SunnyvaleRTC

January 13, 2004

SUBJECT: 2004 INTERGOVERNMENTAL RELATIONS PRIORITES AND LEGISLATIVE ACTION POLICIES

The Legislative Action Policies (LAP) are policies focusing on the City's legislative and intergovernmental concerns, and are used by Council and staff throughout the year to determine City positions on legislation and intergovernmental issues. This report includes a draft of the proposed 2004 Legislative Action Policies, which was reviewed by Council at the December 18 Study Issues Workshop.

The proposed intergovernmental relations priorities are also detailed in this report. The purpose of establishing City priorities is to focus proactive lobbying resources. For 2004, staff recommends four priorities:

fiscal reform;
homeland security;
Moffett Federal Airfield; and
adoption of the International Building Code.

Staff recommends six priority watch issues:

investment funding for workforce development;
telecommunications;
environmental issues;
transportation infrastructure and funding;
water transit; and
reducing the cost of doing business in California.

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.

EXISTING POLICY

Goal 7.3C: Participate in intergovernmental activities, including national, state and regional groups, in order to represent the City’s interests, influence policy and regulations, and enhance awareness.

Policy 7.3C.1: Represent adopted City policy in intergovernmental activities.

DISCUSSION

One of the primary goals of the City's intergovernmental relations program is to conduct legislative advocacy for City interests effectively and efficiently. To focus the City's limited advocacy resources, staff annually seeks direction from Council regarding priorities. Traditionally, staff has provided the following support on Council-identified priority areas (as defined in the Intergovernmental Priorities section below):

Research, monitor and track legislation -- Monitor pending legislation to identify bills that could significantly impact Sunnyvale. Staff conduct research on targeted legislation. Research activities range from web site research to contacting legislative analysts in government offices and city associations. Because the content and status of specific legislation can change rapidly, during "hot" periods significant staff time may be required to "keep up" with the progress or setbacks of pending legislation, which often changes on a daily, or even hourly basis.
Draft and distribute letters to elected officials and others as appropriate -- This process requires identifying which officials are best targets for lobbying efforts on pending legislation: committee chairs, regional or state elected officials, etc. Because legislation may impact the activities of several city departments, staff coordinates and communicates advocacy efforts accordingly. Because legislative activities and schedules can be unpredictable, effective advocacy efforts require that staff respond with reasonable expertise on short notice and within tight deadlines.
Develop talking points for Mayor for advocacy discussions -- The Mayor is the official spokesperson for the City and, depending on the importance of the bill and its potential impact, may be called upon to contact other elected officials to present Sunnyvale's concerns. Talking points developed by staff with relevant expertise include background on the legislation and potential specific impact on Sunnyvale.
Organize meetings with elected officials as needed or requested by Council -- These meetings are set up as needed to respond to issues of great concern and potential impact to Sunnyvale.

Active advocacy is not normally done in priority watch areas, because by definition no legislation has yet been developed. However, staff monitors information from appropriate professional organizations, city associations, and other sources to stay abreast of activities in the priority watch areas. Should legislation begin to be developed, the area moves from the priority watch category to the priority category.

It is important to note that the priority and priority watch areas identified in this RTC do not fully represent the full spectrum of issues worthy of the City's attention. Staff also conducts limited advocacy in other areas as appropriate and as identified in the LAP. In addition, as the year unfolds new issues may arise, often for reasons external to the City, which require advocacy. As these issues arise, staff presents them to Council for direction.

Legislative Action Policies (LAP)

The recommended 2004 Legislative Action Policies are identified in Attachment A. If approved by Council, the LAP will be inserted into Council’s Legislative Policy Manual as current Council policy (7.3.14). The purpose of the LAP is to identify Council-adopted policies regarding external and/or legislative matters. The Council-approved LAP eliminates the need for staff to request review and approval from Council on each issue as it comes up during the year. These policies are also utilized to assist Councilmembers and staff in carrying out intergovernmental duties.

To prepare the annual LAP update, staff reviews City policies in November, and recommends changes subject to Council direction in January. Recommended changes include such items as: addition of Council actions; deletion of policies that are no longer relevant; identification of current issues where new policy statements are deemed appropriate; clarifications and simplifications. Examples of new policies include those that result from Council action regarding positions on ballot measures, League of California Cities (LCC) resolutions, and National League of Cities (NLC) resolutions. Policy statements recommended by staff are often more general than specific Council policy actions, since the general statements are more useful in dealing with the wide array of intergovernmental matters that arise each year.

Intergovernmental Priorities

To ensure the best use of limited staff resources, the City designates two special categories for legislative advocacy: intergovernmental priority and priority watch. Intergovernmental priority areas are those "hot" areas where legislative activity is either already underway or imminent within the upcoming calendar year, and where the pending legislation is expected to have significant impact on the City of Sunnyvale. Priority watch areas are those areas that staff believes legislation may be coming, but no specific legislation has yet been identified. As with priority areas, the priority watch areas are also areas where legislative activity could have a significant impact on the City of Sunnyvale.

Staff has identified four priority areas for 2004:

1. Fiscal Reform

In recent decades, court decisions, state legislative actions, and voter-approved initiatives have greatly reduced municipal control over local discretionary revenues and expenditures. State budget shortfalls in the early 1990s produced the revenue shift know as the Educational Revenue Augmentation Fund, or ERAF, which shifted additional property tax revenue from city coffers to fund state-mandated education. The annual impact to Sunnyvale of ERAF is now more than $7 million annually and growing. Given the State’s massive structural budget imbalance, local governments are again facing major diversions of locally controlled revenue sources, as well as significant unfunded mandates through increased service demands. One such diversion is the Vehicle License Fee (VLF) which the State is obligated to backfill to cities. In FY 2003/2004 Sunnyvale has already lost approximately $2 million in VLF backfill revenue, but this figure can easily go higher as the State looks for ways to close its budget gap.

It is extremely important that local governments and their coalitions vigorously defend any attempts by the State to further erode our ability to exercise control over our revenue sources, whether through reductions, reallocations, redistributions or diversions. It is equally important to oppose any efforts by the State to delay constitutionally required reimbursements to local governments for state-mandated programs, or to reduce revenues the State shares with cities. For example, the State has “deferred” over $1 billion in reimbursements of mandated costs to local governments over the past two fiscal years, with more deferrals expected. To this end, the City will work in cooperative agreement with the League of California Cities and others to support fundamental reform that includes, among other things, constitutional protection for local revenues. The biggest component of this reform is the Local Taxpayers and Public Safety Protection Act, a proposed ballot measure for the November 2004 statewide election that seeks to constitutionally protect local governments from future state money grabs. If passed by voters, this ballot measure will require a majority vote of the electorate before the State can take local revenues, and will afford greater protection for the timely reimbursement of state mandated costs to local governments.

2. Homeland Security

The Department of Homeland Security was established in 2002. Its primary mission is to prevent terrorist attacks within the United States, reduce the vulnerability of the United States and minimize the damage, and assist in the recovery from terrorist attacks that do occur within the United States.

Federal funding for Homeland Security comes to Santa Clara County and then to the City based on population. Specific City issues for 2004 include:

maintaining ongoing funding to address terrorist activities;
increasing funding for technology enhancements, equipment and staff training including “back fill” funding while staff is involved in training;
maximizing the funding available at the local level; and
supporting a threat-based approach to funding.

Without funding, the City will have limited response capabilities should a major event occur locally or in the region; therefore, endangering lives and property within our community and the surrounding area.

Currently there are more than fifty pieces of federal legislation related to Homeland Security. All legislation will not require our advocacy efforts; however, it will be in the City’s best interest to support major legislation related to ongoing funding, increased resources for technology, equipment and staff training while opposing legislation that would divert funding away from cities.

Homeland Security was identified as an Intergovernmental Relations Priority for 2003. Consistent with that designation, the Department of Public Safety completed a threat assessment of the City that identified additional critical sites and the information was shared with all internal operations bureaus and Santa Clara County. The Department of Public Safety requested and received approval for $52,000 worth of equipment for terrorism response through Santa Clara County.

3. Moffett Federal Airfield

During the past year, working in partnership with NASA and the City of Mountain View, Sunnyvale has focused efforts on advocating against the potential relocation of the 129^th Rescue Wing, and protecting the airfield as a secure Federal airfield.

Despite these efforts, the 129^th Rescue Wing continues to consider relocation from Moffett Federal Airfield to Castle Air Force Base in Atwater, California. Relocation would be a great loss to the community, and the unique capabilities of the 129^th Rescue Wing are vital to supporting the mission of the Air National Guard in the Bay Area. The City of San Jose continues to be interested in having greater access to Moffett, either using it as a reliever airport, or as a civilian or commercial airport, should it no longer be federally secured. Given the runway constraints of the Bay Area's airports, continued attention needs to be focused on protecting the existing status of the airfield.

4. Adoption of the International Building Code

California has always utilized the International Building Code, and 44 other states have already adopted the 2000 edition. In July 2003 the Building Standards Commission approved the adoption of the National Fire Protection Association (NFPA) 5000 building code. However, since the recall election, this decision is on hold and will hopefully be reversed.

Adoption of the alternative code proposed by the NFPA would bring confusion, delay and increased cost to the building industry and to local governments in California. Direct fiscal impacts will include significantly higher costs for training and codebook purchases. It will also increase the costs of doing business in California, acting as a further deterrent to business development in California cities.

Priority Watch Issues

Staff has identified six priority watch areas for 2004:

1. Investment Funding for Workforce Development

Financial resources from the federal and state levels for workforce development/education and training programs is critical for the reemployment of thousands of dislocated workers, locally, and the economic sustainability of this community. Given the current financial climate at the federal and state levels, funding for workforce development is particularly vulnerable in 2004 and could potentially threaten the very survival of these local and critical programs.

2. Telecommunications

Changes in the telecommunications industry continue to be of vital concern to the City. Ongoing issues include: 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.

3. Environmental Issues

State and federal environmental issues continue to have potentially significant impacts on the City. 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; water pollution control NPDES permit regulation; flood control issues; energy deregulation (or re-regulation); and clean air regulations.

The City supports LCC and NLC suggested modification of the Federal Clean Water Act to limit frivolous lawsuits designed for personal gain. Also supported are provision of discharge permits that are attainable and reflect local conditions and circumstances. Policies by Regional Water Quality Boards should recognize the goals of the Clean Water Act but apply an appropriate standard based on local circumstances.

The salt pond conversion project is ongoing and needs to be watched carefully, due to its proximity to the Water Pollution Control Plant, and in order to address other City interests. The South Bay environmental impact of San Francisco International Airport’s proposed runway extension also need to be closely watched.

4. Transportation Infrastructure and Funding

Infrastructure

Protection and stabilization of transportation infrastructure funding sources continues to be a critical issue in 2004.

Sunnyvale has developed an excellent transportation infrastructure, but regional and local growth and the passage of time put continual strain on capacity and maintenance needs. The League of California Cities identified transportation investment as a priority to ensure a stable transportation finance structure for state and local governments. Support for all modes of transportation enhances livable local communities, balances housing and jobs, and supports economic development.

The key legislative issues are protection and stabilization of transportation funding including sales tax funds and other previously earmarked transportation funding and legislation. Transportation funds have proven especially vulnerable during economic downturns.

Transportation sales tax funds are a primary source of capital improvement and transit operations. Proposition 42 which was approved by voters in March, dedicated all gasoline sales tax revenue for transportation purposes, but this measure is being subjected to debate and legislative manipulation.
State transportation funding sources must be protected from transfers to non-transportation needs. The Transportation Development Act is an example of legislation that continues to be vulnerable given the budget realities at the State level. Recent proposals by the Governor’s office make clear that virtually all transportation infrastructure funding should be considered highly vulnerable to transfers for State budget relief needs.

Finally, pending smart growth legislation will also have a significant impact on transportation improvement priorities. The concept of coordinating land use and transportation decisions permeates through all layers of government. Ensuring that all perspectives, local sub-regional, regional, and statewide, are taken into consideration and balanced is critical to the success of any initiative in this area.

Funding

The transportation funding arena as a whole (roadway improvements, infrastructure maintenance, transit expansion, transit operations, alternative transportation initiatives) is a highly dynamic area requiring constant vigilance. Currently, at least two major initiatives will warrant closer monitoring as they develop.

At the federal level, federal transportation funding re-authorization is now overdue, with Congress having approved a bridge bill and full re-authorization not anticipated until 2005-05. The level of funding authorization affects the City and Santa Clara County in many ways, from the availability of matching funds for major roadway and transit projects, to roadway maintenance funding, to operations of Caltrain service. Special programs or provisions of federal funding laws can directly affect the City's implementation of transportation projects and programs.

Locally, Sunnyvale's local transit service provider, the Santa Clara Valley Transportation Authority, has a major shortfall in its operating funding that has been exacerbated by overcapitalization. Pressure will exist to continue to fund growth of the system, primarily expansion of BART to Santa Clara County, while maintaining as lean an operation as possible. Reconfiguration of service and imposition of new funding mechanisms both have the potential to have significant local effects.

5. Water Transit

The California Sate Legislature has approved the Water Transit Authority's proposed plan for expanded Water Transit services, and the agency now moves into capital planning and funding mode. A ballot measure in March will propose increasing the toll on the region's seven state-run toll bridges to $3 to fund initial water transit projects throughout the Bay Area. This issue needs to be fully tracked by the City as it affects the potential for new water transit services to Sunnyvale.

6. Reducing Cost of Doing Business in California

The cost of doing business in California has been a deterrent to business development and the creation of new jobs. California, and especially the Bay Area, is not seeing the same rebound from the economic downturn as other parts of the country. Other states are actively comparing their costs to that of California as a marketing tool to lure companies from California to their states.

During the campaign, Governor Schwarzenegger stated that he would take actions to reduce the cost of doing business in California, improve the state's business climate and promote California as a good place to do business. This includes workers compensation insurance and government regulations negatively impacting business. While this legislation has not yet been introduced, it is anticipated that it will be introduced at any time.

Summary

Staff is recommending focusing the IGR strategy on fiscal reform; homeland security; Moffett Federal Airfield; and adoption of the International Building Code.

This list of issues is not exhaustive and it may be appropriate for Council to modify the issues and strategies as needed throughout the year. It is also understood that the priority areas are not the exclusive areas of staff's intergovernmental attention. This list does not fully represent the spectrum of issues worthy of the City's attention. Instead, the list is designed for purposeful and focused action. The prioritization should serve to keep the Council and staff focused on the City's designated high priority issues given limited staffing resources.

FISCAL IMPACT

There is no fiscal impact related to this report.

PUBLIC CONTACT

Public contact was made through posting of the Council agenda on the City's official notice bulletin board, posting of the agenda and report on the City's web page, publication of the Council agenda in the San Jose Mercury News, and the availability of the report at the Library and the City Clerk's Office.

ALTERNATIVES

1. Approve the legislative action policies and the intergovernmental priorities as proposed.

2. Modify the legislative action policies and/or the intergovernmental priorities as proposed.

3. Other action as directed by Council.

RECOMMENDATION

Staff recommends Alternative #1.

Prepared by:

Coryn Campbell
Intergovernmental Relations Manager

Reviewed by:

Amy Chan
Acting City Manager

Attachments

A. Draft 2004 Legislative Action Policies (pdf format)