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January 25, 2000
SUBJECT: 2000 INTERGOVERNMENTAL RELATIONS PRIORITIES AND LEGISLATIVE ACTION POLICIES
REPORT IN BRIEF
The LAP (Attachment A) represents the adopted City policy on legislative matters and is used by Council and staff to determine City positions on legislation and other intergovernmental issues. The document before you represents an ongoing effort to revise and consolidate the LAP’s to make it more meaningful and user friendly.
The proposed 2000 intergovernmental relations priorities are detailed in this report. These priorities are identified to focus resources and target proactive lobbying efforts on the part of the City. For 2000, staff recommends a continued priority on two key issues: Intergovernmental Fiscal Relations and Moffett Federal Airfield, but with updated focuses.
Council reviewed the IGR Priorities and the LAP at the December Study Issues workshop. At Council’s direction, there was a priority watch issue added in the IGR priorities on Utility Deregulation and one change made to the LAP to delete a policy on campaign reform. One additional change on statistical sampling for the census was also made. Finally, staff has included information on the priority legislation that the City tracked in 1999 as well as the League of California Cities’ Voting Records report on key municipal legislation.
Staff recommends that Council approve the IGR priorities and the LAP as presented in the report and Attachment A.
EXISTING POLICY
GP Goal 7.3C: Participate in intergovernmental activities, including national, state and regional groups, in order to represent the City’s interest, influence policy and regulations, and enhance awareness.
Policy 7.3C.1: Represent adopted City policy in intergovernmental activities.
BACKGROUND
In 1982, the City Council adopted a procedure for establishing external legislative policies based on four primary components:
- National and municipal policies and resolutions
- League of California Cities' resolutions
- Review of state and federal budgets
- City-adopted General Plan policies and specific legislative policies
This intergovernmental relations procedure provides an opportunity for the City Council to review and update its external legislative policy positions at the Council Study Issues Workshop in December of each year and then take final action in January. The timing is useful because it comes after the adoption of positions based on League of California Cities and the National League of Cities resolutions and concurrent with the reconvening of the State Legislature and Congress.
DISCUSSION
Legislative Action Policies
The external legislative policies are contained in the recommended "2000 Legislative Action Policies," which is Attachment A to this report. If approved by the Council in January, it will be inserted into the Council's Legislative Policy Manual as a current Council policy (7.3.14). The purpose of this document is to provide a reference of Council-adopted policies that relate to external and/or legislative matters. This information is used to guide staff in determining City positions on legislation and other external policy matters, eliminating the need for staff to have Council act on each and every issue as it comes up during the year. These policies are also utilized as tools to assist Councilmembers and staff in carrying out intergovernmental duties.
Staff generally reviews existing policies annually and recommends changes for Council consideration. Attachment A reflects the recommended changes such as: Council actions; deletion of policies that staff felt are no longer relevant; identification of current issues where new policy statements are deemed to be appropriate; clarifications and simplifications. Examples of new policies include those that result from taking positions on ballot measures, League of California Cities’ resolutions and National League of Cities resolutions. Policy statements recommended by staff are often more general than specific Council policy actions, as the general statements are more useful in dealing with the wide array of intergovernmental matters that arise each year.
At the Study Issues workshop, Council requested the deletion of a policy regarding campaign finance. One additional change can be found in Attachment A: it is recommended that a policy regarding using statistical sampling for the census be deleted, since this issue has already been addressed by the courts. This policy can be found on page 14.
Intergovernmental Relations Priorities
Each year, Council approves an intergovernmental relations strategy that singles out specific, high priority issues for Council and staff action. This is done to more effectively drive lobbying efforts, intergovernmental Council appointments/participation, and staff resources. The elements of the proposed IGR strategy attempt to address the following: What are the most important intergovernmental issues facing the City? On which issues might Council need to take a leadership role so as to favorably affect the outcome? On which issues is the outcome important to the achievement of General Plan goals and policies? How might the Council best position its members on intergovernmental bodies to influence the most important issues? These issues and questions have been used in identifying areas for emphasis. The intent of this IGR priority-setting process is also to select issues with a multi-year perspective in mind. Another factor in choosing priorities is to determine where the use of resources is likely to be most effective.
For 2000, staff recommends that Council maintain the same priorities as in 1999: Intergovernmental Fiscal Relations and Moffett Federal Complex. However, the suggested focus within them has been revised to reflect more current issues. In addition to the IGR Priorities presented at the December Study Issues workshop, an additional priority item section has been added on Utility Deregulation. Below is a brief summary of the proposed high priority issues for 2000.
1. Intergovernmental Fiscal Relations
State: State budget shortfalls earlier this decade resulted in budget and appropriations bills negatively impacting local revenues. In 1991, the state allowed county governments to charge cities for prisoner booking and the collection of property taxes. Budget balancing tactics have also included a 50% loss in moving violation citation revenue and cigarette tax revenue. In 1992, the state's extreme fiscal situation resulted in cities losing $200 million in property tax revenue to the state. This, and other actions by the state, amounted to almost $2 million in City revenue being lost. In 1993, the story was similar: cities statewide lost $288 million in property tax revenue and Sunnyvale again lost approximately $2 million. Although cities have not suffered takeaways in recent years, the cumulative annual impact of state actions is now over $5 million. In 1998, even with large state budget surplus, cities had to fight to protect losing additional revenues from the Vehicle License Fee. In 1999, cities received some modest relief from the state.
Court decisions, legislative actions and voter initiatives have greatly reduced municipal control over local budgets. Structural problems with the state/local fiscal relationship still exist and although the state currently has a surplus, the potential for problems will continue until the structural issues are addressed. As such, the State budget and legislative process requires close monitoring to minimize harmful impacts.
Some specific areas that will require City attention in the coming year include the following areas:
Cities will need to be proactive in reforming the state-local fiscal relationship and finding long-term protected and predictable revenue sources. Several initiatives were undertaken in 1999, but no action or resolution occurred. There will be continued attention to this issue in 2000.
Federal: For the past few years, Congress has been interested in turning over program responsibilities to the states (as they have already done for welfare). The impacts of this devolution will continue to be a focus for the City. What these federal actions will do to state finances and then how the state will then deal with local government is very much in question. In addition, programs that the City participates directly with the federal government, such as Community Development Block Grants and NOVA job training grants, could be cut or altered in design. This is an area the City will have to continue to monitor and take proactive steps to ensure our voice is heard.
The potential for unfunded mandates still exists and the City will have to fight against them. Another priority issue will be following the discussions of the commission looking at internet and mail-order tax issues. Sunnyvale has been a lead player in state and even federal efforts to reach a reasonable solution to the internet tax issue.
Finally, a battle over requiring Social Security for local government employees is still possible. This idea is seen by some as a solution to the structural problems of the Social Security Trust Fund and it is anticipated that proposals will be made to require Social Security for local employees. It is estimated that covering just new hires for the first year would cost the City more than $200,000.
2. Moffett Federal Complex
Last year, Council and staff spent considerable time focusing the City’s policies and priorities for the Moffett Federal Complex. Council identified three priority issues: the California Air Guard Hanger, The Western Disaster Center, and the NASA MOU/Partnership Issues:
Of these issues, the first one is now complete and Council has eliminated the second as a priority. On the third issue, the MOU has been abandoned, but ongoing cooperation in the issue areas continues.
For 2000, staff recommends continued focus on the areas of partnership with Mountain View and NASA including the emerging development plans. Staff also recommends attention to the effort to gain support for Moffett as a resource in the fight against weapons of mass destruction, as outlined previously for Council. This is not intended to be an comprehensive list of all Moffett items that will be worked on. In addition to these specific items, the overall goal of maintaining Moffett as a viable federal facility must always be kept in sight. With this overall goal in mind, specific strategies, tactics and even priorities may need to be modified as circumstances change.
The following is a brief summary of the proposed priority watch issues for 2000.
1. Environmental Issues
Major environmental issues continue to be important, particularly in Washington. Monitoring efforts will include issues such as solid waste/recycling and non-point source discharge legislation and regulations; hazardous materials regulations; regulations which facilitate clean-up of toxic sites; and water pollution control NPDES permit regulation. Also, efforts to "fix" the flow control issue could impact our ability to direct solid waste to the SMaRT Station.
2. Telecommunications Issues
Rapid changes in the telecommunications world require attention by the City. Concerns for the City included: ensuring public benefit access, providing local governments with the ability to adequately protect the public infrastructure, sufficient band-width for public safety purposes, and allowing cities to be compensated for the private use of the public right-of-way by all telecommunications providers. With internet taxation legislation recently enacted, attention will turn to the commission created by it. Electronic commerce is growing rapidly and the ability to receive sales and use taxes for purchases made electronically will be a key issue.
3. Utility Deregulation
A transformation of California’s electric power market is in progress. All of the key elements of this restructure have been put in place. However, opportunities for significant energy savings in the current market are very limited because only a portion of the standard utility bill (25%) is eligible for reduction. The remaining portions of the electric bill are fixed until after March 2002, when full deregulation is expected to further reduce rates. At that time, it is expected that PG&E will need to drop its rates in order to stay competitive with the marketplace. As a result, the City should see substantial decreases in its electric bills, consistent with competitive market rates, even if the City does not change service providers. However, a fully deregulated energy market is expected to offer major savings primarily to customers with large energy loads therefore, some cities are attempting to aggregate residents and small businesses through creation of "Community Choice" pools. Federal legislation has been introduced to allow local governments the right to serve as non-profit aggregators of electrical services. Staff recommends a "wait and see" approach so as not lock into long term contracts until more information is available. In the meanwhile, staff will continue to track developments in the electric market, including community choice options, and recommend changes as appropriate.
Summary
Staff is recommending focusing the IGR strategy on fiscal and Moffett Complex-related issues as areas of high-priority. Staff recognizes that this list of issues is not exhaustive and that it is appropriate for Council to modify the issues and strategies as needed. It is also realized that the priority areas are not the exclusive areas of intergovernmental attention. In fact, this list does not fully represent the spectrum of issues worthy of the City's attention. Instead the list has been specified for purposeful, focused action. Staff will continue to review and take positions on legislation in other areas, in accordance with established Council policies. In some ways, the priority list might afford the Council and staff the same discipline as that provided through the Council Study Calendar. This prioritization may serve to keep the Council and staff focused on the high priority issues identified above.
One measure of the effectiveness of our Intergovernmental Relations program is the degree that our legislators vote the way the City would like them to. To assess this, a copy of the Quarterly Legislative Report to Council is attached (Attachment B). Staff has prepared a summary of the votes of our state legislators (Attachment C) and has also included a copy of the League of California Cities’ 1999 Legislative Voting Records report (Attachment D). Copies of this report and attachments will be sent to our legislators, so they have a better sense of the City’s priorities for 2000 and how they voted on key issues of concern in 1999.
FISCAL IMPACT
There is no fiscal impact to this report.
PUBLIC CONTACT
Publication of the agenda. Reports are available in the Sunnyvale Library and on the Internet home page.
ALTERNATIVES
RECOMMENDATION
Staff recommends Council adopt alternative #1, approve the 2000 IGR priorities as noted in this report and the Legislative Action Policies as noted in Attachment A.
Prepared by:
Daniel Rich
Assistant to the City Manager
Reviewed by:
Amy Chan
Assistant City Manager
Approved by:
Robert S. LaSala
City Manager
Attachments
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