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HomeMy WebLinkAboutStaff Report 203-10TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: CITY MANAGER'S OFFICE DATE: APRIL 12, 2010 CMR: 203:.10 SUBJECT: Update on City's Legislative Program and Federal Appropriations Requests This is an informational update and no Council action is required. DISCUSSION In December 2009, the Council adopted State and Federal legislative priorities for 2010 and prioritized the City's Federal appropriations request for the upcoming year. Staff has byen working with the City's Federal legislative advocacy firm, Van Scoyoc Associates (VSA), on submitting the appropriations requests and on several other issues. In addition, staff is planning for an advocacy trip to Washington, D.C. April 14-16 with Vice Mayor Espinosa and Councilmember Klein. The purpose of this report is to update the Council on these activities and also to proVide an update on some of the key legislative issues that the Utilities Department has been monitoring. Federal Appropriations Requests: The Council adopted the priorities for the FY2011 Federal appropriations requests on January 21,2010. The three projects were: 1) San Francisquito Creek JP A project -$2,000,000 submitted by City 2) Foothills Fire evacuation routes -$384,520 3) Highway 101 bicycle/pedestrian bridge -$7,650,000 These requests were submitted to Congresswoman Anna Eshoo, Senator Barbara Boxer, and Senator Diane Feinstein through the appropriations process. Staff has learned that Congresswoman Eshoo has submitted the San Francisquilo Creek JPA project and the Highway 101 bicycle/pedestrian bridge projects to the House Appropriations Committee for funding consideration. She requested $1,000,000 for the JPA project and $1,800,000 for the bicycle/pedestrian bridge project. The City would like to acknowledge and thank Congresswoman Eshoo for her support of these two projects in the appropriations process. Staff also recently received word -that Senator Feinstein submitted an appropriations request of CMR:203:JO Page 1 of5 $2,000,000 for the JP A project. The City would like to acknowledge and thank Senator Feinstein for her support of this project in the appropriations process. VSA was able to follow up with Congresswoman Eshoo's office to gather more information about the submittals and the requested amounts. Per her staff, Congresswoman Eshoo did not submit the evacuation route project because they had been advised by the Appropriations Subcommittee that the project was not eligible for Federal funding; rather, it was an appropriate State funding issue. VSA indicates that, in previous years, similar projects have been funded as appropriations in the Homeland Security Funding bills. There is no further information at this point as to why the Subcommittee indicated this project was ineligible for funding. VSA will continue to do some research with FEMA but, for this year, the House will not be considering funding for this project. The funding request for the bike/pedestrian bridge project was reduced from the City's original request of $7.65 million to $1.8 million. Congresswoman Eshoo indicated that the typical appropriations request in the Transportation bill was in the range of $300,000 to $1 million. She did not feel able to justifY the full request of $7.65 million with the expectation of receiving any funding. As such, she submitted a request of $1.8 million. Congresswoman Eshoo indicated that the JPA project was a high priority for her. Although the City submitted a $2 million funding request, the Congresswoman felt that she could only put forward a request of $1 million to the Appropriations Subcommittee. Her staff indicated that they had spoken with a number of people who were supportive of the project. Next Steps on Appropriations: When Congress returns to session on April 12, the House will begin consideration of the FY 20 II Budget Resolution. This is a broad framework of the congressional priorities for the coming year, but it does set the overall limit on spending for the 12 appropriations bills. Shortly after May IS, the House will begin marking up each of funding bills. For the City's projects, the two bills of importance will be the Energy & Water and TransportationiHUD bills. Those should be approved by the House Appropriations Committee in by early June and the City will then know where it stands on the two appropriations requests. House Floor action will follow in June and early July. The Senate typically begins its Committee markups once the House passes its version of the funding bills. The new fiscal year starts on October I, but rarely are bills completed by then. Being an election year, it is likely that the final appropriations bills will be completed after the election, in mid-November to late-December. Already this year, there has been much discussion in Washington about appropriations requests. Earlier in March, House Republicans voted to impose a one-year moratorium on all appropriations, for companies, non-profits, and public entities. As such, every House Republican has agreed not to request any earmarks this year. Republican leaders have said they will revisit this approach next year. House Democrats followed suit by indicating that they would not seek appropriations requests for "for-profit" entities, or companies. House leaders have said this will affect about 1,000 projects that were earmarked last year, most of which were defense projects. Thus far, the Senate has done nothing to change how they will handle appropriations for FY 2011. In response to the House initiatives, members of the Senate Appropriations Committee both reaffirmed their belief that Congress has the right to direct CMR:203:10 Page 2 of5 funding, rather than leaving it to the Executive Branch to designate (which is what happcns when there are no appropriations/earmarks). There has also heen some talk this year, especially in the House, that they may not move their appropriations bills and rather simply pass a year-long Continuing Resolution. This action would fund Federal government agencies for the year but not include any appropriations requests. The reason is that the House helieves they will have to make a number of hard votes, and there is no guarantee the Senate will then act on the bills. Even with a year-long Continuing Resolution, all the discretionary funds will go to the agencies for competitive grants. If that happens, VSA will work to get letters of support for the City's grant applications for the three pr~iects, plus any other pr~jects the City might consider submitting. April Meetings in Washington, DC: Originally, staff had planned to travel to Washington, DC with Vice Mayor Espinosa and Councilmember Klein in February for a series of visits about the City'S appropriations requests and other Federal legislative issues. Due to the significant snow storms in February, the trip was canceled and rescheduled for April 14-16. Staff has been working with VSA to schedule a series of meetings that will be productive and useful in advancing the City'S Federal legislative agenda. Len Materman, Executive Director of the San Francisquito Creck lPA, will be joining the group traveling to DC. The key topics of discussion during the visit will be: the City's Federal Appropriations requests; High Speed Rail; the City's Recycled Water Project; Bicycle/Pedestrian access (Livable Communities program); and Broadband policy. VSA is working to schedule visits with staff for Senators Boxer and Feinstein, the House Appropriations Subcommittee, the House and Senate Energy & Water Subcommittees (JPA project), the Corps of Engineers (JPA project), the Department of Transportation (High Speed Rail and Livable Communities), and the White House (High Speed Rail). The group will also be meeting with the Executive Director of the National League of Cities to discuss issues related to High Speed Rail. On Broadband policy, even though the City has submitted a proposal to Google for the Open Fiber project, it is still important to continue the City's push that there should be a true national broadband plan that extends the benefits of high speed internet to all communities in the country, not just to rural and underserved communities. VSA will try to schedule all of these discussions but discussions about Broadband policy will be a lower priority relative to the others on the list. The primary focus will be on the appropriations requests and on High Speed Rail issues. Utilities Legislative Update: Federal Energy and Climate: Recent Senate activity on energy and climate may have revived the Federal legislative effort. Thc leading Senate package (from Senators Ken'y, Graham and Lieberman) no longer features an economy-wide cap-and-trade system, a major problem for many Senators. While details have yet to he released, reports suggest that the electric utility sector will still be subject to a cap-and-trade regime beginning in 2012. Industrial emissions may be added to a cap-and-trade system by 2017. Meanwhile, emissions from the transportation sector will be addressed through a carbon tax. CMR:203:10 Page 3 of5 State Calendar year 2010 is the second year of a two-year State legislative session. So far, the following bills have been identified by staff as being of interest to the City's Utilities Department. SB 722 (Simitian) -SB 722 has been amended to make it this year's version of the 33% renewable portfolio standards bill. The first version of the language in SB 722 starts from where SB 14 ended 'up last year, with publicly owned utilities (POU), such as the City, required to have a 33% renewable portfolio by 2020. This bill would also require POUs to only count California eligible renewables in their 33% portfolio. On a parallel path with the State Legislature's action on SB 722, in March the California Air Resources Board (CARB) released its latest draft of proposed regulations seeking to impose a 33% Renewable Electricity Standard (RES) on public power and investor-owned utilities. In this draft regulation, CARB proposes limited grandfathering of large hydroelectric power for POUs that currently count it towards their renewable portfolio. This would not apply to the majority of POUs, such as the City, that adopted the California definition of eligible renewable resources. Deliverability of and caps on out-of-state renewables remains an issue of debate, just as in the legislature. However, CARB's action, resulting from executive order, is being challenged by the legislature. ' AB 510 (Skinner) -This bill, in an attempt to stimulate distributed generation, chiefly solar PV, raised the cap on net energy metering for eligible customer-generators to 5 percent of the electric utility's peak demand from its current 2.5 percent. For the purpose of this bill, "eligible customer-generator" means a residential, commercial or industrial customer who uses a solar or a wind turbine electrical generating facility with a capacity of not more than one megawatt that is located on the customer premises., and is intended primarily to offset part or all of the customer's own electrical requirements. The City currently has 2.5 MW of installed PV capacity, or about 1.3% of peak demand. AB 510 was approved by the Governor and chaptered by the Secretary of State (Chapter 6, Statutes of2010) on February 26, 2010. AB 2514 (Skinner) -This bill would create an energy-storage portfolio standard, requiring electric utilities (including publicly owned utilities such as the City) to procure new energy­ storage systems to meet 2.25 percent of their average peak demand by 2014 and 5 percent after 2020. SB 1305 (Pavley) and AB 2534 (Fuentes) -A couple of bills that would appropriate revenues generated from implementation of the California Global Warming Solutions Act of 2006 (AB32) for purposes determined by the Legislature. Revenues generated as a result of the implementation of cap-and-trade program are projected to be between $7 billion and $21 Billion annually. Landmark Delta Water Bills (Various) -Staff is monitoring the progress of the various State agencies that are charged with implementing these complicated bills. Staff presented preliminary information to the UAC in January 2010. Preliminary analysis reveals that one permitted approach for meeting the 20% water use reduction may require little additional effort on the City's part, though there remains uncertainty regarding how the SB7 mandated reduction CMR:203:10 Page 4 of5 will be coordinated with the City's own 20% by 2020 reduction effort (September 21, 2009 colleagues' memo). Santa Clara Valley Water District Act Amendment -The Santa Clara Valley Water District (SCVWD) has introduced legislation that clarifies and strengthens its oversight of the groundwater basin(s) in the County. Staff is seeking clarification of the intent of the legislation with the SCVWD and has not taken a position at this time. RESOURCE IMPACT There are no resource impacts associated with this report. POLICY IMPLICATIONS This diseussion is consistent with current Council direction and policies. ENVIRONMENTAL REVIEW This report is not a project requiring review under th.e California Environmental Quality Act (CEQA). PREPARED BY: KELLY MORARIU Assistant to the City Manager CITY MANAGER APPROVAL: -----.... --~~--- CMR:203:10 Page 5 of5