SunnyvaleRTC

October 19, 2004

SUBJECT: Positions on Eighteen State and Local Ballot Measures for the November 2004

Election

REPORT IN BRIEF
On October 5, 2004, City Council took positions on Propositions 1A and 65 and Measures J, L, O and P for the November 2004 election (see RTC#04-353: “Positions on Propositions 1A and 65, and Measures J, L, O and P for the November 2004 Election”). This report provides an opportunity for the City Council to take positions on the other eighteen measures on the November 2^nd ballot. The report summarizes each of these measures, provides the City’s adopted policy on the issues, the position of the League of California Cities [LCC] (if appropriate), and a staff recommendation. Generally, staff only recommends a position on a ballot measure if there is an existing City policy on the issue or significant impact on the City.

Staff recommends the following positions on the ballot measures discussed in this report:

Proposition 59: Support
Proposition 60: Support
Proposition 60A: Support
Proposition 61: Support
Proposition 62: Oppose
Proposition 63: Support
Proposition 64: Support
Proposition 66: Oppose
Proposition 67: No Position
Proposition 68: No Position
Proposition 69: Support
Proposition 70: No Position
Proposition 71: Support
Proposition 72: Oppose
Measure A: Support
Measure B: Support
Measure C: Oppose
Measure H: Support

BACKGROUND
Staff is providing this report to afford the City Council an opportunity to take a public stand on eighteen measures on the November 2^nd 2004 ballot. Staff’s recommendations are generally based on existing City policies from documents such as the General Plan and the Legislative Action Policies. Past positions of the Council also guide staff recommendations. New positions taken by the Council will become official policies of the City and will be added to the Legislative Action Policies.

EXISTING POLICY
Legislative Management Sub-element, 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.

Legislative Management Sub-element, Policy 7.3C.1: Represent adopted City policy in intergovernmental activities.

DISCUSSION

1. Proposition 59: Public Records, Open Meetings. Legislative Constitutional Amendment.

Summary: This is a constitutional amendment to give the public the right to access information concerning meetings and records of government bodies, officials and agencies as long as the constitutional rights of privacy and due process are protected.

Proponents: Proponents argue that California's government should be as transparent as possible to the public. However, too often officials and judges choose secrecy over disclosure. Proponents argue that Proposition 59 will make transparency a constitutional duty owed to the people, to whom officials are accountable. Proposition 59 ensures that private information about individuals will remain private.

Opponents: Opponents argue that Proposition 59 does not go far enough and its passage may prevent a stronger law from being enacted. Opponents also argue that the current level of government information available to the public is acceptable and does not require a constitutional amendment.

Staff analysis: The State Constitution does not address the public’s right to access government information (records and meetings). Approving this legislation places the burden on a government entity to demonstrate to a greater extent why information requested by the public should be withheld. There are state laws including the Public Records Act and the Brown Act that currently regulate access to public information. These laws provide for some exemptions including information relating to an individual’s personnel or medical privacy.

Proposition 59 will give the public access to government information and at the same time preserve rights to privacy. It requires that government decisions be broadly interpreted to expand public access. Future government actions that limit the right to access would have to be justified (with some exceptions such as law enforcement records).

Fiscal Impact: None

City Policy:

Legislative Action Policy 7.3.14 Miscellaneous (4): Support the provisions in the Brown Act regarding closed sessions and oppose expansion of closed sessions beyond existing exemptions. Oppose narrowing of attorney-client privilege statutes. Support efforts to require the State Legislature, public commissions, boards, councils, and other public agencies of the state to conduct deliberations and meetings in accordance with the Brown Act. Oppose amendments to the Brown Act that put undue burdens on local government.

Community Participation Sub-Element: Ensure that appropriate and effective public notification and access, in accordance with City Council policies, are provided to enhance meaningful community participation in the policymaking process.

LCC Position: Support.

Staff Recommendation: Staff recommends a support position on Proposition 59 because this Proposition provides the public with access to information while preserving the right to privacy – consistent with City policy.

2. Proposition 60: Election Rights of Political Parties. Legislative Constitutional Amendment.

Summary: This measure would provide the right for a political party participating in a primary election for partisan office to also participate in the general election for that office. This measure would also mean that the candidate receiving the most votes from among that party’s candidates in primary election for state partisan office cannot be denied placement on the general election ballot.

Proponents: Proponents argue that Proposition 60 will guarantee full, free, and open debate in elections. Proponents argue that Proposition 60 will preserve voter choice and protects the right to select political party nominees for public office in direct primary elections. Proponents also argue that Proposition 60 will give voters the right to choose from all parties and different points of view in general elections.

Opponents: Opponents argue that Proposition 60 does not spell out what type of primary election California will have, leaving the door open for special interest changes that will harm our electoral system.

Staff analysis: This measure affects how state candidates running in the primary election can advance to the general election. It means that any political party that participates in a primary election would have the constitutional right to have its nominee on the subsequent general election ballot. This measure would not require any changes to local election procedures, hence it would have no impact to the City. However, it may increase voter turnout because there would be a broader selection of state candidates to choose from. This could potentially impact votes for local candidates and measures.

Fiscal Impact: None

City Policy:
Legislative Action Policy 7.3: In cooperation with the County Registrar of Voters, support practices which would increase voter turnout in local elections.

LCC Position: Neutral.

Staff Recommendation: Staff recommends a support position on Proposition 60 because existing City policy provides that the City should support practices which would increase voter turnout in local elections.

3. Proposition 60A: Surplus Property. Legislative Constitutional Amendment.

Summary: This measure would dedicate proceeds from the sale of surplus state property purchased with General Fund monies to payment of principal and interest on Economic Recovery Bonds (approved in March 2004). When those bonds are repaid, surplus property sales proceeds would be directed to the Special Fund for Economic Uncertainties.

Proponents: Proponents argue that Proposition 60A reduces the cost of bonds approved in March 2004 as part of the governor’s plan to ease the state’s budget crisis.

Opponents: Opponents argue that Proposition 60A fails to require the state to sell its surplus property.

Staff Analysis/Fiscal Impact: Fiscal impact is minimal. Repayment of principal and interest on the bonds relies on the “triple-flip” mechanism (which swaps a portion of local sales tax for property tax on a dollar-for-dollar basis). Staff had previously identified minimal fiscal impact with the revenue swap because sales tax is apportioned monthly and the majority of property tax is apportioned semi-annually, meaning that the City loses the ability to earn interest on money that would have been apportioned monthly. Once the bonds are retired, the triple-flip reverts back to the correct apportionment schedule, and the City would regain its ability to earn monthly interest on the previously “swapped” sales tax revenue. Since the Legislative Analyst estimates that utilizing proceeds from surplus property sales to pay down interest on the bonds would reduce the repayment period by only a few months (on an estimated 9-14 year repayment period), the actual fiscal impact to Sunnyvale would be minimal. Once the bonds are repaid, revenue from surplus property sales would be deposited into a special fund (in the General Fund) for economic uncertainties.

To the extent the bonds are repaid earlier, the State could accumulate more revenue in its Economic Uncertainties fund, hopefully reducing the need to borrow or take revenues from other places in times of fiscal distress.

City Policy:
Legislative Action Policy 7.3 Miscellaneous, (2): Support long-term strategic planning by the state and balanced, multiple year budgets with a prudent reserve and outcome-based performance measures.

Past Position(s)

California voters overwhelmingly approved Propositions 57 and 58 in March 2004. These companion measures allowed the issuance of up to $15 billion in Economic Recovery Bonds to partially finance the state’s accumulated and massive budget deficit (57), and created specific balanced-budget and reserve requirements in the State Constitution (58). Though City policy both opposed and supported certain elements of the propositions, due to the extraordinary circumstances of the state’s fiscal crisis, staff recommended and Council approved, positions of support (see RTC 04-057 for full explanation). If Proposition 57 failed, the negative fiscal consequences for local governments, including Sunnyvale, could have been disastrous.

LCC Position: Neutral.

Staff Recommendation: Staff recommends a support position on Proposition 60A because earlier repayment of the Proposition 57 bonds restores in full the monthly sales tax apportionments so the City has the ability to earn more interest income. Given the Council’s support position on Proposition 57, staff is recommending support for Proposition 60A’s passage.

4. Proposition 61: Children’s Hospital Projects Grant Program. Bond Act. Initiative Statute.

Summary: This measure would authorize $750 million in general obligation bonds, to be repaid from the state’s General Fund, for capital improvement projects at children’s hospitals. The money raised from the bond sales could be used for the construction, expansion, remodeling, renovation, furnishing, equipping, financing, or refinancing of children's hospitals in the state. Eighty percent of the monies would be available to nonprofit children's hospitals and the remaining 20 percent would be available to University of California children's hospitals. The monies provided could not exceed the total cost of a project, and funded projects would have to be completed "within a reasonable period of time."

Proponents: Proponents argue that Proposition 61 will help make room in crowded children’s hospitals to treat children who need access to critical care. Children’s hospitals will be able to purchase the latest medical technologies and special equipment needed, and increase bed capacity.

Opponents: Opponents argue that California bond voters have already approved billions of dollars in bond sales. Additional borrowing is not responsible at this time of deficits and high debt.

Staff Analysis/Fiscal Impact: If the $750 million in bonds were sold at an interest rate of 5.25 percent and repaid over 30 years, the cost to the state General Fund would be about $1.5 billion to pay off both the principal and interest. The average total payment would be about $50 million per year. Children's hospitals would have to apply in writing for funds. Lucile Salter Packard Children's Hospital at Stanford is considered eligible to receive Proposition 61 funds. Almost half of Lucile Packard’s pediatric patients and 85% of obstetric patients come from San Mateo and Santa Clara counties.

City Policy:

General Plan Socio-Economic Sub-Element, Policy 5.1H.10: Encourage adequate provision of health care services to Sunnyvale residents.

General Plan Socio-Economic Sub-Element, Action Statement 5.1H.10b: Assure that adequate medical care facilities are available to Sunnyvale residents.

LCC Position: No Position.

Staff Recommendation: Staff recommends a support position on Proposition 61 because existing City policy provides that the City should encourage adequate provision of health care services to Sunnyvale residents.

5. Proposition 62: Elections. Primaries. Initiative Constitutional Amendment and Statute.

Summary: This is a constitutional amendment to make changes to primary elections in 2006 to allow voters to vote for any state or federal candidate (other than President or party committee) regardless of party affiliation; and requires that only two candidates receiving the most votes for an office will advance to the general election (regardless of party affiliation).

Proponents: Proponents argue that Proposition 62 will open up California’s election process, expand voter choices, increase voter participation, and create more competition in elections.

Opponents: Opponents argue that Proposition 62 will restrict voters to only two choices in the general election. It forces minor parties off the ballot, and decreases competition and opportunities for minority candidates.

Staff analysis: The City holds its elections during the general statewide elections. The proposed procedural changes to the primary elections will have no impact to the City. However, during the subsequent general election when only two candidates receiving the most votes for an office will appear on the ballot, it could result in low voter turnout and could impact local candidates and issues.

Fiscal Impact: State and counties may experience increase in printing and mailing costs for the preparation of primary election ballots and informational materials. However, this would not impact the City because we do not hold our elections during the primaries.

State and counties may experience reductions in general elections costs due to the reduced number of candidates and reducing the need to prepare different ballots for each political party. It is not clear at this time as to how this would affect local election costs.

City Policy:
Legislative Action Policy 7.3: In cooperation with the County Registrar of Voters, support practices which would increase voter turnout in local elections.

LCC Position: Neutral.

Staff Recommendation: Staff recommends an oppose position on Proposition 62 because the proposed procedural changes could result in a lower voter turnout.

6. Proposition 63: Mental Health Services Expansion, Funding. Tax on Personal Incomes above $1 Million. Initiative Statute.

Summary: This measure would provide funds to the state and counties to expand services and develop innovative programs and integrated service plans for mentally ill children, adults and seniors. This measure would require the state to develop mental health service programs and create a commission to approve certain county mental health programs and expenditures. This measure would impose an additional 1% tax on taxpayers’ taxable personal income above $1 million to provide dedicated funding for expansion of mental health services and programs, this measure would also prohibit the state from decreasing funding levels for mental health services below current levels.

Proponents: Proponents argue that Proposition 63 will expand comprehensive mental health care for children and adults, using programs proven to be effective, and that it provides effective treatment for all those being denied care. Proponents argue that prisons are crowded with mentally ill people who might not be there if they had been treated.

Opponents: Opponents argue that Proposition 63 forces the Legislature to continue funding existing mental health programs at their current levels, regardless of effectiveness or efficiency. Opponents also argue that Proposition 63 is built on a shaky funding scheme. It will drive away the very taxpayers whose support is needed.

Staff Analysis/Fiscal Impact: If enacted, a surcharge on state personal income taxes would be enacted for taxpayers with annual taxable incomes of more than $1 million to finance the expansion of county mental health programs. There are unknown state and local savings, as the increase in mental health services will likely decrease the need for other government services.

City Policy:
Legislative Action Policy 5G(6): Support efforts to improve and increase funding for mental health programs and services which would not negatively impact City budgets or revenues.

LCC Position: Neutral.

Staff Recommendation: Staff recommends a support position on Proposition 63 because existing City policy provides that the City should support efforts to improve and increase funding for mental health programs and services which would not negatively impact City budgets or revenues.

7. Proposition 64: Limit on Private Enforcement of Unfair Business Competition Laws. Initiative Statute.

Summary: California’s unfair competition law prohibits any person from engaging in any unlawful or fraudulent business act. This law may be enforced in court by the Attorney General, local public prosecutors, or a person acting in the interest of itself, its members, or the public. Examples of this type of lawsuit include cases involving deceptive or misleading advertising or violations of state law intended to protect the public well-being, such as health and safety requirements. Currently, a person initiating a lawsuit under the unfair competition law is not required to show that he/she suffered injury or lost money or property. Also, the Attorney General and local public prosecutors can bring an unfair competition lawsuit without demonstrating an injury or the loss of money or property of a claimant. Currently, persons initiating unfair competition lawsuits do not have to meet the requirements for class action lawsuits. In cases brought by the Attorney General or local public prosecutors, violators of the unfair competition law may be required to pay civil penalties up to $2,500 per violation. Currently, state and local governments may use the revenue from such civil penalties for general purposes.

Proposition 64 provides reforms to close the loophole in the law that has impacted California’s small business owners. This Proposition provides continued protection for consumers from unfair competition and deceptive advertising, but reforms the law to discourage its use by private fee-seeking lawyers without clients. A key provision in Proposition 64 requires an attorney who files a lawsuit to have an actual client who has been harmed or suffered financial injury. Finally, Proposition 64 reserves the responsibility of filing lawsuits on behalf of the people of the state of California for public officials, including the Attorney General, District Attorneys and some City Attorneys while dedicating more funding to their efforts.

Proponents: Proponents argue that Proposition 64 will close a loophole allowing lawyers to file frivolous lawsuits against small businesses. Proponents also argue that Proposition 64 will stop lawyers from pocketing most of the settlements from these false lawsuits.

Opponents: Opponents argue that Proposition 64 will weaken a current state law that allows private groups and government prosecutors to bring a claim against businesses for polluting the environment and for engaging in misleading advertising and other unfair business practices.

Staff analysis/Fiscal Impact: Approval of this Proposition appears to have a greater impact on County versus City government. The measure requires that local government civil penalty revenue be diverted from general local purposes to local public prosecutors for enforcement of consumer protection laws. To the extent that this diverted revenue is replaced by local general fund monies, there would be a cost to local government. The extent the measure reduces business costs associated with unfair competition lawsuits, it may improve firms’ profitability and eventually encourage additional economic activity, thereby increasing state and local revenues. To the extent that violations of health and safety requirements are not corrected, government could potentially incur increased costs in health-related programs.

City Policy:

Socio-Economic Sub-Element - Policy 5.1C.4: Promote business opportunities and business retention in Sunnyvale.

“Priority Watch” Issue #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.

Legislative Action Policy 2(10): Support the creation of a state economic development strategy that emphasizes business retention, promotes investment and business development opportunities, and promotes California as a good place to do business.

Legislative Action Policy 2(11): Support efforts to identify, assess, and mitigate key obstacles to business development in California, including workers compensation insurance, government regulations negatively impacting business, and the lack of a state economic development strategy.

LCC Position: Neutral.

Staff Recommendation: Staff recommends a support position on Proposition 64 because it provides reasonable, common sense reforms to close the loophole in the law that has impacted California’s small business owners. This is consistent with existing City policy.

8. Proposition 66: Limitations on “Three Strikes” Law. Sex Crimes. Punishment. Initiative Statute.

Summary: This measure would amend the “Three Strikes” law to require increased sentences only when current conviction is for specified violent and/or serious felony. This measure would redefine violent and serious felonies. Only prior convictions for specified violent and/or serious felonies brought and tried separately, would qualify for second and third “strike” sentence increases. This measure would allow conditional re-sentencing of persons with sentences increased under “Three Strikes” law if previous sentencing offenses or prior convictions used to increase sentences, would no longer qualify as violent and/or serious felonies. This measure would also increase punishment for specified sex crimes against children.

Proponents: Proponents argue that Proposition 66 would preserve the original intent of the Three Strikes law keeping violent, dangerous criminals in prison. Proponents argue that Proposition 66 will save taxpayers billions of dollars that are currently wasted imprisoning shoplifters and other nonviolent, petty offenders for life. Proponents also argue that Proposition 66 will protect children with tougher 1-strike sentences for child molesters.

Opponents: Opponents argue that Proposition 66 would allow the release of dangerous repeat offenders and weaken the definition of violent or serious crime. Opponents also argue that Proposition 66 will cost the state millions to return thousands of state prison inmates to county jails for resentencing, and could cost billions to deal with added crime and violence after dangerous criminals are released.

Staff Analyis/Fiscal Impact: The City of Sunnyvale is not expected to experience direct costs related to state and county incarceration and court systems. However, release of prisoners due to definition changes of a “serious” offense, could impact the Sunnyvale Department of Public Safety’s involvement in the tracking and potential arresting of released prisoners.

City Policy: No relevant City policy.

LCC Position: No Position.

Staff Recommendation: Staff recommends an oppose position on Proposition 66 because it limits second and third strike prosecutions to crimes on the serious or violent felony lists and releases over 26,000 felons now serving time for “3 Strikes” offenses.

9. Proposition 67: Emergency Medical Services. Funding. Telephone Surcharge. Initiative Constitutional Amendment and Statute.

Summary: This measure increases funding for the reimbursement of physicians and hospitals for uncompensated emergency medical care. It does this by imposing an additional 3 percent emergency telephone surcharge, in addition to the existing surcharge, on bills for telephone services for calls made within the state. Long-distance services for calls to areas outside of California would not be affected by this measure. The surcharge paid by residential customers would generally be limited to 50 cents per month for each telephone bill they receive. The surcharge would not be imposed on low-income residential customers eligible for lifeline telephone services. However, the 50 cents per month limit would not apply for cellular telephone services or for commercial telephone lines. Revenues from the increased surcharge would be deposited into a new 911 Emergency and Trauma Care Fund established by the measure. Certain state agencies specified in the measure would be able to expend the funds without appropriation by the Legislature.

Proponents: Proponents argue that Proposition 67 will provide needed funds to help keep hospital emergency rooms, trauma centers and health clinics open and operational and prevent long lines and wait times at local emergency rooms. Proponents argue that Proposition 67 will provide critical emergency medical equipment and technology. Proposition 67 will upgrade 911 emergency telephone systems and fund emergency medical care with a modest increase to the existing surcharge on telephone use for the 911 system.

Opponents: Opponents argue that Proposition 67 is a $540 million, or 400 percent, increase in phone taxes and that there is no cap on cell phone or business phone taxes. This increased tax could slow California’s economic recovery. Opponents also argue that 90% of the money will go to large health care corporations and special interests--with no mandatory audits or financial controls.

Staff analysis/Fiscal Impact: Proposition 67 would raise about $500 million annually for reimbursement of emergency medical services. The proposition requires each county to transfer a portion of fund revenues to the state for the reimbursement of each county's emergency physicians. This measure would generally shift the administration of funding for emergency medical services from counties to the state. There would be no direct impact to the City of Sunnyvale. This Proposition would not affect the emergency medical care for Sunnyvale residents who do not have insurance. Rather, it would provide additional funding to reimburse physicians and hospitals for such care.

City Policy: No relevant City policy.

LCC Position: Neutral.

Staff Recommendation: Staff recommends that Council take no position on Proposition 67 because there is no relevant City policy and no direct impact to the City of Sunnyvale.

10. Proposition 68: Non-Tribal Commercial Gambling Expansion. Tribal Gaming Compact Amendments. Revenues, Tax Exemptions. Initiative Constitutional Amendment and Statute.

Summary: This measure would authorize the Governor to negotiate tribal compact amendments requiring that Indian tribes pay 25% of slot machine revenues to a government fund, comply with multiple state laws, and accept state court jurisdiction. This measure would require that if compacted tribes don’t unanimously accept required amendments within 90 days, sixteen specified non-tribal racetracks and gambling establishments would be allowed to operate 30,000 slot machines, paying 33% of net revenues to fund government public safety, regulatory and social programs.

Proponents: Proponents argue that California needs the billions of dollars that would be generated, and that California's profitable Indian Casinos should pay their fair share to support local services. Proponents also argue that Proposition 68 will generate nearly $2 billion every year – monies that will be provided to local governments.

Opponents: Opponents argue that Proposition 68 will not be a guaranteed source of revenue for California and that it will authorize 16 new Las Vegas-style casinos to be built in urban areas throughout California. Lastly, opponents argue that monies from this initiative cannot be used to help balance the state budget.

Staff Analysis/Fiscal Impact: The fiscal effect on local governments would depend on whether compact tribes agree to the measure's provisions within 90 days of its passage. Under either scenario, the measure would result in an increase in new revenues of more than $1 billion annually. These funds would be provided primarily to local governments to increase funding for fire, police and child protective services. While extra monies would be distributed to local governments, expanded gaming will result in significantly increased traffic, infrastructure and service needs, and will require additional emergency response and public safety personnel.

City Policy: No relevant City policy.

LCC Position: Oppose.

Staff Recommendation: Staff recommends that Council take no position on Proposition 68 because there is no relevant City policy.

11. Proposition 69: DNA Samples. Collection. Database. Funding. Initiative Statute.

Summary: Current law requires collection of DNA from felons convicted of sexual assault and other violent crimes such as murder and manslaughter. This measure would expand DNA collection categories and require collection of DNA samples from adults and juveniles who are:

Convicted of any felony offense who are in custody, on parole or probation, and

Convicted of any sex or arson offense.

It also requires DNA collection of any adult arrested for or charged with felony sex offenses, murder or voluntary manslaughter. In addition, starting in 2009, this measure would also apply to adults arrested for or charged with any felony offense, violent or nonviolent. This measure would authorize local law enforcement laboratories to perform analyses for the state database and maintain a local database.

Proponents: Proponents argue that California is behind other states when it comes to using DNA to solve and prevent crime. Proposition 69 will help solve crime, prevents false imprisonment, and stop serial rapists/killers. Proponents also argue that Proposition 69 protects privacy by prohibiting use of DNA for anything except identification.

Opponents: Opponents argue that Proposition 69 goes too far by including possibly innocent people in a criminal database. People wrongly accused no longer will have their DNA expunged, and will face a complicated legal process without right of appeal.

Staff Analysis/Fiscal Impact: State costs would increase by nearly $20 million annually by 2009-2010 due to costs of sampling and analyzing DNA. Local costs to collect DNA samples may be fully offset by revenues. Sunnyvale Public Safety would require staff and training to collect additional DNA samples and it is unknown at this time if those costs would be offset by the local share of penalty revenues generated under this measure. Proposition 69 could also result in other unknown fiscal impacts on state and local governments since expanded DNA collection could result in increased investigations and prosecutions and higher rates of incarceration. Proposition 69 may lead to unknown state and local savings by identifying individuals who having been falsely accused and imprisoned, who would then be released from incarceration.

City Policy:

Legislative Action Policy 4.1(22): Support efforts to provide local law enforcement all necessary tools for investigation and prosecution of suspected felonies, including access to encryption as appropriate.

LCC Position: No Position.

Staff Recommendation: Although there is no specific City policy, staff recommends a support position on Proposition 69 because City policy provides that the City supports the use of “all necessary tools” for solving crimes. DNA evidence is an effective tool to solve crimes.

12. Proposition 70: Tribal Gaming Compacts. Exclusive Gaming Rights. Contributions to State. Initiative Constitutional Amendment and Statute.

Summary: This measure would require the Governor to execute a renewable 99-year gaming compact which would provide exclusive rights to Nevada-style gaming with no limit on numbers of slots or types of games. In return, this measure would require tribes to contribute a percentage of net gaming income, based on prevailing state corporate tax rate, to the state fund. This measure would also require off-reservation impact assessments, and public notice/comment opportunities before significant expansion or construction of gaming facilities.

Both Propositions 68 and 70 affect the numbers of California slot machines. If the two approved provisions are in conflict, only the measure with the more yes votes will take effect.

Proponents: Proponents argue that Proposition 70 will provide billions of dollars to the State and will restrict tribal gambling to Indian reservations. Tribes would pay the same amount as every other business pays in state income taxes; in return, they can operate their casinos. Lastly, proponents argue that Proposition 70 will lead to new agreements allowing each tribe to decide for itself how many casinos and what types or how many games it wishes to operate on its tribal lands.

Opponents: Opponents argue that Proposition 70 will give Indian gaming tribes a 99-year monopoly on gambling without ever having to pay their fair share in revenues to the state. Proposition 70 would invalidate the five recent compacts allowing additional slot machines in exchange for large payments to the state. Lastly, opponents argue that Proposition 70 provides no funds to local law enforcement agencies to help fight crime in the communities surrounding Indian casinos.

Staff Analysis/Fiscal Impact: As new casinos are added and current ones are expanded, some economic development activity could generate additional revenue in the local area. Currently, local jurisdictions have no authority to impose local fees or taxes on Indian gaming casinos, though some casinos have voluntarily entered into agreements to provide fiscal relief to the local community. It is unclear whether these agreements would continue or if the new revenues to the state would be shared with affected local jurisdictions. In addition, expanded gaming will result in significantly increased traffic, infrastructure and service needs, and will require additional emergency response and public safety personnel.

City Policy: No relevant City policy.

LCC Position: Oppose.

Staff Recommendation: Staff recommends that Council take no position on Proposition 70 because there is no relevant City policy.

13. Proposition 71: Stem Cell Research. Funding. Bonds. Initiative Constitutional Amendment and Statute.

Summary: Currently, California law permits stem cell research and the University of California conducts such research. The federal government provides funding for stem cell research but limits funds for research on embryonic stem cells. Proposition 71 would authorize the sale of $3 billion in general obligation bonds to establish and finance the “California Institute for Regenerative Medicine” to issue grants and loans for stem cell research and research facilities, and to regulate such funded research. Consistent with current statute, this measure would establish a constitutional right to conduct stem cell research and would prohibit the Institute’s funding of human reproductive cloning research.

Proponents: Proponents argue that Proposition 71 will authorize stem cell research to find new cures for diseases. Proponents argue that Proposition 71 will prohibit any funding for cloning to create babies, reinforcing existing state law banning human reproductive cloning. It will reduce health care costs by billions because of the possibility of new treatments with stem cell therapies.

Opponents: Opponents argue that Proposition 71 will add $3 billion of bond debt to California's massive debt load. Opponents also argue that Proposition 71 has few controls and no real accountability for how money is spent.

Staff Analysis/Fiscal Impact: The general obligation bonds would be repaid through the State’s General Fund. Significant research success as a result of this Proposition could stimulate general statewide economic activity. The Bay Area and Sunnyvale could benefit from the authorization of stem cell research. Biomedical and bioscience programs have been identified as key components to the next wave of innovation as defined by the Bay Area Science and Innovation Consortium and Joint Venture Silicon Valley. In addition, this investment has potential for making California a leader in this research field beyond the investment of other states and regions in the United States.

City Policy:

Legislative Action Policy 5B(3): Support research and development funding that increases and capitalizes on the capabilities of our existing industries, and increase the role of federal research and development in civilian research and technology. Support programs that promote continued/increased research and development that is innovative, entrepreneurial and has growth potential.

LCC Position: No Position.

Staff Recommendation: Staff recommends a support position on Proposition 71 because existing City policy provides that the City should support programs that promote continued/increased research and development that is innovative, entrepreneurial and has growth potential. The Bay Area and Sunnyvale could benefit from the authorization of stem cell research.

14. Proposition 72: Health Care Coverage Requirements. Referendum.

Summary: In October 2003, the Governor signed SB 2. This law would have gone into effect January 1, 2004. However, Proposition 72, a referendum on the new law, subsequently qualified for the statewide ballot and will take effect only if proposition 72 is approved by the voters. Proposition 72 includes the following provisions:

Provides for individual and dependent health care coverage for employees, as specified, working for large and medium employers;

Extends coverage to eligible employees who have worked for an employer for three months and who works at least 100 hours per month (average of 23 hours per week);

Requires that employers pay at least 80% of coverage cost; maximum 20% employee contribution;

Requires employers to pay for health coverage or pay a fee to a medical insurance board that purchases primarily private health coverage;

Applies to employers with 200 or more employees beginning 1/1/06;

Applies to employers with 50 to 199 employees beginning 1/1/07;

Applies to employers with 20 to 49 employees if tax credit enacted.

Proponents: Proponents argue that Proposition 72 will keep private health coverage within reach of working families. SB 2 will give the state clout to bargain for cheaper insurance and health care costs. Uninsured workers and families are a costly burden on public agencies and a threat to public health.

Opponents: Opponents argue that Proposition 72 costs too much – at least $5.7 billion for employers and $1.5 billion for employees. SB 2 will severely impact businesses and their ability to compete. With the state’s finances in deep trouble, this is no time to take on a costly new program.

Staff Analysis/Fiscal Impact: The City of Sunnyvale would be significantly impacted by this proposition, not only because of the 80% employer required contribution, but also because the City would be required to provide coverage to temporary (casual/seasonal) employees and their dependents. Currently this workforce fluctuates between 150 and 300 employees throughout the year. Temporary employees may work a few hours or up to 40+ a week, depending on the season. Although temporary employees are limited to six months or 1000 hours of service, given the way the law is written, practically all would qualify for health insurance.

It is impossible at this time to determine the cost to the City since a “fee” has not been yet determined. However, if the City provides health insurance to casual/seasonal employees, it would be very costly at the 80% level. There would also be a significant administrative cost in implementing this benefit.

City Policy:
Legislative Action Policy 2(11): Support efforts to identify, assess, and mitigate key obstacles to business development in California, including workers compensation insurance, government regulations negatively impacting business, and the lack of a state economic development strategy.

Legislative Management Subelement 7.3D.1a: Maintain a competitive pay and benefit package for employees.

LCC Position: Neutral.

Staff Recommendation: Although there is no specific City policy, staff recommends that Council oppose Proposition 72 because of the significant economic impact to the City of Sunnyvale.

15. Measure A: Comparable Wage – County of Santa Clara.

Summary: Measures A, B, and C amend the Santa Clara County Charter, Measure C was placed on the ballot by initiative petition, sponsored by County employee organizations representing nurses, attorneys and correctional officers. Measures A and B are counter measures placed on the ballot by the County Board of Supervisors. If more than one of these measures is successful and if some provisions are deemed contradictory, the measure with the larger vote prevails.

The current Charter of the County of Santa Clara provides that rates of pay shall be commensurate with prevailing rates of pay throughout the county for comparable work. Judges have interpreted this language to require comparisons to pay received by private sector employees. Measure A would change the current method of comparing County compensation with non-County employment. The measure provides that the rate of pay for County employees shall be substantially similar with rates of pay prevailing throughout the county for comparable public sector employees only. Also, the comparisons would cover both benefits and salaries instead of only salaries as at present.

Proponents: