Section 5

Our Recommendations

The City of Berkeley has an infrastructure system that has allowed us to thrive and grow for over 100 years. The Vision 2050 team commends the City for the planning it has done and the programs underway to keep our systems working. Now is the time to incorporate new technologies and to adapt to environmental trends that will allow the systems to support us for another 100 years. The Vision 2050 task force has reviewed the City’s work to date and has drawn on the expertise of our members. With careful thought, we provide the following recommendations for your consideration.

The task force recommends that any future infrastructure project prioritize quality of life. Every project should be vetted and meet all the quality of life core value metrics that were presented in Chapter 2 and in the table below. Just like every infrastructure project should be sustainable, and through its implementation provide an easier movement of people and goods, it should also provide an opportunity to improve the lives of all Berkeley residents. The infrastructure projects must provide upward mobility, resilience, safety, and access to healthier and equitable urban environment in which everyone can have the opportunity to thrive.

The task force recommends that the quality of life core values serve as the guiding standard to inform, rank, and approve future infrastructure projects. Furthermore, the task force recommends this tool be used as a metric to gauge how quality of life is improved at a community and individual level for disadvantaged residents. The task force recommends disadvantaged residents to be, but not limited to, communities of color, children, elderly, low-income, disabled, homeless, immigrants. Projects that do not meet all criteria shall be revised and properly address before receiving final approval. Additionally, the responsible department for infrastructure projects should create a scoring mechanism to give priority to areas and infrastructure projects with highest urgency, these projects and areas will be prioritized using the core values matrix and be highly weighted on equity values.

Public Health and Safety Strong Local Economy Resiliency and Sustainability

Ensure benefits are equitably distributed and available and that they consider health status and school outcomes as well as access to jobs, housing, food and upward mobility Enhance public health, well-being and safety

Develop local skills and capacity to keep jobs and economic benefits close to home

Enhance abilities to withstand challenges and support future needs Meets core values criteria?

Equity is an important part that each infrastructure project must address. The following equity considerations must be incorporated: health status outcomes, school outcomes, access to jobs and housing, access to upward mobility, access to food, with an eye towards creating opportunities for young people, include health equity.

Policies to Move Us Forward

Policies are the principles adopted by the City Council that guides staff on how to carry out its work. The Vision 2050 task force recommends the following new policies for our City. The policies were formulated to address the following challenges.

Life Cycle Infrastructure Management Policy

Life Cycle Infrastructure Management is a process that Berkeley can use to make sure that planned maintenance can be conducted and capital assets (pipes, streets, equipment, etc.) can be repaired, replaced, or upgraded on time and that there is enough money to pay for it.

Life cycle management is the practice of managing infrastructure capital assets to minimize the total cost of owning and operating these assets while delivering the desired service levels. Many cities use this practice to pursue and achieve sustainable infrastructure. A high-performing life cycle management program includes detailed asset inventories, operation and maintenance tasks, and long-range financial planning. Cities are responsible for making sure that its system stays in good working order, regardless of the age of its components. Life cycle management programs with good data—including asset attributes (e.g., age, condition, and criticality), life-cycle costing, proactive operations and maintenance, and capital replacement plans based on cost-benefit analyses—can be the most efficient method of meeting this challenge. The benefits that can be realized through life cycle management include:

    • Prolonging asset life and improving decisions about asset rehabilitation, repair, and replacement
    • Meeting consumer demands with a focus on system sustainability
    • Setting rates based on sound operational and financial planning
    • Budgeting focused on critical activities for sustained performance
    • Meeting service expectations and regulatory requirements
    • Improving responses to emergencies
    • Improving the security and safety of assets
    • Reducing overall costs for both operations and capital expenditures

Life cycle management principles have been used by the private industries for a long time. In the public sector, the major infrastructure systems (highways, water systems, airports, ports, etc.) built after World War II have deteriorated over time and asset management principles were called in to help. Over the past 40+ years, the U.K., Australia, and the United States have implemented life cycle management programs in the highway, water, airport, and other infrastructure systems.

We recommend that Berkeley adopt a life cycle infrastructure management policy that includes the following.

    • Define the purpose and outcome objectives of having a life cycle infrastructure management program
    • Define the infrastructure systems that will be involved with the program
    • Define the components of the program
    • Define the part of the organization responsible for the program
    • Define the reporting and oversight requirements

Multi-criteria Evaluation Policy

Berkeley has many policies and written plans that guide the evaluation of infrastructure decisions. However, the City does not have a set of clear consistent criteria on how to conduct the evaluations. Knowing that our city has a limit on its financial resources, a limit on its staff resources, and an engaged informed community, it would be helpful to have a balanced and transparent approach to decision making.

The Vision 2050 task force recommends the use of multi-criteria evaluation for decision making. An example of this the Triple Bottom Line (TBL) concept. TBL analysis seeks to quantify financial, environmental and social impacts and value them to the extent practical, while retaining all significant non-quantified or non-valued impacts as part of a structure economic summary description of decision alternatives. Leading public agencies, such as Seattle Public Utilities, and many private companies are using TBL.

Another example is the Envision program, organized by the Institute for Sustainable Infrastructure. Envision is an objective framework of criteria designed to help identify ways in which sustainable approaches can be used to plan, design, construct and operate infrastructure projects. Envision not only asks, “Are we doing the project right?” but also, “Are we doing the right project? Envision is a framework that includes 64 sustainability and resilience indicators, called ‘credits’, organized around five categories: Quality of Life, Leadership, Resource Allocation, Natural World, and Climate and Resilience. These collectively address areas of human wellbeing, mobility, community development, collaboration, planning, economy, materials, energy, water, sitting, conservation, ecology, emissions, and resilience. These indicators collectively become the foundation of what constitutes sustainability in infrastructure.

Each of the 64 credits has multiple levels of achievement representing the spectrum of possible performance goals from slightly improving beyond conventional practice, to conserving and restoring communities and environments. By assessing achievement in each of the 64 credits, project teams establish how well the project addresses the full range of sustainability indicators, and are challenged to pursue higher performance. We recommend that Berkeley adopt a multi-criteria evaluation policy that includes the following.

• Define the purpose and outcome objectives of having multi-criteria evaluation
• Define the infrastructure systems that will be involved with the program
• Define the components of the program and the optional tools
• Define the part of the organization responsible for the program
• Define the reporting and oversight requirements

One Dig Policy

The City coordinates repair and rehabilitation work in the public right of way with other agencies. The work can involve street paving, sewer work, storm drain work and other projects. The coordination is done regularly with EBMUD, PG&E, ATT, Comcast, and other agencies to determine if they have planned work in the same area in the future. Berkeley also imposes a five year moratorium to not have work that requires pavement cuts after a street has been rehabilitated. All of these efforts help to ensure that construction work in one area is coordinated and that impacts to service and the public is minimized.

Berkeley has been conducting studies to expand broadband internet service to more parts of Berkeley and is preparing a Broadband Infrastructure Master Plan. Many other cities have similar goals. One issue that many cities are addressing is whether to require the installation of conduits for telecom cables whenever other utility work is constructed. The purpose to expand internet service in cities and to minimize the cost and impacts of installing conduits separately. This is often called a “one dig” or “dig once” policy.

The Vision 2050 task force recommends the adoption of a One Dig policy to formalize the coordination being done and to facilitate the expansion of internet service in the City. The policy should include the following.

• Define the purpose and outcome objectives of having a One Dig policy
• Define the infrastructure systems that will be involved with the policy
• Define the agencies where coordination is required
• Define the part of the organization responsible for the program
• Define the reporting and oversight requirements

Right-of-Way Management and Financing Policy

The City must consider the 800 acres and 200 miles of city right-of-way as a holistic asset that must be managed comprehensively over 30 years. Key goals of the policy include the following:

Management

The city’s Transportation Division should be expanded into the Right-of-Way Bureau and be responsible for all the coordination of all aspects of the public right-of-way (i.e., construction coordination with utilities, street openings, etc.) and primary jurisdiction over all aspects of the ground plane (traffic management, curb management, green infrastructure, sidewalk repair, and street pavement). A key need is for a 3D map of all the utilities in the city right-of-way, which does not currently exist. The Bureau should make this an essential and required baseline project. Other city divisions and services (sewer, etc.) will be treated by the Bureau in the same manner as the city currently coordinates with private utilities.

Financing

The Right-of-Way Bureau must become an enterprise department with dedicated funding sources. These sources should fully fund the required pavement program, sidewalk repair program, green infrastructure, implementation of the bicycle and pedestrian plans, as well as the on-going coordination efforts (requiring more staff). In addition to the subventions from the State and the county sales tax, (about \$5 million annually), the city should do the following with city-controlled revenue:

• Redirect two-thirds of the utility users fees (about \\$10 million annually) to the Right-of-Way Enterprise Fund.
• Redirect all of the parking meter revenue and the parking fines (about \\$16 million annually) into the Right-of-Way Enterprise Fund.
• Merge and reauthorize the separate street-lighting, stormwater, green infrastructure and sewer funding programs into one fund, specifically authorizing the use of these funds for associated projects within the public right-of-way.
• Ad Valorem Tax:  Berkeley has an assessed valuation of about \\$20 billion.  This generates about \\$200 million in 1% tax revenue, of which Berkeley receives 32.57%%, or about \\$65 million annually. Up to 10% of the ad valorem revenues (initially about \\$6.5 million annually) should be allocated to the Right-of-Way Enterprise Fund.

In addition, the city should also institute the following new taxes to prepare for the gradual decline of the fuel tax and the likely increase in shared-ride vehicles:

• A TNC tax, patterned on San Francisco’s proposed tax of 3.26% on regular single-passenger trips and 1.5% on shared rides.  Trips made by fully electric vehicles will be tax-free for the first two years, and then gradually increasing to the full rate within five additional years.
• A trip charge on all vehicles operating on city streets when TNC rates increase to 45%, replacing the TNC charge.  An additional curb access charge for TNCs when they drop passengers on curbs on city streets.
• Based on San Francisco’s TNC calculations, the Berkeley tax could generate about \\$5 million annually. These funds would be allocated to the Right-of-Way Enterprise Fund.
• Street Damage Restoration Fees – Los Angeles and other cities levy a street damage fee on local utilities for the pavement damage caused by underground utilities who do not adequately patch the street after projects.  Based on Los Angeles calculations, in Berkeley this fee could provide an additional \\$3 million annually into the Right-of-Way Enterprise Fund (this fee may be substantially reduced if the city coordinates paving and other projects well). ## Planning for the Future It is often said that the largest influence on a project are the decisions made during planning. Planning is a process to consider the community needs, the options to provide the project, the cost and schedule implications, and other factors. The City excels in planning in many departments. The following are recommendations to add to the planning work being done. ### Develop an Asset Management Program Currently, the City has three modest Asset Management Programs for vehicle maintenance & replacement, building maintenance and computer/servers which total about \\$19 million. Since these programs represent a small fraction of the total infrastructure assets, we make the following recommendations.

We recommend that an Asset Management Program (AMP) be developed to properly maintain Berkeley’s infrastructure and to forecast the future improvement needs. The background on the concept is discussed in the policy recommendations above.

We previously mentioned that much of the City’s infrastructure systems are 100 years old and have deteriorated. We can’t change that, but we can change the future. An AMP is a forward looking process. It forecasts maintenance needs to keep systems in proper working order and predicts the timing to perform repairs or replacement. It also forecasts the costs, which helps with budgeting and rate setting.

Components of an AMP include:

Summary of recommendations: 1. Conduct research to understand the concept and benefits of asset management. 2. Evaluate the organizational structure, staffing requirements, and budget to develop an asset management program. 3. Prepare an Asset Management Plan.

Move to Integrated and Adaptive Planning

The planning and implementation of infrastructure projects typically involves the Planning, Public Works, Parks and Recreation, and Budget and Finance Departments. It appears to us that some departments have planning capability while others do not. Some departments operate according to functional programs. Our experience is that planning is a separate discipline that requires specialized training, tools, and experience. We recommend that each department review its organizational structure and evaluate ways to have a planning capability.

Once planning capability is in place, we recommend that the planning be integrated across City departments. There are different ways to do this and the following is one suggestion.

• Organize an oversight committee of department heads or their designees to review and ensure integration of planning
• Hold quarterly oversight review meetings
• Use an adaptive planning process The new era of urban planning will have to contend with changes in the environments that have seemed relatively stable in the past. With all the things we’ve planned in the past – road systems, sewer systems, new towns, and new airports, etc. -- we haven’t planned for an environment that is changing so much that it will require us to adapt. “Adaptation” refers to altering our systems and structures to adjust to permanent changes. Resilience refers to altering systems and structures so that we can recover more quickly from temporary events. Both resilience and adaptation will be needed in a changing climate, because we will experience many of the gradual, permanent trends that we now face as a series of events (for example, extra high tides, or extra hot days). We will also continue to grapple with the risk of major earthquake events, which will require an ability to recover quickly. But adaptation is a special planning problem because it’s new, and it will require strategic investments by multiple generations of Berkeley citizens in order to succeed. The adaptation pathways approach is to array options against a future trend that is known, although the magnitude of that trend is unknown for any given year (as with sea level rise, for example). This planning method is best for situations where there is a known trend and direction, but the timing of the trend is uncertain. For example, we know that sea levels are rising, and that they will continue to rise until they reach at least 10 feet above present levels. But we don’t know what the relative sea level rise will be in any given year. We also know that both the likelihood and intensity of fires are increasing in California as a result of drying vegetation, but we don’t know when the Berkeley Hills will burn. The adaptation pathways approach would require us to lay out the different things we can do to reduce our losses and maintain our resources over a period of time, and identify sequences of things we can do as the environmental changes occur. Each sequence or “pathway” can be compared to the others in terms of costs and benefits, allowing planners to choose the one that maintains the most flexibility while conserving the value of key assets over time. As noted in the California SGC infrastructure planning guidance (CSIWG 2018), local governments need to track these environmental trends for at least two critical reasons. Berkeley should use tools like network diagrams and predicted climate trends to plan and communicate adaptation pathways that will avoid wasting public funds on assets that will be unsustainable. These adaptation pathways should be used to develop and critique existing Local Hazard Management Plans (LHMPs), plans to protect public health, watershed and street tree plans, park plans, capital planning for sewers, road maintenance plans, revenue expectations for coastal facilities, and water supply system capital planning. Summary of recommendations:
            1. Review and develop planning capability in the departments involved with infrastructure management
            2. Develop an organizational structure, such as an oversight committee, to integrate planning across City departments
            3. Use adaptive planning processes
            4. ### Prepare Infrastructure Master Plans Whether projects are in the CIP or need further studies to be in the CIP, we recommend preparing infrastructure master plans. Master Planning is a process to develop long term plans for infrastructure systems.  The process incorporates the following components:

• Evaluate the condition of the infrastructure assets and their remaining useful life.
• Evaluate the drivers that will affect the future use of the systems, including regulatory requirements, climate change conditions, technology advancements, and other factors.
• Evaluate alternatives for making the improvements.
• Develop a plan for the improvements, including the priority, schedule and funding requirements.

A Master Plan should be prepared for each infrastructure system. The Plan should project infrastructure needs for 20 or more years and the Plan should be updated on an approximate 5 year schedule.

Summary of recommendations: 1. Staff to review the status of existing infrastructure planning and to develop a program to prepare the needed infrastructure master plans. 2. Staff to prepare a process, criteria, and schedule to prepare the infrastructure master plans. The plans shall be updated on a regular schedule as required, such as every 5 years. 3. The master plans shall be the primary resource for input to the CIP and for capital financing.

Finance for the Future

City of Berkeley has \$851 million of Capital Assets1 of which 44% have exceeded it their useful lifespans.

City currently spends only about \$34 million/year on capital and maintenance needs. At this level of funding, Berkeley’s infrastructure is deteriorating faster than it is being repaired/replaced and construction cost escalation (~5%/yr) is significantly increasing replacement costs. For example, currently, the City spends \$1.3 million/year maintaining storm drains. After five years, the unfunded liability for the storm drain system is projected to increase from \$241 million to \$259 million.

• To modernize its old decaying physical structures with resilient, durable, and climate-smart infrastructure will require substantial investments.
• Does Berkeley have the financial resources to modernize its old decaying physical structures that provide vital services with a climate-smart infrastructure that will be resilient, technically advanced, and durable?

Berkeley’s finances are in good shape. In the last decade and a half, General Fund revenues have increased from \$108 to \$198 Million, or ~90%, as shown in Fig. 1. The Total City Budget, which was \$446 million in FY2017 has increased by a similar percentage. Revenues are exceeding expenses and the City’s Investment Portfolio, which holds unspent funds, has increased by 300%.

Capital expenditures are typically funded through a combination of debt financing (pay-as-you use) and cash (pay-as-you-go). Paying in cash avoids the cost of interest payments, but requires the City to accumulate sufficient cash to fund the project, while construction costs escalate. Using debt to finance capital projects, incurs interest expense, but allows the project to start earlier avoiding escalation costs. Finally, there is the option of using both cash and debt to finance infrastructure as the City did with the Center Street Parking Garage project.

GO Bonds

General Obligation Bonds (GO) are backed by the “full faith and credit” of the issuer. Typically, GO bonds are based on the assessed value of the property within the jurisdiction, and require voter approval by a two-thirds majority.

The cost of borrowing capital funds depends on the City’s credit rating. In FY2018 the Berkeley Unified School District (BUSD), which has annual revenues of ~\$175 million, has borrowed \$275 million and has received a credit rating on its GO bond debt from Standard & Poor of AA+. The COB Berkeley, which has annual revenues of ~\$415 million, has borrowed \$91 million, and also has a credit rating of AA+.

If the COB increased its GO debt/revenue ratio to match BUSD’s, the COB could issue several hundred million of additional debt and presumably keeps it AA+ rating.

Table 1

Table 1 shows a comparison of the revenues, GO debt, the debt/revenue ratio, and the Ratings by Standard & Poor for the COB and the BUSD.

Future GO Bond Debt Capacity

How much debt that a municipality can issue depends of the total assessed value of property in the City. Over the last quarter century, Fig 14 shows that the total assessed value of property in Berkeley has increased from \$4.7 billion to \$20 billion, or over 300%.

Fig. 14 shows the total assessed property values for the FYs 1992 – 2017. If property values continue to increase at a similar rate over the next 30 years, the total value of Berkeley property could be three times larger in 2050 than in 2018. This means that Berkeley could issue three times as much debt than currently outstanding, without raising its debt-service-tax-rate, if interest rates remain constant. Furthermore, as old bonds are paid off as shown in the right-hand portion of Fig. 14, there is an opportunity to issue additional debt, without raising the debt-service-tax rate.

Revenue Bonds

Revenue bonds are defined as municipal bonds that finance projects that have a revenue stream to support them. The income generated by the revenue stream pays the interest and principal on the bonds. Recently, the City of Berkeley issued a \$34 million revenue bond backed by Parking Meter revenue with a coverage ratio of 2.55. See Fig. 15.

In contrast to Berkeley, which issues mostly GO-bonds, EBMUD issues all of its debt as revenue bonds. With a revenue stream of ~\$100 million, EBMUD’s Wastewater (WW) system supports ~\$400 million in bond debt, while maintaining a AAA bond rating from Standard & Poors.

Berkeley has a number of Enterprise Funds that provide services that generate revenue streams (~\$100 million) comparable to EBMUD’s WW system. If the cash generated by all of the COB’s Enterprise funds could generate a similar coverage ratio to the Center Street Garage, then Berkeley may be able to carry ~\$350 million in revenue bond debt, compared to the current \$60 million.

Fig. 15 shows a comparison of the revenues and bond debt for the COB and EBMUD’s WW system.

Major Maintenance and Annual Capital Needs

The majority of the San Francisco’s ongoing annual capital needs are funded with General Fund dollars. These are typically smaller investments to maintain facilities and infrastructure in a good state. The two largest categories are Street Resurfacing and Facility Renewal.

Fig. 16 San Francisco’s Capital Plan General Fund Debt Program: FYs2017-27.

As Fig. 4 shows, SF dedicates 3.25% of GF revenues to its Pay-As-You-Go Program. Over time as the GF increases, the capital contributions increase, which allows staff to plan on a 10-year timescale. Berkeley has a similar program that assigns the “excess revenue” from the Transfer Tax over \$12.5 Million to its Capital Improvement Fund. Because the Transfer Tax is volatile, long range planning is difficult. Unfunded Liabilities and the General Fund Surpluses The City’s two major unfunded liabilities are tied to infrastructure, \$882 million, and benefits, \$665 million.

In response to the \$665 million benefits unfunded liability, in the City plans to dramatically increase its spending on benefits to almost \$116 million in 2020.

To adequately address the \$882 million in infrastructure unfunded liabilities, the City needs to double its projected spending from \$33 million to \$66 million in 2020. Some possible sources of this new funding are:

• Develop a 10-Year Capital Funding Plan & Major Project Queue.
• Increase capital funding from General Fund
        ▪ Lower the one-time revenue cap from \\$12.5 million to \\$8.5 million which would provide an increase in Capital funding of \\$4 million annually.
        ▪ Replace the Transfer Tax funding of capital/maintenance with a 5% tax of Total GF revenue.
• Assigning up to 50% of the annual salary savings to fund capital and maintenance needs.
• Designate “unclaimed” Seismic/Resilience Rebates to an Infrastructure Reserve Fund.
• Designate GF surpluses to the two major City Unfunded Liabilities – split 50/50.
• Put a measure on the 2022 ballot to issue a new infrastructure bond.

Recently, Berkeley voters have demostrated that they strong support increasing infrastrucutre spending, by approving \$130 million of General Obligation bonds (Measure M & T1) by overwhelming margins. To better align its priorities with the mandate from the voters, the City needs to dedicate more of its existing revenue streams to address this major unfunded liability. Failure to provide funding to maintain and modernize existing infrastructure will greatly increase the future cost due inflation and the increase in construction costs, which is currently running at 5% per annum.

New Development as a Source of Infrastructure Funding During the next quarter century, new development will continue across the City. All of these developments increase the city’s tax base, but some may lead to the need for infrastructure upgrades.

A key tool used in San Francisco was the imposition of a Community Services District only for upzoned properties and only imposed on the increment of additional density granted. As an example, if the city were to provide further upzoning in downtown or in the southside, that additional development envelope would be allowed only if the property owners agreed to create a districtwide Community Services District. The CSD could then fund additional infrastructure needs or other public benefits to accrued to the district – these can include green infrastructure, wider sidewalks, better streetlights, or even new parks. In addition, the district can fund the maintenance of some of these assets, providing a source of both capital and operating funds. The CSD requires a study and nexus of benefits to the district and creates a rate (based on the ad valorem value) of the development subject to the tax.

Other funding tools include a financing successor to redevelopment – the Enhanced Infrastructure Financing District. In this district, tax increment from some of the taxing agencies is pledged to the district, which then issues bonds for infrastructure improvements. Berkeley could pledge its own tax increments under this arrangement to provide another financing mechanism.

Hazards of Greatest Concern

Earthquake

We do not know when the next major earthquake will strike Berkeley. The United States Geological Survey states that there is a 72% probability of one or more M 6.7 or greater earthquakes from 2014 to 2043 in the San Francisco Bay Region. There is a 33% chance that a 6.7 or greater will occur on the Hayward fault system between 2014 and 2043. This means that many Berkeley residents are likely to experience a severe earthquake in their lifetime.

A catastrophic earthquake on the Hayward Fault would cause severe and violent shaking and three types of ground failure in Berkeley. Surface fault rupture could occur in the Berkeley hills along the fault, damaging utilities and gas lines that cross the fault. Landslides are expected in the Berkeley hills during the next earthquake, particularly if the earthquake occurs during the rainy winter months. Landslide movement could range from a few inches to tens of feet. Ground surface displacements as small as a few inches are enough to break typical foundations. Liquefaction is very likely in the westernmost parts of the city and could occur in much of the Berkeley flats. Liquefaction can destroy pavements and dislodge foundations.

Shaking and ground failure is likely to create impacts that ignite post-earthquake fires. Firefighting will be simultaneously challenged due to broken water mains and damage to electrical, transportation, and communication infrastructure.

In a 6.9 magnitude earthquake on the Hayward Fault, the City estimates that over 600 buildings in Berkeley will be completely destroyed and over 20,000 more will be damaged. One thousand to 4,000 families may need temporary shelter. Depending on the disaster scenario, one hundred people could be killed in Berkeley alone, and many more would be injured. Commercial buildings, utilities, and public roads will be disabled or destroyed. This plan estimates that building damage in Berkeley alone could exceed \$2 billion, out of a multi-billion dollar regional loss, with losses to business activities and infrastructure adding to this figure.

Low-income housing units are expected to be damaged at a higher rate than other residences. Other types of housing, such as condominiums, may replace them when land owners rebuild. This could lead to profound demographic shifts in Berkeley.

Wildland-Urban Interface Fire

Berkeley is vulnerable to a wind-driven fire starting along the city’s eastern border. The fire risk facing the people and properties in the eastern hills is compounded by the area’s mountainous topography, limited water supply, minimal access and egress routes, and location, overlaid upon the Hayward Fault. Berkeley’s flatlands are also exposed to a fire that spreads west from the hills. The flatlands are densely-covered with old wooden buildings housing low-income and vulnerable populations, including isolated seniors, people with disabilities, and students.

The high risk of wildland-urban interface (WUI) fire in Berkeley was clearly demonstrated in the 1991 Tunnel Fire, which destroyed 62 homes in Berkeley and more than 3,000 in Oakland. In 1923, an even more devastating fire burned through Berkeley. It began in the open lands of Wildcat Canyon to the northeast and, swept by a hot September wind, penetrated residential north Berkeley and destroyed nearly 600 structures, including homes, apartments, fraternities and sororities, a church, a fire station and a library. The fire burned downhill all the way to Shattuck Avenue in central Berkeley.

If a fire occurred today that burned the same area, the loss to structures would be in the billions of dollars. Destruction of contents in all of the homes and businesses burned would add hundreds of millions of dollars to fire losses. Efforts to stabilize hillsides after the fire to prevent massive landslides would also add costs. Depending on the speed of the fire spread, lives of Berkeley residents could also be lost. Many established small businesses, homes, and multi-family apartment buildings, particularly student housing, would be completely destroyed, changing the character of Berkeley forever.

Catastrophic Reserve

Berkeley Catastrophic Reserve was established to sustain General Fund Operations in the case of a public emergency such as a natural disaster. Currently, this reserve fund totals \$13 million. Since the City’s monthly expenditures are ~\$39 million, \$13 million is clearly inadequate to fund the City’s response to a major earthquake or wildfire.

The City does have a large pool of liquid funds in its Investment Portfolio, which as of December 31, 2018 contained at \$446 million in Total Cash and Investments. Several employee trust funds contain ~\$45 million and the balance of \$401 million consists of unspent fund balances, bond proceeds, additional reserves, and operating cash. While ~\$80 million originated from the General Fund and presumably could be redirected to funding the City’s emergency response to a major disaster, the \$320 million balance originated from the City’s numerous other funds which have legal strictures on allowable expenditures.

To secure more adequate liquid funds to address a major disaster, we recommend that the City

• Consider designating its Investment Portfolio as a Major Disaster Reserve.

Implement for the Future

When the proper approvals have been made, Berkeley will embark on a large and long-term process to plan, design, build, and maintain improvements to our infrastructure. This will go far beyond the magnitude of our current CIP and of the Measure T1 program. How to implement to program will require careful evaluation and discussions. The following suggestions are provided to get the discussion started.

Use a Program Approach

With an infrastructure program that will approach \$1 billion, it will be necessary to prioritize the work in phases. Phase 1 is the current Measure T1 program. Subsequent phases will depend on the priority of the work, whether planning has been started, community input, and the overall ability to implement the work. Table 5 is a suggested five phase program.

A Program Plan should be written and available to City staff and the community.

Develop organizational capacity and structure

Capital infrastructure work is primarily carried out by the Planning, Public Works, Parks and Recreation, and Budget and Finance departments. The work involves planners, engineers, construction managers, procurement specialists, contracts, and other people. All of these capabilities are in place to carry out the City’s CIP. When the Measure T1 program was initiated, a special program team was organized. They have dedicated staff and utilize support from other parts of the City.

The proposed infrastructure program is much larger than can be handled by the current staff or organization. We suggest that the City consider the following topics.

Organizational structure – We recommend that an infrastructure program department be created in the City’s organization. This would be separate from the day-to-day operations of public works and parks and recreation. There should be core competencies in the department, such as planning, design, construction management, and schedule and cost management. Other departments, such as procurement, legal, field operations, etc. shall provide support. To ensure that work is coordinated throughout the City, there should be a management oversight committee.

Staff capabilities – We recommend that additional staff be hired. The number of staff and their expertise needs further evaluation. Staff will be required in the current public works and parks and recreation departments to prepare master plans and to create an asset management program. Staff will be required in the new infrastructure program department.

Use of consultants – We recommend that the program team be a blend of City staff and consultants. It is a cost-effective way to retain knowledge while gaining expertise. This blended approach has been used effectively in San Francisco, San Jose, and other major infrastructure programs.

Develop program management tools and processes

We recommend that a Program Plan be written. The Plan should include the following:

    • Outcome objectives
    • Breakdown structure of work activities
    • Project team and responsibilities
    • Cost and schedule tracking
    • Change management and approval process
    • Reporting

To effectively carry out the program, the project team will need many tools, including the following.

    • A cost accounting system that will be able to track and report on labor, materials, and consultant costs according to a work breakdown structure.
    • A website to communicate with the public.
    • Document management
    • Risk management
    • Cost estimating
    • Scheduling
    • Procurement

Utilize independent oversight and reporting

We talk a lot about having transparency and accountability with City programs and good way to ensure that is to have independent oversight and reporting. The concept is to appoint a citizen’s oversight committee comprised of people with relevant experience. The committee would meet quarterly and prepare an annual report of progress compared to the Program Plan. The concept has been used effectively by the Berkeley Unified School District and other agencies in the Bay Area.

Exciting Projects Ahead

The environmental trends and technology advances are opportunities to create exciting projects for our future. How will these apply to Berkeley? The following suggests new solutions to old problems.

Table 3

The following illustrates how the new solutions can be applied.

Develop micro-grids

– Develop a micro-grid network connecting both public and private facilities. In order to accommodate more distributed renewable generation, and to foster more resilience and reliability, the City’s electricity distribution grid infrastructure will need to identify and increase “hosting capacity” for distributed energy resources and allow for two-way flows of energy.

Safe and sustainable transportation – The City has direct control over its vehicle fleets, including emergency services vehicles and charging facilities on Municipal Property. Through a “safe streets” lens and its plan implementation (Paving Plan, BeST Plan, Vision Zero, etc.) it can switch to more durable permeable pavement, add protected bicycle and pedestrian pathways, create more public transportation hubs and services and generally deprioritize private traffic and parking.

Electrify buildings – Along with transportation, buildings account for the bulk of energy consumption in Berkeley, historically both gas and electricity. Vision 2050 requires that all building loads be electrified. These electrified buildings have the potential to provide critical services to the distribution system, including demand response, peak load shifting and management, and even voltage and frequency regulation. Most of these opportunities will be determined at the state or market level by the CPUC and utility providers, but the actual conversion of the building systems and end-uses are subject to City oversight and influence.

Title 24 already encourages conversion to heat pump technology for water heating and HVAC, as well as encouraging efficient appliances, lighting and building envelope requirements. Berkeley should consider additional incentives or streamlining to encourage more rapid adoption.

Title 24 also requires solar on all new construction and major retrofits. Berkeley can further ensure that all buildings have sufficient and appropriate solar generation through its zoning and permitting ordinances and through targeted incentives, tax exemptions and application streamlining.

Use electric vehicles – To meet climate targets by 2050, personal transport will need to be electrified - move off of fuel to decarbonized electricity. Much of the capital investment will be market driven as consumers decide to purchase or procure electric vehicles. From an Energy Services perspective, this shift requires that multiple charging modes are available to facilitate efficient “fueling” of the vehicles. In addition, vehicle fleets and services, like buses, TNCs, police, fire and emergency vehicles subject to approval by the City must be converted to all-electric in a timely and orderly manner.

City plans must identify and develop locations for publicly accessible grid-connected and powered Level I, Level II and DC-fast charge facilities, with sufficient geographic diversity and capacity to serve Berkeley residents regardless of income or neighborhood. This means that curbside charging may be necessary in many dense multifamily neighborhoods. Heavy duty charging facilities for public transit and city fleets, as well as facilities for electric bikes, scooters and other mobility options must be incorporated into planning. This will require enhanced permitting guidelines, standards and possibly incentives, as well as allowances for new business models.

Prioritize safe access for pedestrians, bikers, low cost widely available zero carbon public transit fleets, EV charging, and on-demand services for seniors and youth. The City must continue to encourage and support (for example, through streamlined permitting processes) at-home vehicle charging. A clarified policy on single-family homes without access to off-street parking must be developed so that charging stanchions and plugs can be properly and safely installed at or near the public-right-of-way. Incentives will also play a part, particularly for disadvantaged communities in Berkeley. Leveraging its permitting authority, the City can encourage more widespread deployment of both public and private charging infrastructure, not just for cars, but for buses, bikes and scooters as well. Tapping into the use of vehicle transponders and street sensors is also recommended.

Use green infrastructure – Integrate multi-benefit Green Infrastructure as an element in all Public Works projects. As noted, Green Infrastructure is one of the best examples of resilience in practice. Move beyond compliance in implementation of the Green Infrastructure Plan.

Dig once– Perform all street rehabilitation in coordination with utility, sewer, water runoff, and undergrounding projects. Use the underlying infrastructure condition as a factor in paving project selection and prioritization.

Consider material life cycle – Incorporate material life cycle with waste reduction and material reuse. Utilize recycling as a last resort in all project specifications. Address external benefits and costs in project design.

Diversify water supply – Innovate to diversify Berkeley’s water supply. Examine the use of groundwater for landscape or backup water supply. Participate in the EBMUD/Hayward Sustainable Groundwater Plan development process. Investments in cisterns installed in street storm water management projects should include water retention and use. Work with EBMUD and UCB to bring reclaimed water distribution to Berkeley.

Restore Nature as infrastructure – Nature can be the first line of defense integrated into engineered solutions within the urban landscape. Natural systems can provide protection, adaptation and mitigation to climate impacts. In addition to the recommendations in the Resilience Strategy, the City must increase tree canopy in the mid and low lands to address air quality, heat impacts and quality of life as we continue to build. Trees and marshes should be factored into carbon capture calculations as we move to 2045 carbon neutrality. Use of native trees and plants will improve urban habitat. Plantings along transportation corridors in coordination with adjacent cities will ensure migration paths for birds and pollinators. As elements of all Marina projects, develop, enhance and continue restoration of marshland along the Bayfront to stabilize the shoreline against sea level rise, capture sediment runoff and provide habitat. Marsh vegetation is the most effective vegetative carbon sequestration planting.

Preserve permeability – Incorporate climate impacts into all public infrastructure projects. With increasing private property development much of the City’s remaining permeability is being paved over with hardscape and buildings. An assessment of the current level of impermeability should be made to ensure that the storm water infiltration levels do not further degrade with continued development. To maintain current levels of infiltration, the City should ensure that equivalent land areas within the public commons are made permeable to offset all private property development of impermeable surfaces and specific GI. Future GI and Watershed Management Plans should move the City to restoration of infiltration in keeping with future Sustainable Groundwater Management Plans.