San Francisco officials report progress on $350 million public health and safety bond; COVID-19 drives extra costs

San Francisco public-works officials told a remote committee meeting that the $350 million Public Health and Safety (PHS) bond is largely funded and projects are moving from design into construction, but the COVID-19 pandemic has created added costs and schedule risk.

Joe Chin, public-works program manager for the 2016 Public Health and Safety Bond Program, said the overall bond authorization is $350,000,000, with roughly $272,000,000 allocated to three Department of Public Health components, $58,000,000 to San Francisco Fire Department components, and $20,000,000 to homeless services. Chin said the program has completed three bond sales, with the third and final sale completed in November and reported in the presentation as roughly $126.9 million.

Chin told the committee that several ZSFG (Zuckerberg San Francisco General) Building 5 projects remain active — three completed, five in construction and four in design — and that IT infrastructure approvals have enabled construction starts on some work. The team selected Panko Builders through an RFQ/RFP process to serve as construction manager/general contractor (CMGC) for seven core Building 5 projects; staff said CMGC was chosen because of the complexity of coordinating multiple permitted projects inside an occupied hospital building.

Community health center projects also advanced: Southeast Health Center began construction in May 2020 and Castro Mission recently completed bidding, with a target construction start in January 2021, Chin said. The new ambulance deployment facility is roughly 95% complete and targeted for January 2021 substantial completion. For the homeless services component, Chin listed three work streams — an HSH administrative office at 440 Turk Street, improvements at three city-owned shelters (1001 Polk, 525 Fifth Street and 260 Golden Gate), and design/construction at Mission projects — and said some work was paused earlier in the pandemic because facilities were heavily used but design activity has resumed.

Committee members asked about the financial implications of COVID-19. Chin and other staff said they have seen contractor requests for additional costs due to new safety protocols (sanitizing, additional supervisory staff, sterilizers, personal-protection equipment and social-distancing measures) and noted supply-chain delays for some materials. Several members recommended coordinating claims citywide through the City Attorney to ensure a consistent approach to contractor COVID-related cost and schedule claims; Chin said Public Works is in contact with City Attorney Yadira Taylor on construction-related issues.

Office of Public Finance staff told the committee the city has issued refunding bonds in the past and will continue to monitor market conditions for refinancing opportunities, noting an issuances program in FY20 and planned activity in FY21.

The committee did not take additional formal action on the bond presentation; staff said they will return with further details on financing or refinancing if requested. The committee also heard liaison comments asking governance members to focus oversight on value delivered to voters and to coordinate closely with departmental governance committees.