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City'wide capital plan update shows $25 billion need; staff warn of deferred renewal backlog
Summary
Capital planning director Brian Strong told the committee the city's 10-year capital program totals about $25 billion and that state-of-good-repair needs are being deferred; staff highlighted the crime lab and jail replacement programs, geo-bonding and a $64 million pay-as-you-go recommendation for the coming cycle.
Brian Strong, director of capital planning, briefed the Budget and Finance Committee on the city's biannual two-year capital plan update and emphasized a widening gap between identified needs and available funding.
"The capital plan is about a $25,000,000,000 program," Strong said, noting the plan includes approximately $5 billion of general fund investments and roughly $11.4 billion in enterprise department projects. He said state-of-good-repair and renewal needs remain substantial, with the plan funding about $1.4 billion while deferring a little over $1.0 billion of work.
Strong highlighted several major projects: planning for a crime lab (with an estimated construction start in spring 2015 contingent on passage of an earthquake safety bond), replacement and phased development for Jails 3 and 4 near the Hall of Justice, an estimated $840 million Terminal 1 reconstruction at the airport, and a long-term sewer-system improvement program. He also cited completed and near-complete projects such as branch libraries and Moscone improvements.
Staff warned the committee that pay-as-you-go renewal funding is well below industry recommendations. Strong said industry standards recommend reinvesting 1.5% to 2% of a building's replacement value annually; the plan recommends roughly 0.6% and the city currently funds closer to 0.02% in some categories, creating a backlog that risks emergency repairs and higher future costs.
Strong said the plan recommends a pay-as-you-go program around $64 million for the coming cycle and that $126 million in capital requests were received for 2013; he urged the committee to prioritize renewal projects and consider financing options including geo bonds and revenue bonds for major program elements.
The committee continued the item to the call of the chair. Staff indicated they would return with prioritized lists for committee review ahead of bond sales and capital-planning actions.
What happens next: Capital Planning will present prioritized projects and additional details on funding strategies as the budget and bond-sales schedule advance.
