Argument for Using $115 Million COPs to Fund Treasure Island Power Grid Upgrades

The argument advocates using the $115 million in General Fund Certificates of Participation (COPs) from Files 24-0198 and 24-0202 to fund Treasure Island power grid upgrades.

The proposed ordinance (File 24-0198) and resolution (File 24-0202) amend the Development Agreement and Disposition and Development Agreement (DDA) between the City, Treasure Island Development Authority (TIDA), and Treasure Island Community Development LLC (TICD) to secure $115 million in General Fund Certificates of Participation (COPs) for Stage 2 infrastructure. This funding, intended to advance the Treasure Island/Yerba Buena Development Project, must prioritize power grid upgrades to resolve the persistent outages—over 500 since 1997, averaging 18 annually—disproportionately burdening the 60% low-income residents of Census Tract 6075017902. Here’s why and how this can be achieved:

1. **Explicit Scope Includes Utilities**: The March 2024 TIDA staff memo confirms the $115 million COPs will fund "utility systems" alongside geotechnical work and streets for Stage 2 (Budget and Legislative Analyst Report, April 17, 2024, p. 38, [sfbos.org](https://sfbos.org/sites/default/files/BLA_Report_041724.pdf)). Chronic power outages, a documented health and safety crisis (e.g., sewage backups, medical device failures), make grid upgrades an urgent utility need ([treasureislandsfpoweroutages.com](https://www.treasureislandsfpoweroutages.com/)). The San Francisco Administrative Code § 99.1 mandates reliable electric service as a public benefit ([sfgov.org](https://codelibrary.amlegal.com/codes/san_francisco/latest/sf_admin/0-0-0-10586)), aligning with the DDA’s community obligations.

2. **Existing Residents’ Equity**: The Project’s 27.2% affordable housing commitment (2,173 of 8,000 units) and 300 acres of public space signal a public benefit focus (Budget and Legislative Analyst Report, p. 33), yet current residents face a grid unchanged since the Navy’s 1997 exit ([sfpuc.gov](https://www.sfpuc.gov/about-us/newsroom/sfpuc-and-treasure-island-development-authority-install-near-term-measures-improve-power)). The COPs’ purpose—to improve financial feasibility—extends beyond developers to residents enduring a fourfold outage rate compared to PG&E areas ([treasureislandsfpoweroutages.com](https://www.treasureislandsfpoweroutages.com/)). Redirecting a portion of the $115 million (e.g., $50–75 million, per urban retrofit benchmarks) to grid stabilization ensures equity, consistent with the Housing Element’s call for infrastructure investment in underserved areas (Program 8.7.1, [sfplanning.org](https://generalplan.sfplanning.org/Housing_Element_2022_adopted.pdf)).

3. **Legal and Fiscal Flexibility**: The Financing Plan’s “Alternate Financing” provision (Exhibit EE, Budget and Legislative Analyst Report, p. 35) commits the City to fund Stage 2 when CFD and IRFD capacities falter, as they have due to delayed tax revenues. COPs, issuable in three tranches subject to Board approval, offer flexibility to prioritize grid upgrades in the first $50 million tranche (FY 2024-25) (Budget and Legislative Analyst Report, p. 38). The $550,000 annual CFD/IRFD offset reduces General Fund strain (p. 35), and freed CFD capacity post-Stage 2 could later support other needs, making this a strategic pivot, not a fiscal overreach.

4. **Political Imperative**: Mayor Breed’s May 2023 pledge that “safety and well-being” are paramount ([sf.gov](https://www.sf.gov/news/city-leaders-call-pge-address-recent-power-outages-impacting-thousands-residents)), coupled with City Charter § 3.100(14) emergency powers ([sfgov.org](https://codelibrary.amlegal.com/codes/san_francisco/latest/sf_charter/0-0-0-154)), demands action on Treasure Island’s outages. The Board can condition COP approval on a grid-specific deliverable (e.g., new switchgear, per 2020 SFPUC plans, [sfpuc.gov](https://www.sfpuc.gov/about-us/newsroom/sfpuc-and-treasure-island-development-authority-install-near-term-measures-improve-power)), ensuring TIDA fulfills its 1997 Conversion Act duty (Health & Safety Code § 33492.5, [leginfo.legislature.ca.gov](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=HSC&sectionNum=33492.5)) to all residents, not just future developers profiting from an 18–25% return (Budget and Legislative Analyst Report, p. 35).

5. **Mitigating Policy Concerns**: Critics warn the COPs exhaust City debt capacity through FY 2027-28 (Budget and Legislative Analyst Report, p. 40), but this $245.9 million debt service ($13.7M annually) is a fraction of the $1.6 billion unissued GO bond capacity (2024 Voter Guide, [sfcontroller.org](https://sfcontroller.org/sites/default/files/Documents/AOSD/2024%20Voter%20Information%20Pamphlet.pdf)). Front-loading grid upgrades in the first tranche minimizes long-term fiscal risk, aligns with the Spring 2025 capital plan, and preserves deferred maintenance options elsewhere—outweighing the cost of inaction on a known crisis.

**Conclusion**: The $115 million COPs are not just developer relief—they’re a lifeline for Treasure Island’s existing residents. The Board must approve Files 24-0198 and 24-0202 with a mandate to allocate funds for grid upgrades, leveraging TIDA’s public-benefit role and the City’s equity commitments. This solves a decades-long problem, proving San Francisco prioritizes its people over profits.

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### Sources and Links

1. **Budget and Legislative Analyst Report, April 17, 2024**: Details the legislative objectives, COPs structure, and fiscal impact. [https://sfbos.org/sites/default/files/BLA_Report_041724.pdf](https://sfbos.org/sites/default/files/BLA_Report_041724.pdf)

2. **Treasure Island Power Outages Website**: Documents 500+ outages since 1997 and their impact. [https://www.treasureislandsfpoweroutages.com/](https://www.treasureislandsfpoweroutages.com/)

3. **San Francisco Administrative Code § 99.1**: Mandates reliable electric service. [https://codelibrary.amlegal.com/codes/san_francisco/latest/sf_admin/0-0-0-10586](https://codelibrary.amlegal.com/codes/san_francisco/latest/sf_admin/0-0-0-10586)

4. **SFPUC News, 2020**: Notes prior grid upgrades (e.g., reclosers, switchgear plans). [https://www.sfpuc.gov/about-us/newsroom/sfpuc-and-treasure-island-development-authority-install-near-term-measures-improve-power](https://www.sfpuc.gov/about-us/newsroom/sfpuc-and-treasure-island-development-authority-install-near-term-measures-improve-power)

5. **2022 Housing Element**: Program 8.7.1 encourages infrastructure investment on Treasure Island. [https://generalplan.sfplanning.org/Housing_Element_2022_adopted.pdf](https://generalplan.sfplanning.org/Housing_Element_2022_adopted.pdf)

6. **Mayor Breed’s May 2023 Statement**: Prioritizes resident safety. [https://www.sf.gov/news/city-leaders-call-pge-address-recent-power-outages-impacting-thousands-residents](https://www.sf.gov/news/city-leaders-call-pge-address-recent-power-outages-impacting-thousands-residents)

7. **San Francisco City Charter § 3.100(14)**: Grants emergency powers. [https://codelibrary.amlegal.com/codes/san_francisco/latest/sf_charter/0-0-0-154](https://codelibrary.amlegal.com/codes/san_francisco/latest/sf_charter/0-0-0-154)

8. **California Health and Safety Code § 33492.5**: Defines TIDA’s public-benefit duties. [https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=HSC&sectionNum=33492.5](https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=HSC&sectionNum=33492.5)

9. **2024 Voter Guide**: Confirms $1.6 billion unissued GO bond capacity. [https://sfcontroller.org/sites/default/files/Documents/AOSD/2024%20Voter%20Information%20Pamphlet.pdf](https://sfcontroller.org/sites/default/files/Documents/AOSD/2024%20Voter%20Information%20Pamphlet.pdf)