Fiscal Year 2011.12 Approved Budget (PDF)
The Agency is the city's primary housing and economic development arm, working with both nonprofit and for profit developers to advance the needs of the city and revitalize segments of the local economy. Additionally, the Agency sponsors public development within its redevelopment project areas ranging from streetscape improvements to workforce development to the construction and maintenance of parks, open space, and multi-cultural arts facilities.
The Agency's mission includes key urban planning and development challenges facing San Francisco: the environmental remediation and conversion of obsolete military bases into viable urban neighborhoods; the development of regional multi-modal transit infrastructure and surrounding transit-oriented development; the removal of derelict rail yards and conversion of an underutilized light industrial district to a new mixed-use commercial, educational and residential neighborhood; the development of a cultural and entertainment district with world-class public spaces, museums, and hotels; improving access to and recreational use of the city's waterfront; and the revitalization of economically distressed neighborhoods in a manner that prevents displacement and improves the quality of life of city residents.
The Agency pursues an ambitious affordable housing preservation and development program, devoting between 40% and 70% of its annual work program budget to affordable housing ($110.8 million in the current year's budget), which has resulted in approximately 6,956 affordable units over the last ten years. More particularly, the Agency focus its energies and resources in providing housing and related social infrastructure to low-and moderate-income households and to those with special needs such as seniors, persons with disabilities, and the homeless.
In recent years, funding for low-income housing has continued to be available to the Agency due largely to plan amendments adopted in calendar year 2005 for the Golden Gateway, Hunters Point, and India Basin project areas pursuant to Senate Bill 2113 ("SB 2113") and the similar amendment to the Rincon Point-South Beach project area approved by the Board of Supervisors in May 2007. Future such amendments will be considered for Western Addition A2 (hereafter "Western Addition") and Yerba Buena Center as each project area approaches its expiration date of January 1, 2009, and January 1, 2010, respectively.
Fiscal Year 2008/09
The Agency's primary focus for fiscal year 2008/09 is (1) creation of housing for low-and moderate income households, (2) completion of redevelopment programs in the Western Addition and Yerba Buena Center, (3) implementation of the new Transbay and Bayview Hunters Point project areas, (4) pursue on-going revitalization of the South of Market Project Area through beautification efforts and business development, (5) continue funding of infrastructure and public improvements in Mission Bay, and (6) commence development of market-rate and affordable housing units as part of the Hunters Point Shipyard's Phase I redevelopment plan and continue negotiation of the Phase II integrated development of the Shipyard and the Candlestick Point area. In addition, the Agency will continue its support of revitalization efforts that are ongoing, including a priority for job training and support of small businesses.
The Agency's total spending program for fiscal year 2008/09 totals $337.0 million, of which nearly $70.7 million is supported by non-tax increment revenue sources (land sale proceeds, leases, grants, developer contributions). The Agency proposes funding the difference between the spending program and the non-tax increment revenue with $88.8 million in tax increment and borrowing about $177.5 million through the sale of tax allocation bonds, i.e. bonds repaid with tax increment.
The Agency funds its budget primarily with tax increment and proceeds from the sale of bonds secured with tax increment. Tax increment is merely a portion of property taxes generated within redevelopment project areas. By law, tax increment must be spent within the redevelopment project area from which it is derived, except for affordable housing. In fiscal year 2008/09, the Agency is requesting tax increment in the aggregate amount of $88.8 million. Of that total, the largest portion in the amount of $60.2 million is required to pay debt service on outstanding debt, nearly $5.0 million is needed to pay for operations (personnel and administration costs), and approximately $2.0 million is requested to fund portions of non-capital work programs expenditures in Bayview Hunters Point Area B, South of Market, and Transbay. The balance of tax increment is requested to make "pass-through" payments mandated by the state or required pursuant to developer agreements associated with Mission Bay.
Major components and goals of the Agency's proposed budget include:
1) Pay for personnel and administration costs from non-borrowed funds.
2) Maintain Agency operations at approximately the current level.
3) Pursue an aggressive affordable housing program that is consistent with the Agency's available debt capacity.
4) Advance completion of the Agency's work in the older project areas of Western Addition and Yerba Buena Center, the plans of which are due to expire January 1, 2009 and January 1, 2010, respectively. Thereafter, tax increment can be received solely to pay indebtedness, such as the repayment of principal and interest on borrowed funds, on debt incurred prior to the aforementioned expiration dates.
5) Continue efforts to revitalize South of Market by funding physical improvements to, and maintenance of, streets and sidewalks, and building facades. Fund construction of shell to the South of Market Health Center facility.
6) Fund preparation of EIR for streetscape improvements and design and construction of open space in Transbay.
7) Fund a variety of activities in Bayview Hunters Point, including streetscape improvements, employment and workforce development, a facades and tenant improvements program, outreach support, and low-income housing.
8) Complete planning activities related to the Visitation Valley survey area and planning efforts to amend the Bayview Hunters Point Plan to add area "C".
9) Oversee the completion of the first phase of infrastructure improvements (i.e., water and sewer systems, streets and sidewalks, telecommunications, etc.) of the Hunters Point Shipyard and commence development of market-rate and affordable housing units.
10) Fund the construction of infrastructure improvements in Mission Bay and maintenance of streetscapes and parks.
Following is a brief discussion of the major program activities included in the 2008/09 budget.
The proposed budget for fiscal year 2008/09 includes a total investment in affordable housing of $110.8 million, the largest amount ever requested by the Agency. Of that total, $8.0 million represents the federally funded HOPWA program. A portion of the balance of the proposed housing budget of nearly $102 million would be used to continue to fund development costs underway in Bayview Hunters Point, South of Market, Western Addition, and Citywide. The fiscal year 08 /09 housing budget would also be used to provide initial funding of predevelopment costs of the Agency's developments in Mission Bay South, Transbay, and Hunters Point Shipyard.
Lastly, a portion of the housing budget for fiscal year 08/09 would be used to continue to fund ongoing programs, such as the Certificate of Preference Program, the Single-Family Homeownership Program, and the next round of the Model Block Program. Affordable housing comprises approximately 46.3 percent of the Agency' s total work program budget for fiscal year 2008 /09. This share rises above 76.7 percent if the Agency' s budget is modified for funding of Mission Bay infrastructure improvements, which is a non-discretionary item that the Agency is obligated to finance pursuant to an agreement entered into between the City/Agency and the developer. Five million dollars of the 08/09 Affordable Housing Program is contingent on amending the Western Addition Redevelopment Plan, which expires January 1, 2009, pursuant to SB2113 and related sections of the Community Redevelopment Law (CRL). Such amendment would allow the receipt of tax increment beyond the expiration debt of the Western Addition Redevelopment Plan to fund exclusively low-and moderate income housing to replace housing units lost during the Agency's urban renewal efforts prior to 1976.
The Agency is budgeting $102.4 million in fiscal year 2008/09 for public improvements, of which $95. 0 million will be used to refund a portion of outstanding debt and/or fund infrastructure improvements, including parks and open space, in Mission Bay North andMission Bay South that the Agency is obligated to finance pursuant to existing agreements. (Fiscal year 2008/09 is likely to be the final year of funding for infrastructure improvements related to Mission Bay North.) Other funds budgeted for public improvements include streetscape repairs of $1.5 million in Western Addition, $ 1.3 million in Bayview Hunters Point, and $ 1.0 million in South of Market. Additionally, $ 2.0 million is programmed for the design and construction of open spaces in Transbay, $948,000 is requested for repairs, renovations and/or upgrades to Yerba Buena Gardens to be paid with funds earmarked for such purposes, and $200,000 is requested to complete the construction of the Jessie Square Plaza in Yerba Buena Center. Lastly, $450,000 is budgeted to provide temporary facilities to businesses occupying certain Hunters Point Shipyard facilities to be funded primarily with a grant from the federal government.
Funding in the amount of $4.9 million is being requested in fiscal year 2008/09, of which $3.1 million is programmed to be used for Western Addition which includes $62,000 for Urban Solutions, and $690,000 is earmarked for Sixth Street business development and economic outreach in South of Market, a program that assists and encourages businesses to make physical improvements to their properties by providing an inexpensive source of financing. Another $872,000 is programmed for a small business assistance program in Bayview Hunters Point, including funding of the Renaissance Entrepreneurship Center. Additionally, $180,000 is budgeted to provide business assistance in the Yerba Buena and South of Market Project Areas.
Significant budget items for fiscal year 2008 /09 include $7.5 million for the maintenance of Yerba Buena Gardens and on-going financial support of the Yerba Buena Cultural facilities and $1.3 million for the maintenance and improvements of South Beach Harbor, both of which are self-financed, and $1.3 million for job training and placement. Additionally, $1.2 million is budgeted to provide operating support to MOAD.
Personnel and Administration
The fiscal year 2008/09 budget proposes a slight increase of 3.1 full time equivalent positions (FTE) to the Agency's total permanent full time staff. One position is added to the housing division to administer the growing work load associated with the Single Family Homeownership Program. One accounting position is added in response to a recommendation made by the Agency's auditors so that the Agency' s financial transactions and "books " may be recorded in a timelier manner. Lastly, the position of Harbor Master is added to the 08/09 personnel budget, whose functions were performed until recently by an Agency employee who has retired. The Harbor Master position is entirely funded with revenues generated by the South Beach Harbor. Two and a half temporary positions are included in the proposed budget, one and a half of which would assist in planning efforts underway in Visitation Valley, Area "C" in the Bayview Hunters Point, and in Hunters Point Shipyard Phase II. The other temporary position included in the budget is to assist with the computerization of the Agency's records system.
The personnel budget assumes salary increases of 2.0% effective July 1, 2008 and either 3.5% or 3.75%, depending on the bargaining unit, effective January 1, 2009, pursuant to agreements between the Agency and its bargaining units. For the first time, the Agency is requesting funds in its personnel budget in the amount of $612,500 to be used to pre-fund future health care benefits provided to Agency retirees pursuant to existing bargaining agreements. This funding request is in response to a new accounting rule, commonly referred to as GASB 45, requiring governmental units to report the cost of providing such post employment benefits in their financial statements, commencing with fiscal year 2007/08. It is noted that the City too has begun to pre-fund such obligations.
The Agency is requesting approximately $3.5 million in fiscal year 2008/09, compared to $3.2 million in fiscal year 2007/08, to pay for administration expenses (e.g., office supplies, insurance, phone service, postage, office rent).