An Appeal to the SF PUC: Stormwater Funds Can Help Central Market

Capital Markets Fall 2011: Presidio Graduate School
This post is part of the capital markets open letter project by MBA students at Presidio Graduate School.

By John Lehnert

San Francisco is unique among California cities in having a combined stormwater runoff and sewer system. Stormwater surges can overload the system and send overflows to the San Francisco Bay with minimal treatment. One way to fix this is to minimize the stormwater flow: intercepting it before it hits the sewer system.

San Francisco’s Urban Watershed Management Program offers funds to help local communities manage this runoff. In so doing, this program can transform stormwater from an infrastructure burden to an ecological asset. A great opportunity is at hand to use this program funding: green rooftops in Central Market. Our Presidio Graduate School team – composed of MBA students in Sustainable Management — made this pitch recently to the SF Public Utilities Commission.

Green rooftops can capture and hold as much as 75 percent of rainwater deposited on the roofs of commercial and residential buildings throughout the neighborhood – potentially millions of square feet. Doing so reduces the load on the city’s combined stormwater and sewer systems. What makes green rooftops even more appealing are the additional benefits they provide: noise reduction, lower heating and cooling costs, mediation of the urban heat island effect, cleaner air, and the creation of habitats for native flora and fauna.

Such rooftops also support the objectives of a key neighborhood redevelopment program,  in the Central Market area: public realm enhancement (by creating additional open space), stabilization of the community (by using residents to build and maintain them), reduced vacancies (by increasing property attractiveness and value) and community capacity building (though collaboration).

The SFPUC  Watershed Stewardship Grant (WSG) program could play a critical role in financing green rooftop projects.  The financial markets are not well-positioned to assign value to the benefits we’ve noted; building owners, meanwhile, are unlikely to undertake such projects without a guiding authority. Public intervention by an agency such as the SFPUC is critical.

THE WSG program cannot, however, absorb the full cost — it requires matching funding. The local community may be challenged, however, to match funds, considering their economic situation. Overcoming this challenge requires creative thinking that transcends established practices—and exploring funding outside the community. We offered the SFPUC these possibilities to finance new projects:

  • Building owners could secure small business loans for property improvements
  • The state’s Clear Water Revolving Fund supports water quality projects, including stormwater management
  • RSF and Microplace use interest-bearing funds to support socially-conscious lending
  • The EPA lists resources for funding green infrastructure projects
  • The CA Department of Water Resources has an extensive list of relevant funding sources
  • The CPUC sponsored a study on policy changes to promote comparable projects
  • Community Development Financial Institutions could supplement other funding

Successful efforts in other major cities, most notably Chicago, offer relevant examples of successful green roof projects. Chicago’s City Hall installed a green roof that has saved the city $3,600 annually in energy costs. An entire industry association has emerged to execute these projects, so the technology and planning processes are well-defined—and adaptable for San Francisco.

Creating these plans is the responsibility of those seeking funds, of course; what is needed is the organizational capacity to do so. We believe a joint task force involving the SFPUC, the Central Market redevelopment leadership and the neighborhood’s citizen advisory committee could jump-start this effort. Other socially-conscious organizations could assist with funds and project execution, such as SF-based Liif.

Together, these stakeholders can be “market makers” for green rooftop projects and provide three critical elements to utilize your program: supplemental funding, unified oversight, and logistical support. We therefore proposed the SF PUC contact the SF Office of Economic & Workforce Development to:  establish the task force, fully research the funding options, identify appropriate properties, and enlist a partner organization to manage project finances and execution. With this holistic, collaborative approach, the WSG funding can be leveraged to bring economic, social and environmental benefits to a neighborhood poised for progress.

[Image credit: The Ardvaark, Flickr]

Prepared by Matt Dieden, Marcela Karpuj, John Lehnert, and Rachel Roberts

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