January 10, 2006
SUBJECT: 2006 INTERGOVERNMENTAL RELATIONS PRIORITIES AND LEGISLATIVE ADVOCACY POSITIONS
REPORT IN BRIEF
This report details the City’s proposed draft 2006 intergovernmental priorities and Legislative Advocacy Positions (LAP), which was reviewed by Council at the December 15 Study Issues Workshop. The purpose of establishing City LAP and intergovernmental priorities is to focus staff time for advocacy on legislative and intergovernmental issues. For 2006, staff recommends three intergovernmental priorities:
· Telecommunications Tax Reform;
· Moffett Field, NASA Ames, and Moffett Federal Airfield;
· Base Realignment and Closure (BRAC) of Onizuka Air Force Station.
Staff recommends four priority watch issues:
· Investment Funding for Workforce Development;
· Environmental Issues;
· Transportation Infrastructure Funding;
· Universal Preschool.
BACKGROUND
In 1982, the City Council adopted a procedure for establishing external legislative advocacy positions based on four primary components:
· City-adopted General Plan policies and specific legislative policies;
· National and Santa Clara County Cities Association policies and resolutions;
· League of California Cities policies and resolutions;
· Review of state and federal budgets.
The approach provides an opportunity for the City Council to review and update the City’s legislative policy advocacy 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 advocacy for City interests effectively and efficiently regarding pending legislation and intergovernmental issues. To focus the City's limited advocacy resources, staff annually seeks direction from Council regarding priorities. Traditionally, staff has provided the following support on priority issues:
· Research, monitor and track legislation. Staff monitors and researches pending legislation to identify bills that could significantly impact Sunnyvale. 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. Effective advocacy efforts require that staff respond with reasonable expertise on short notice and within tight deadlines.
· Develop talking points for the 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 on priority watch areas, because significant impact to the City of Sunnyvale has not yet been determined or legislation is not yet pending.. However, staff monitors information from appropriate professional organizations, city associations, and other sources to stay abreast of developing activities; and as appropriate provide input to lawmakers. Should staff identify significant impact to the City of Sunnyvale and 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 complete spectrum of issues worthy of the City's attention. Staff also conducts limited advocacy in other areas as appropriate should issues arise throughout the year that may impact the City where Council’s positions have previously been established by the LAP. In addition, as the year unfolds new issues may arise, often for reasons external to the City, which require advocacy. As these new issues arise, staff presents them to Council for direction.
Legislative Advocacy Positions (LAP)
The recommended 2006 Legislative Advocacy Positions are identified in Attachment A. If approved by Council, the LAP will be inserted into Council’s Legislative Policy Manual as the updated Council policy. The purpose of the LAP is to identify Council-adopted positions regarding intergovernmental 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 positions 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 advocacy positions; deletion of positions that are no longer relevant; identification of current issues where new position statements are deemed appropriate; clarifications and simplifications. Examples of new positions include those that result from Council advocacy regarding positions on ballot measures, League of California Cities (LCC) resolutions, and National League of Cities (NLC) resolutions.
Intergovernmental Priorities
To ensure the best use of limited staff resources, the City designates two special categories for advocacy: priority and priority watch. Intergovernmental priority areas are those "hot" areas where 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 may become active, but no specific legislation or activity has yet been identified or where the impact on the City of Sunnyvale of the pending legislation has not yet been specifically determined.
Staff has identified three priority areas for 2006:
1. Telecommunications Tax Reform
Within the last few years, a complex array of technological advances has been merging in the areas of data transmission, Internet access, telecommunications, and video (cable) services. The convergence of these industries, each with disparate, multi-level governmental frameworks for taxation and regulation, has blurred the lines between what is taxable and non-taxable, and is precipitating regulatory review and change that could have far-reaching negative implications for California cities whose taxing authority is based on or patterned after federal law.
Tax reform proposals are being debated at the federal and state levels (in both the legislative and regulatory arenas), with the industry argument that government regulation negatively affects market-based competition. Woven into the evolving conversations are varying themes of tax protection, simplification, uniformity, and even complete removal of local taxation authority. Not surprisingly, these reform efforts are spearheaded by powerful industry lobbies with strong ties to Congress and growing influence in state legislatures across the country.
Given the rapid evolution of converging communications technologies, the disparate and outdated laws that govern each sector (or absence thereof), the intense lobbying efforts of industry, and the competing priorities of Federal and State regulators, there is no question that various types of reform will occur in the near future at the Federal and State levels.
At risk are a wide range of local taxes and fees including utility users taxes, cable franchise fees, rights-of-way fees, and 9-1-1 fees and regulatory surcharges. Taken together, the potential revenue loss for local governments in California is significant, and could exceed $1.5 billion statewide in local revenue. Along with the possibility of significant revenue loss, cities may lose the ability to negotiate local cable franchise agreements that regulate public rights-of-way and govern and encourage public access programming.
In California, discussions are underway among state lawmakers about how to best standardize the local cable franchise process, which could result in a statewide franchise agreement to replace local agreements. The State of Texas has already passed legislation creating a statewide cable franchise process, effectively removing local control in that state. The State of Florida passed telecommunications reform in 2001 that has eroded local revenues there. Other states such as Virginia are experiencing intense lobbying efforts to reform telecommunications laws.
At the national level, a rewrite of the 1996 Telecommunications Act (and potentially sections of the 1984 and 1992 Cable Acts) is widely anticipated in early 2006. The 1996 Telecommunications Acts is the controlling document for the local franchising authorities. Not only is there potential impact on the cable TV franchise, but also on the cable modem, video and data services which are now considered “interstate information services” and not eligible for regulation by cities. This process has already begun with the introduction of S.1504 (Ensign/McCain), a bill that would nationalize the cable franchise process, among other things. Additional legislation is imminently expected, with the House Commerce Committee recently releasing a discussion draft of a Telecom Act rewrite that centers around a national law to preempt local cable franchising.
It is important to note that any far-reaching national legislation could entirely preempt state and local laws in this area. It is equally important to note that efforts are being made by both industry and legislators to group the various local revenues streams, however disparate, into one “taxation bucket” in order to streamline tax reform.
The City of Sunnyvale receives more than $2.5 million in revenue associated with telecommunications services; approximately $1.5 million in utility users tax from telecom services and approximately $1 million in cable franchise fees. Any loss of these important revenue sources, or the ability to locally control them, could have significant negative consequences for Sunnyvale.
2. Moffett Field, NASA Ames, and Moffett Federal Airfield
During the past several years, working in partnership with Congresswoman Anna Eshoo’s office and the City of Mountain View, Sunnyvale has focused efforts on advocating against the potential relocation of the 129th Rescue Wing, and toward protecting the airfield as a secure Federal airfield. Earlier this year the National Guard withdrew its request for funds to relocate the 129th Rescue Wing, extending its commitment to Moffett Federal Airfield.
Despite this commitment from the 129th Air Rescue Wing, NASA, the government agency which manages the land the Guard operates on, is considering options to reduce a budget deficit reportedly stemming from operations of the Federal airfield. NASA has agreed to hold exploratory discussions with the cities of Sunnyvale and Mountain View about economic-development opportunities to reduce the operating deficit.
The City of San Jose may continue to be interested in having greater access to Moffett, either using it as a reliever airport, or as a civilian or commercial airport. Given the runway constraints of the Bay Area's airports, continued attention needs to be focused on protecting the existing status of the airfield.
Finally, Hanger One at Moffett Field is important to the Sunnyvale community, and has been a regional landmark since its construction in 1933. The City of Sunnyvale supports the use of Federal funds to clean and restore Hanger One at Moffett Field to make it habitable and code-compliant so it may be used for a future public use. At present, the Navy is evaluating remediation options and is expected to announce its decision by the end of the year.
3. Base Realignment and Closure (BRAC) of Onizuka Air Force Station
As part of the 2005 BRAC process, the Department of Defense (DoD) recommended to an independent BRAC Commission that Sunnyvale’s Onizuka Air Force Station be closed and that it move its operations to Vandenburg Air Force Base. The BRAC Commission voted in late August, 2005 to approve the DoD’s recommendation to close Onizuka and the BRAC Commission’s recommendations officially took effect on November 9, 2005 when Congress allowed them to pass into law. Under the BRAC statute, action to close Onizuka must be initiated by September 15, 2007, and must be completed by September 15, 2011.
If no other DoD branch or Federal agency requires the Onizuka property, it will be deemed “surplus” and the disposal process initiated. The City of Sunnyvale will need to request formal designation of a Local Reuse Authority from the Office of Economic Adjustment (OEA), and then initiate the process of reviewing the condition of the property and developing a reuse plan for approval by the (OEA) and the Air Force. The reuse plan for Onizuka Air Force Station is likely to take several years to develop and implement.
Priority Watch Issues
Staff has identified four priority watch areas for 2005 (in no particular order):
1. Investment Funding for Workforce Development
As in 2004 and 2005, "Investment Funding for Workforce Development" will continue to be a Priority Watch Issue for the City in 2006. Financial resources from federal and state governments for workforce development/education and training programs are critical for the reemployment of thousands of dislocated workers and the successful transition of hundreds of downsized businesses, locally. These vital resources are also essential to the economic sustainability of this community. Given the current financial climate at the federal and state levels and the expected impacts brought on by Hurricane Katrina, funding for workforce development for this region continues to be vulnerable in 2006 and could potentially threaten the very survival of these local and critical programs.
2. 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 League of California Cities’ and National League of Cities’ suggested modifications 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 needs to be closely watched.
Funding
The City supports legislative efforts to exempt stormwater utility fees from Proposition 218 requirements. Proposition 218, passed by California voters in 1996, requires voter approval for property-related fee or charge increases, except for charges and fees for sewer, water and refuse collection. The case can be made that stormwater fees are commensurate with level of service provided relative to the amount of impervious surface on a property, and not merely a fact of property ownership.
3. Transportation Infrastructure and Funding
Infrastructure
Protection and stabilization of transportation infrastructure funding sources will continue to be a critical issue in 2006.
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. Support for all modes of transportation enhances livable local communities, balances housing and jobs, keeps existing facilities in a state of good repair, 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.
1) Transportation sales tax funds are a primary source of capital improvement and transit operations. Proposition 42, which was approved by voters in March 2002, dedicated all gasoline sales tax revenue for local and state transportation needs, but this measure is being subjected to debate and legislative manipulation. California’s Governor and Legislature used an override provision to divert these funds to the State General Fund in both the 2003/04 and 2004/05 state budgets. This diversion was not pursued in 2005/06, but the potential for this to occur in 2006/07 is a distinct possibility.
2) 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. Previous 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.
Locally, Sunnyvale's local transit service provider, the Santa Clara Valley Transportation Authority (VTA), 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. The VTA will likely consider a new countywide sales tax measure to fund both operating and capital expansion in 2006.
4. Universal Preschool
Pending universal preschool legislation may have a significant impact on the City of Sunnyvale. Universal preschool will enable greater numbers of Sunnyvale children to attend preschool. The Preschool for All ballot initiative was received by the State of California Attorney General’s Office and will appear on the June 2006 ballot. The initiative calls for a half-day voluntary preschool program for all four-year olds and outlines bachelor degree requirements for universal preschool teachers. Council has directed City staff to focus on collaborative efforts with other community organizations to support the education of preschool providers in Sunnyvale should the initiative pass.
Summary
The Priority and Priority Watch issues are not exhaustive and it may be appropriate for Council to modify the issues and strategies as needed throughout the year. 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 advocacy. 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.
Conclusion
This report includes the proposed 2006 Legislative Advocacy Positions (LAP) and intergovernmental priorities. The LAPs are used by Council and staff throughout the year to determine City positions on legislation and intergovernmental issues. The City’s intergovernmental priorities focus the City’s lobbying efforts on issues where legislative activity could have a significant impact on the City of Sunnyvale.
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 advocacy positions and intergovernmental priorities as proposed.
2) Modify the legislative action positions and/or the intergovernmental priorities as proposed.
3) Other direction as provided by Council.
RECOMMENDATION
Staff recommends Alternative 1: Approve the legislative advocacy positions and intergovernmental priorities as proposed.
Reviewed by:
Robert Walker, Assistant City Manager
Prepared by: Coryn Campbell, Neighborhood and Community Resources Manager
Approved by:
Amy Chan
City Manager
Attachments
A. City of Sunnyvale Draft 2006 Legislative Advocacy Positions (.doc)