Thursday, June 30, 2016
[San Francisco] SF civil grand jury warns of costly maintenance backlog
A new report is calling San Francisco’s $1.3 billion maintenance backlog a “slow motion train wreck,” but city officials say the numbers in the report don’t tell the whole story of how the work is managed.
A civil grand jury report released this week warns that a failure to make maintaining city assets a priority will drive maintenance costs up by more than $800 million unless addressed. The report notes that this year, $11.3 million — or 0.2 percent of the city’s general fund — will go to routine maintenance like cleaning windows and filling potholes.
But city officials point out that money also comes from other sources, such as fees and bonds. Another $26.7 million goes to what the city calls “renewals,” like replacing a roof every 30 years. About $13.8 million funnels into right-of-way projects, like repairing bridges, tunnels and guardrails. Add another $48.5 million for street resurfacing, and more than $30 million for emergency repairs and ADA compliance.
“So you add all of those line items and bonds together, and it’s somewhere around $128 million,” said Brian Strong, director of capital planning for the city and county. “We inherited a backlog from a long period where we invested little. We are on a trajectory that is better than anything I’ve seen since I’ve been here.”
And that report? It’s probably not as straightforward as it seems, Strong said.
Grand jury response
“I hope they are right, and I’m sure their numbers are correct,” civil grand jury member John Hoskins, who helped write the report, said in response. “The problem is the city doesn’t report it that way, so the public doesn’t know how much they are spending. Maybe they are doing a wonderful job. They should put their numbers together and show them to us.”
The civil grand jury report — and an increased city focus on maintenance — stemmed from a 2005 report by SPUR, a nonprofit that researches planning and governance in the city. It was the genesis of San Francisco’s 10-year, 2006-15 capital plan, which focused on maintaining the city’s assets.
A second capital plan for 2016-25 will funnel more than $1.6 billion into renewable maintenance. The plan is updated every two years.
“The city has taken big steps forward in the last decade, mainly because of the 10-year capital plan,” said City Controller Ben Rosenfield. “It frames general obligation bonds and budget decisions by identifying where the city should spend to maintain its assets. Although the city has made progress, it is still short of where it should be.”
That’s because maintenance must compete for general fund dollars against social services like housing the homeless, supporting the elderly and reducing HIV infections. Repairing roofs and seismically retrofitting buildings just can’t compete. That’s where the report is right, city officials agree.
The best practice in many cities, like San Jose, is to spend 2 percent on what the current replacement value of infrastructure is, the report says. So a $1,000 handrail would get $20 annually for repairs. But San Francisco uses a complicated algorithm to calculate the percentage.
That percentage is rarely used, though. Instead, the city tries to grow maintenance funding by 10 percent annually. With each increase, the plan is to “attack and address the backlogs,” Strong said. About $128 million is projected for fiscal year 2016-17, up from $50 million in year 2006-07.
‘Facility resource renewal’
Maintenance is also tracked using something called a “facility resource renewal” model. Essentially, a program tracks when a piece of infrastructure will need upgrades and helps budget for them. For example, the brand-new Public Safety Building will need a new camera system in 10 years. And in 20 years? A new roof. After 30 years, a new air conditioning system.
“It gives us a more accurate picture of what a building like that is going to cost over its life,” Strong said.
Yet those dollars are often spread thin because San Francisco is both a city and a county, which means it has more facilities to support than others in California. Maintenance money goes to city agencies, like Public Works, as well as hospitals, jails and fire stations.
Other departments, like the airport and the Recreation and Park Department, are considered “enterprise” departments. They set their own maintenance budgets because they raise and spend their own money. About eight times as much money goes to repairs in these departments compared with general fund departments.
All things considered, the city is generally doing a good job at maintaining its assets, said City Administrator Naomi Kelly.
“The report complements what we are already doing and what we know we need to do better,” she said. “Our capital plan highlights what is going on and forces us to prioritize funding. It starts conversations and gives us a blueprint of where we need to go next.”
June 28, 2016
By Lizzie Johnson