Budget panel forwards ordinance to issue up to $61.4 million in certificates of participation for repairs and street resurfacing

The San Francisco Budget and Finance Committee voted Sept. 11 to forward an ordinance authorizing the city to issue certificates of participation not to exceed approximately $61.4 million to finance and refinance capital improvement projects, including critical building repairs and street resurfacing.

Office of Resilience and Capital Planning staff told the committee the Critical Repairs program is in its fourth year and that COPs have been used to maintain funding after cuts to the general fund capital budget. Olivia Chen said this year’s allocation includes "over 23,000,000 to street repair projects," while the program remains ‘‘about $8,000,000 short of full funding." The Budget and Legislative Analyst’s summary put critical repair funding at about $21,000,000 and street resurfacing at $23,900,000.

Grant Carson of the Office of Public Finance presented the financing structure and an estimated sources-and‑uses breakdown: roughly $56.8 million in COP proceeds, $5.5 million in capitalized interest, $4.8 million for debt‑service reserves, about $1.4 million in transaction expenses and a market‑uncertainty reserve of roughly $4.6 million, bringing the maximum not‑to‑exceed figure to about $61,395,000. Carson said the team sketched a 25‑year term and an average annual debt service in the neighborhood of $4.8 million. He also outlined an anticipated schedule: Capital Planning Committee endorsement (July 22), Budget & Finance Committee review (Sept. 11), and two Board readings (Sept. 17 and Sept. 24).

Committee discussion focused on interaction with the $390 million ballot bond voters will consider this November. Chair Supervisor Connie Chan asked whether the bond would reduce the need for COPs on routine resurfacing. Brian Strong of Capital Planning said the ballot measure funds streetscape and pedestrian safety projects, not the standard resurfacing program, and said the city will update its 10‑year capital plan in the coming budget cycle to reassess cash vs. COP capacity. Strong estimated the city’s contribution to resurfacing at roughly $30 million and a shortfall of about $6–7 million.

The Budget and Legislative Analyst noted this COP debt will be paid from the general fund and reiterated the policy question of using debt to backfill capital budget cuts. The analyst also pointed out that next year the total street resurfacing funding is projected to fall from $70 million to $46.9 million, largely because no general fund or COP debt is assumed in next year’s budget.

Chair Chan moved to forward the ordinance to the full Board with a positive recommendation; the committee recorded affirmative roll‑call votes as recorded in the meeting transcript and the motion passed.

The ordinance references prior COP authorization (Ordinance No. 101‑23, adopted June 2, 2023). If the Board of Supervisors approves the item at its readings, the first tranche of certificates could be issued as early as next year.