October 26, 2017 - From the October, 2017 issue

SF City Administrator Naomi Kelly's Vision of a Resilient San Francisco

San Francisco City Administrator Naomi Kelly is the highest-ranking non-elected official in the City and County, overseeing a broad array of critical municipal functions—from capital planning and real estate to floodplain management. In this TPR interview, Kelly describes how San Francisco has continued to prioritize long-term, integrated resiliency projects since becoming the first U.S. city to appoint a chief resilience officer in 2015. Continuing the foray into new frontiers, she also explains the challenges and impacts of the city’s first Office of Cannabis and new Digital Services Office.


Naomi Kelly

"We need to build a city infrastructure that will survive both disasters and the complexities of technological development." —Naomi Kelly

Let’s begin with an issue that has the attention of all of California: resiliency and earthquake safety. How is San Francisco addressing that challenge?

Naomi Kelly: San Francisco has been looking at this issue through our Capital Planning Committee. Over the last 10 years, we have been very successful in getting general obligation bonds passed: In 2008, we passed a $890 million general obligation bond for the construction of a new hospital at SF General, replacing the former hospital, which was seismically unsound. We now have a new trauma center, the Zuckerberg San Francisco General Hospital.

In 2010, we passed our first earthquake safety emergency response bond, and we passed another in 2014 to ensure that our police headquarters, fire stations, and medical examiner buildings across the city are seismically safe. We want to avoid a repeat of the 1906 earthquake, when our emergency firefighting water systems did not work.

In addition, we’re working on climate resiliency and greenhouse gas emissions. This is not new to San Francisco: We published our first Sustainability Plan in 1996 and our first Climate Action Plan in 2004. Recently, Mayor Lee promised that the city would build 30,000 new homes by 2020. As we build new infrastructure in inundation zones, we have to make sure that it can survive the floods and storms that are occurring on a more frequent basis.

We’re also working, through our soft-story retrofit ordinance, to get private homeowners whose buildings are prone to collapsing—as they did in the 1989 earthquake—to retrofit. We are well on our way to a 90 percent compliance rate for that program.

Talk about the status and objectives of the plan to upgrade San Francisco’s century-old seawall.

The seawall is an essential part of San Francisco’s infrastructure. It runs about three miles along the northern central edge of the city: around Fisherman’s Wharf, and all the way down the city’s east side to AT&T Park.

The port is particularly important to San Francisco because it enables transportation to, from, and within the city. Touching the port is the Transbay Tunnel, which is a major transportation artery where BART comes through at the Embarcadero Station. There are also ferry terminals along the port, and MUNI streetcar lines that go up and down the Embarcadero. All of this depends on a seawall that is tall enough, strong enough, and seismically sound enough to protect us from sea-level rise and earthquakes.

The economic impact of this system is huge. In addition to folks getting in and out of the city to work, tourism is a major industry for San Francisco, and most of our tourist spots are right on the waterfront: Fisherman’s Wharf, Pier 39, Ghirardelli Square, the Ferry Building, and the Exploratorium. The properties along the Port generate about $2 billion in annual spending for the city, and the structures that sit on the port are valued at about $1.6 billion.

We need to protect these investments so that, in the event of a disaster, we don’t suffer a huge loss to our economy. That is part of resilience. We can get ahead of this by fortifying these structures so that, if and when there is a natural disaster, we are back up and running as soon as possible.

Describe the team and strategy that has been pulled together for this project. How you are considering financing this investment?

We recently awarded a $40 million contract for planning and design services to a combination of international and local experts, including the Dutch company Arcadis and American firm CH2M.

In terms of financing, our Seawall Finance Working Group has looked at every single possible funding strategy, big and small, from federal to state to local. Out of 48 options they reviewed, they are now pursuing six primary strategies. The immediate one is a $350 million general obligation bond, which we plan to take to the voters in November 2018.

We’re looking at implementing a Community Facilities District, an Infrastructure Financing District to capture local property tax increment revenue, and an Enhanced Infrastructure Financing District for state property tax increment revenue. Finally, we’re pursuing funding from the U.S. Army Corps of Engineers as well as funds from the State.

The secondary strategies we’re considering include seeking capital dollars from the Port of San Francisco, as well as a possible sales-tax increase. That may be a hard win, but we’re not giving up yet. We’re also looking at different ways the tourism industry could help solve this problem.

Let’s segue to the energy initiatives the city is pursuing to reduce greenhouse gas emissions and increase energy efficiency, including the proposal to outfit community buildings with solar-plus-storage systems.

We need to make sure that our capital investments last—especially when it comes to resiliency. When that particular proposal came to Capital Planning, it hadn’t been thoroughly vetted by either the San Francisco Public Utilities Commission or the Capital Planning team.

Solar plus storage is definitely going to be part of our capital planning. But the solar battery industry is still evolving. We don’t want to end up putting in the solar panels of 10 years ago. We need to take a measured approach and make sure that we adopt the best technology, and that it will endure the passage of time. That’s how we’ll get long-term resilience out of our investment, and build something that will actually serve our needs in the event of a disaster.

There’s more to resilience than advancing new projects. We need to build a city infrastructure that will survive both disasters and the complexities of technological development.

As you look around at the devastation many parts of the country have suffered in recent years, do you see lessons for San Francisco in those experiences? 

After Hurricane Katrina, Mayor Ed Lee (then City Administrator) visited Louisiana. The lessons we took from that experience were less about engineering and more about the resilience of neighborhood networks.

We realized that, after a major disaster, all of our public and private utilities need to be talking to one another. We set up a Lifeline Council, which meets regularly, made up of all the city agencies and private utilities—all the energy, gas, and telecom companies—so that we all know exactly who to call within those agencies when an emergency hits. Our Lifeline Council has been rocking and rolling for 10 years. As part of our 100 Resilience Cities Grant, we also worked with the Association of Bay Area Government to create another Lifeline Council at the regional level.

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San Francisco also has a Neighborhood Empowerment Network, where neighborhood and merchant associations talk to each other to keep their own communities resilient. They work on basic things like emergency plans, seismically safe buildings, places to congregate, and phone trees.

We also paid attention to the earthquake in Mexico City. It was the collapse of a school that caused a lot of the impact there. Now, in addition to our soft-story retrofit mandate, we are looking at private schools. Our public schools were required to retrofit their campuses years ago, and are almost at the end of that process, but private schools were not—and there are a lot of private schools here. We implemented mandatory seismic evaluations, which are due in November, and almost all the schools have already completed them. Many have even taken on more responsibility than required by the city, and are starting their retrofits. Our next phase is assessing private-sector buildings that are made of non-ductile concrete, which is what the school in Mexico was made of.

Another area we’re thinking about is animal care. After Katrina, we saw how many folks didn’t want to leave home without their animals, or even went back to get their animals. It’s very important for that reason that we have a resilient Animal Care and Control. Ahead of Hurricane Irma, San Francisco accepted animals from Miami, which was clearing out their shelters to make space for animals that got lost or had no homes during the storm. Our own animal shelter is one of our seismically risky buildings, so we are building out a new one.

You and Mayor Lee recently appointed San Francisco’s first Chief Digital Services Officer. Elaborate on how the city uses digital technology to manage its challenges. 

We hired Carrie Bishop in February. She’s a dynamic manager who is bringing a great vision to our new digital services team. She has a team of designers, developers, and project managers working on many different projects to enhance the customer experience of dealing with the city.

The biggest win for us so far is our citywide website, which the team is dedicating a lot of time to revamping and making more user-friendly. We want to help residents transact as much business online as possible and not necessarily have to go into a civic building—whether it’s paying parking tickets, ordering a residential permit, or getting a birth or death certificate.

Right out of the gate, the team helped create an application portal for the Office of Short-Term Rentals, where folks can register their Airbnb or HomeAway or VRBO online. We’ve heard that people are very happy with its user-friendliness. The team also helped the Mayor’s Office of Housing create a portal where people can apply for below-market-rate housing. They’re currently working with the Office of Civic Engagement and Immigrant Affairs to create a Know Your Rights portal, which is especially important in this day and age, and helping the Office of Cannabis develop online applications for commercial operators that will go live in early 2018. 

Let’s turn to income inequality and housing affordability. How do the city and county address that?

Between the Office of Housing and the new Department of Homelessness and Supportive Housing, I can say that this mayor has done a lot. San Francisco may not have the homelessness numbers that L.A. and other big cities have, but we are a small city on the tip of a peninsula, so it feels more concentrated. And because we’re so lacking in space, housing affordability is a difficult problem.

Mayor Lee has committed the city to building 30,000 new and remodeled homes by 2020, and to make sure that this commitment outlasts his tenure, he has institutionalized it by expediting the permitting process for affordable housing. He also recently announced that San Francisco will build 250 modular housing units for the homeless in the South of Market area.

This problem didn’t just happen under Mayor Lee—every mayor before him has also struggled with the homelessness issue. But we don’t give up; we keep turning over every rock for different approaches. 

What’s the new norm for the relationship between San Francisco and the federal government? What do you expect from them, and what concerns you?

We’re proud of being a sanctuary city, and we’re very concerned for our residents and students who came forward under DACA to say, “I’m undocumented,” and now have reason to be fearful. We feel for our residents who may not report domestic violence or other crimes for fear of retaliation. We’re doing our best to be a safe haven for all those law-abiding people.

We’re very concerned about the threats of taking away money from sanctuary cities. I mentioned earlier that we’re looking to the U.S. Army Corps of Engineers to help fund our seawall; we’ve also looked to Department of Transportation grants for other projects. The reality is that we may not rank highly, or qualify at all, for discretionary grants because of our fundamental belief in remaining a sanctuary city.

The other major thing we’re worried about in Washington is the Affordable Care Act. As a city and county, we run two hospitals, and we provide universal healthcare through the Healthy San Francisco program. The Affordable Care Act allows us to do that, so we’re keeping a very close eye on what happens to it.

Let’s end on a “high” note: San Francisco’s new Office of Cannabis is housed in your office. Share the challenges you’ve taken on as part of that.

It’s a tall order. January 1, 2018—when recreational cannabis becomes legal statewide—is around the corner, and we want to be thoughtful and thorough and get as much stakeholder input as possible before we start implementing our commercial cannabis controls.

On this issue, it’s not like we can go to another city and see what they did 40 years ago. There’s no playbook that we can turn to; we are trailblazing and creating this as we go. Our proposed local regulatory framework was recently introduced to the Board of Supervisors, and we have invited all residents and businesses to participate in shaping these policies.

One thing that is important for us in this effort is equity. We know very well that the War on Drugs has had deeply negative consequences for many communities of color, and we hope to be part of rebuilding those communities and creating a diverse cannabis industry after 50+ years of misguided drug policy that targeted one community. Part of restoring fairness will be creating access to workforce and entrepreneur opportunities within the industry, so we want to create an equity program that mandates such things as first-source hiring for all operators. We are required to submit an equity report to the Board of Supervisors by November 1, and we will continue to work through this with many non-profits and community stakeholders.

Another priority is sustainability. San Francisco values environmentally conscious business practices and being a healthy city. We’re working to develop sustainable solutions for an industry that is high-energy and water-intensive. For example, we want to mandate operators to provide the city with water management plans, descriptions of sustainability methods, and energy-efficiency reporting.

There’s a lot to prepare for in the cannabis industry—how we coordinate inspections, healthy impacts on neighborhoods, and so much more—and we don’t want to rush into it. It’s not that we’re dragging our heels—we’ve got our foot on the pedal in terms of drafting regulations—but we don’t want to hurt existing operators. Hopefully, the Board of Supervisors will approve temporary applications for existing operators, equity operators, and Prop 215-compliant operators that were shut down by federal action. We want to allow them to continue to operate while we get the land-use controls and regulatory framework in place, and create a transparent process from multiple inputs.

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© 2018 The Planning Report | David Abel, Publisher, ABL, Inc.