obligations they have as a result of their operations and the liabilities they've assumed with the -- the

various fires and such. >> supervisor safai: president yee, and i'm going to ask one last question. i know supervisor fewer has been waiting. this'll be my last one. >> president yee: go ahead. >> supervisor safai: i just wanted to ask the city attorney through the chair, is there anything that allows us to have a first right of refusal on these assets within the city and county of san francisco? and i'm sure you don't know that answer off the top of your head, but it would be helpful to have that answer as we proceed because i imagine that maybe the founders and the folks that negotiated that act with regard to hetch hetchy, the natural resources in yosemite as well as creation of public power might have anticipated that the city at some point would have the opportunity to have some ownership. so if that's something you could follow back up with us on, that would be helpful. thank you. >> president yee: the deputy city attorney is nodding his head.

>> supervisor safai: yes. >> president yee: which means yes. supervisor fewer? >> supervisor fewer: yes. i just wanted to add this in since we're talking about independence and having our own independence as the city and county of san francisco to have our own power, that this is one part of the conversation. i just want to remind folks if we want to be truly independent in providing energy, clean energy to the residents of san francisco, we need to really think about a green new deal -- a local version of a green new deal, and that is really about building our own resources for renewable energy on our own land, our publicly-owned land outside of san francisco. so while we're talking about the distribution today, i realize. but as long as we will have to buy power, renewable and clean energy again and again and again, and compete with other jurisdictions, we will always

be dependent on another source. so i'm just going to urmg everyone on the board to keep that in mind and to push back on what some of the supervisors said today about just the local buildout here is not being able to sign people up for clean energy, but it's being independent on our own terms, having our own sources of energy, so we will be completely independent and be able to offer services at a cost to everybody that's reasonable. until we do that, i feel we will be always dependent on another source in order to deliver services to residents. i just want to put that in the minds of everyone here that this is one part of it. but i would also like to have a conversation of a local green new deal here for san francisco. thank you. >> president yee: thank you. i don't see any other names on the roster.

right now, i'd like to invite anybody from the public to make public comments, and if you -- on this item, and you have two minutes. >> supervisors, i have been paying careful attention to what you can do. before that, let's go to our central subway. we started with 600 million, and now it costs over $1.2 billion. let us look at a millennium tower that is sinking 22 inches and tilting 18 inches northwest. anyone can speak in generalities. this city and county of san francisco has no comprehension whatsoever about this bankruptcy. the only comprehension and advice that can be given to you

supervisors is by legal counsel, superior legal counsel. pg&e will not sell nor make any deals with the sfpuc at a discount. now having said that, i do not believe sfpuc has the ability to maintain the distribution at a very high level. and in conclusion, let me tell you, you haven't read the ryker act, so don't call it the ryker act. the ryker act allowed us to give pfree energy to public housing. what happened to that? this city and pg&e wanted to make the poor people pay for that electricity. i have 18 seconds left, and i'll turn it back to you, but i

am horrified at some of the generalities that have been spoken in this public building. >> president yee: okay. any other public comment? seeing no other public comment, public comment is now closed. [ gavel ]. >> president yee: i don't see anybody else -- any other colleagues on the rosters. it appears that we are interested -- we are not interested in rejecting these rates, so this hearing can now be filed. can i have a motion for this -- to file this matter? >> so moved. >> president yee: supervisor -- providsupervisor peskin, and seconded by supervisor safai. without objection, this hearing has been heared ad and is now filed. we will now reconvene as the board of supervisors. madam clerk, call the next

item. [agenda item read] . >> president yee: okay. thank you. the purpose -- i want to say that the purpose of this hearing is to hear testimony to form a city and county special tax district and improvement area and a future annexation area in the central soma area. in addition to executing the implementation program as adopted by the central soma

area plans pursuant to the board of supervisors resolution of intention adopted on november 13, 2018. details of the covered area are in the file. without objection, the public testimony will be as follows. we will first hear from the district supervisor. we will then hear from all speakers in support of -- of the special tax district, giving two minutes apiece, and lastly, we will hear from all speakers in oppositions to the special tax district. okay. seeing no objection, we will proceed as described, and this hearing is now open. supervisor haney, would you like to provide any comments? >> supervisor haney: yes, thank you, president yee. first of all, thank you to my colleagues for all of the time that you all have invested into this very complicated and large plan.

i especially want to recognize former supervisor kim and her staff for all of the work that they put into this. took a tremendous amount of time, as you know, over many years. i think dozens and dozens of amendments, and it was really just a momentous effort on their part, so i want to recognize supervisor kim and her leadership and her staff. i want to thank the planning department staff, lisa and joshua, for their work. you're going to hear from lisa in a minute. my goal will be to continue the momentum that we've had with this plan and to work collaboratively with everyone involved to see it through. i know that the staff and community members have worked tirelessly on this for years and have been thoughtful and intentional about the impact that this plan will have on the future of this city. as we look at the investments that need to be made in central soma, i want to make sure that

we're working in a partnership, that we're hearing the voices of community members, and that those most directly impacted by this project continue to be at the center. i am committed to being motivated about impacting the development, and investing in critical infrastructure and community needs. our presenters today will be lisa chen from the planning department and ana van degna from the office of public finance. what we're going to hear today is specifically related to the central soma special tax district, which will be the largest new funding source coming to our city. it will raise over $350 million in the first 25 years and provide continued funding for facilities and services for many additional years into the future. the district will allow us to fund a diverse package of benefits totaling over $2 billion and will go directly to funding transit and street at

the point improvements, parks and recreation centers, environmental table and a range of social services and community-based organizations. this in addition to the significant revenues coming from other sources that will fund affordable housing. adopting a special tax district will help us fulfill our commitment to the community and the city and ensure that we have the infrastructure and services in place to meet the demands generated by new growth. and most importantly to protect existing residents and make sure that soma continues to be a vibrant and diverse neighborhood. i would also like to thank the other staff who are on hand for questions, jamie k. rube in, mark blake, chris lynch. their technical amendments that i think everyone has received, and i think after public comment, i'll be proposing these amendments that are in front of you. thank you. >> president yee: okay. so thank you.

so are there any comments by city staff? planning staff, lisa chen? >> yes, we do have a presentation. get the slides. thank you, board president. thank you, supervisor haney for those comments. good afternoon, supervisors. and happy new year. i'm lisa chen from the planning department, and i'm here to present on the central soma new tax district. today's presentation will include a brief refresher on the central soma plan benefits package and details on the proposed central soma tax district. here are the items that are before you today. there is the approval of resolution and formation to establish the central soma special tax district.

there is the approval of a resolution determining necessity to incur bonded indebtedness in an amount not to exceed $5.3 billion and the introduction of an ordinance levying additional taxes which would be adopted at the next board meeting. this is in error because you don't have a board meeting next week for the holiday. it's going to be on january 29. this slide recaps the other related legislation for the central soma area plan and the special tax district that the board and mayor have already acted on. on november 21 of last year, the mayor approved the resolutions of intent to establish the central soma special tax district and to incur bonded indebtedness. on december 7 and 12, the various components to establish the central soma plan were adopted. this package included the various legislative amendments that you see here, and it also included the adoption by reference of the implementation program and benefits program which outline how all of the planned funding sources,

including the special tax, will be leveraged to incur public benefits. the fact that we're creating capacity for such a large amount of new growth in this area means that we'll be generating significant funding to serve both existing and new inhabitants of the neighborhood. we have a three prong approach to get there which is embedded in the plan and all the requirements. so it means changing the zoning to accommodate the significant demand for housing and jobs, leveraging that growth to fund public benefits through fees, taxes, and other requirements, and in so doing, building upon and enhansing what's already great about soma. many of you have already seen this visualization. this 3-d model shows existing conditions. here's the area plan at buildout, which we anticipate as being roughly 25 years. the plan includes to create space for roughly 25,000 new

jobs and 8800 housing units, totaling about 16 million square feet of development. in total, this new development will bring in roughly $2.2 billion for public benefits over the life of the plan. comprised of the funding sources listed here. as supervisor haney mentioned, the c.f.d. represents the single largest new source of funding that would accrue to the city. this shows the same public benefits package, but by category, with a column specifying which benefits would be funded by the c.f.d. this is a much broader range of benefits than any area the city has adopted. this public benefits can be amended in the future subject to board approval. the next part of the presentation will focus on the mechanics of the tax before you for adoption today.

here is the future annexation map for the special tax district. the proposed special tax district is structured as an all annexation district, and what that means is that new development projects that are subject to the tax will annex into the distribute before those buildings are occupied. you'll notice that this map includes a boundary that is slightly larger than the plan area, and it includes some parcels in the downtown c-3 districts as far as market street. this expanded plan was adopted during the process -- however, the adopted central soma plan only requires annexation of properties in the plan area, and if the city chooses to levy the tax on these other parcels, it would need to do so through separate legislation, a d.a., or some other agreement. within the central soma plan area, the tax would apply primarily to large condos and

nonresidential projects. 100% affordable housing projects, b.m.r. units, rental housing units, and p.d.r. would all be exempt. annexation would be required before the first certificate of occupancy of the project, and the tax levy would commence the next fiscal year. one of the great benefits of a tax is that it provides the city with predictable, ongoing funding in contrast with impact fees which accrue to the city according to development cycles. this allows us to issue bonds and accelerate the provision of public benefits to better ensure that we have the infrastructure and services in play to support new growth. critically because of this bonding capacity, the city would have the right to sell or foreclose on properties that fail to pay the tax. this is a stopgap measure to ensure the city limits its financial risk. here are the special tax rates starting in fiscal year 2018-19 which we're informed by financial feasibility analysis on the amount of fees and taxes

that new development projects can pay. every parcel that is getting upzoned through the plan is assigned a fee tier according to how much of an increase in development potential they receive through the plan. the first table shows the rate plan through the first 99 years of the tax when it's considered a facilities tax, which means it can be spent on facilities as well as services, including maintenance. after 99 years, the tax will drop by approximately 75% and become a services only tax and will no longer be spent on capital projects. here is a map of the c-tiers which corresponds where most of the growth of the plan area will be concentrated. the special tax rates will be escalated over time, in years 1 through 99, in facilities tax, the base rate will increase by a predictable 2% annually. once a project annexes into the district, that project's

individual rate will escalate by 4% annually for the first 25 years and then drop back to 2% per year thereafter. residential projects would continue to escalate at 2% per year as capped by state law. after the entire tax district transitions to services only after year 99, the rate will drop by 75%, as i mentioned, and will be escalated by either the consumer price index or by 5%, whichever is loier. i'm now going to hand the presentation over to the director of public finance to describe how the city will manage these revenues going forward. >> good afternoon. as lisa indicated, the facilities tax revenues can be pledged to support bonds to accelerate funding. the ultimate bond issuance schedule will be determined based on a number of factors, but we estimate that the first bond issuance could occur between 2020 and 20 -- i'm

sorry, 2023 and 2027. in order for bonds to be issued, though, there needs to be sufficient tax revenues and there also would be required a subsequent approval by the board. in the legislation before you today, we're proposing a not-to-exceed par amount of 5.3 billion. as a reminder, this is an aggregate cap over the 99-year term of the facilities tax. under the melrose community facilities district act, we're required to establish this cap at the time the district is emergency room informed, but again, before any issuance of bonds, we would come back before the board on that issuance. the public benefits package that was adopted by the board in december assumes that bonds will be issued every five years during plan buildout. as lisa touched upon earlier, this table identifies the anticipated cost of facilities and services to be funded with

the facilities tax during plan buildout, which is estimated to be 25 years. we know that the area will continue to have ongoing capital and maintenance needs, including, but not limited, to sea level rise adaptation. the funding for these needs will be decided through the capital planning process that lisa will describe shortly. the city would have the option to lower tax rates in the future should it decide that funding is no longer needed. the legislation before you authorizes two different taxes. as lisa mentioned, the first we covered, the facilities tax. the second tax is a tax for services only. it begins in year 100, after the facilities tax ends. it's difficult to predict the amount of annual tax revenues this -- so far in the future, as in year 100, that will be based on