presents
To protect the waterfront, BART and Muni, buildings, historic piers, and roads from earthquakes, flooding and rising seas by: repairing the 100 year old Embarcadero Seawall; strengthening the Embarcadero; and fortifying transit infrastructure and utilities serving residents and businesses; shall the city issue $425,000,000 in bonds, with a duration up to 30 years from the time of issuance, an estimated tax rate of $0.013/$100 of assessed property value, and estimated annual revenues of up to $40,000,000, with citizen oversight and regular audits?
Shall the City and County of San Francisco be authorized to issue up to $425 million in bonds to repair and reinforce the Embarcadero Seawall and Embarcadero infrastructure and utilities for earthquake and flood protection?
Note: This Pro/Con information is also available in Spanish.
Largely invisible, the Embarcadero Seawall acts as a retaining wall against the ocean for three miles along the waterfront, from Fisherman's Wharf to Mission Bay (AT&T Park). It was constructed more than 100 years ago by dredging a trench through the mud and filling it with rock and rubble. A wall was built on top of the rock, and the marshland behind it filled. This Seawall thus helped facilitate over 500 acres of new land between San Francisco Bay and First Street. Today, the Seawall supports San Francisco's maritime activities, piers, wharves, and local businesses such as restaurants and tourist destinations, which bring an estimated 24 million people to the waterfront each year. It helps protect key utility networks and infrastructure, including the Bay Area Rapid Transit (BART), Muni Metro, and ferry transportation networks. It further serves as an emergency evacuation area and provides flood protection for regional transportation, and downtown neighborhoods and businesses. All told, the Seawall protects an estimated $100 billion of assets and economic activity. It is the City's responsibility to maintain the Seawall, which it does through the Port of San Francisco.
The City estimates there is a 72% chance of another major earthquake in the next 30 years. During an earthquake, it would be vital to relief and evacuation efforts to keep the Embarcadero and its transportation and utility networks functioning. However, analysis found that in its dilapidated state, the Seawall would be unable to protect the area. The seismic risk is compounded by the accelerating risk of flooding due to rising sea levels.
To address the risks, the Port is leading the Seawall Earthquake Safety and Disaster Prevention Program, ("Seawall Program"), that will invest a projected $2-5 billion over the next 30 years to protect and enhance the three mile stretch of the San Francisco waterfront.
Proposition A would authorize the City and County of San Francisco to borrow up to $425 million in bonds to finance the first phase of a multiyear project for the construction, improvement and seismic strengthening of the over 100-year old Embarcadero Seawall.
The proposed cost of the first phase is projected to be $500 million, with the additional $75 million anticipated to come from state and federal funds. Construction is scheduled for completion by the end of 2026.
The interest on the bonds would be financed by an increase in residential property tax of an estimated $0.013 per $100 of assessed value. Landlords would be allowed to pass on up to 50% of the increase to their tenants. The Citizens' General Obligation Bond Oversight Committee would review bond spending and provide an annual report to the Mayor and Board of Supervisors.
A yes vote is a vote in favor of authorizing the city and county of San Francisco to issue up to $425 million in bonds at an estimated tax rate of $0.013 per $100 of assessed value to fund repairs and improvements to the Embarcadero Seawall and Embarcadero infrastructure and utilities for earthquake and flood safety.
A no vote is a vote against authorizing $425 million in bonds at an estimated tax rate of $0.013 per $100 of assessed value to fund repairs and improvements to the Embarcadero Seawall and Embarcadero infrastructure and utilities.
The Way It Is Now:
The 100-year-old Embarcadero seawall is the foundation of approximately 3 miles of San Francisco’s northeastern waterfront. The seawall no longer adequately protects the City from tides, floods and rising sea levels. The seawall is also not protected from earthquake damage. Through the Port of San Francisco, the City is responsible for maintaining the seawall. The City plans to fortify the seawall over the next 30 years.
The Port’s recommended plan is estimated to cost up to $5 billion, and the City seeks to finance the first phase. To pay for large capital projects, the City relies on several funding sources, including borrowing money by selling general obligation bonds. The City uses property tax revenues to pay the principal and interest on these bonds.
The Proposal:
Proposition A would allow the City to borrow up to $425 million by issuing general obligation bonds for the repair and upgrade of the City’s seawall. The Citizens’ General Obligation Bond Oversight Committee would oversee the spending of general obligation bond revenue proceeds.
The Port and the Board of Supervisors will conduct a public process to determine the specific projects to repair and upgrade the City’s seawall.The bond will fund ongoing design and construction improvements that address the most significant earthquake and flood risks to the seawall.
Proposition A would allow an increase in the property tax to pay for the bonds, if needed. It is City policy to limit the amount of money it borrows by issuing new bonds only as prior bonds are paid off. Landlords would be permitted to pass through up to 50 percentof any resulting property tax increase to tenants.
On June 26, 2018, the Board of Supervisors voted 11 to 0 to place Proposition A on the ballot. The Supervisors voted as follows:
Yes:
Breed, Cohen, Fewer, Kim, Peskin, Ronen, Safai, Sheehy, Stefani, Tang, Yee.
No:
None.
Should the proposed $425 million in bonds be authorized and sold under current assumptions, the approximate costs will be as follows:
These estimates are based on projections only, which are not binding upon the City. Projections and estimates may vary due to the timing of bond sales, the amount of bonds sold at each sale, and actual assessed valuation over the term of repayment of the bonds. Hence, the actual tax rate and the years in which such rates are applicable may vary from those estimated above. The City's current debt management policy is to issue new general obligation bonds only as old ones are retired, keeping the property tax impact from general obligation bonds approximately the same over time.
