COHORT CITYSAN FRANCISCO:Funding for Holistic Capital Planning

San Francisco’s Capital Planning Fund

Funding for Holistic Capital Planning

Case Study

Cities are recognizing the value of more intensive early project development, including early revenue feasibility analyses, developing information about long-term O&M and considering resilience aspects.

Finding sources of funding for this early project development is extremely challenging. San Francisco’s Capital Planning Fund—established through the city’s 10-year Capital Plan—is dedicated to project development and pre-bond planning outside the regular General Fund budget. The Fund works by requiring projects that receive early development funds to reimburse them in the first bond sale. That way the funds can be recycled for use on project development for future projects. This is much more effective than SF’s previous practice of relying on General Fund support that would be available only on an ad-hoc basis when budgets happened to be flush or experienced a surplus. Other cities also face similar challenges in identifying funding for early project development; it is not common to have a dedicated source of revenue for this.

With a regular source of revenue, the Capital Planning Fund provides resources for better planning, coordination, and support among projects over a longer time horizon. That means less disagreement among decision-makers when items go forward and greater voter confidence that bonds they are being asked to support will deliver on their promises.

For example, in 2014, the City of San Francisco adopted guidance requiring that vulnerability and adaptation to sea level rise planning be incorporated into every department’s capital plan. These funds can assist agencies in meeting this requirement. San Francisco’s Capital Planning Fund is expecting a balance of $11M in the fund in 2017. These funds will be spent on half a dozen or so projects over the next five years.

The San Francisco Seawall protects the busy waterfront (shown here).
The multi-generational project has used the Capital Planning Fund for project development.