Bay Area Council Blog: 21st Century Infrastructure Archive

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New Report: Overcoming CA’s $1 Trillion Infrastructure Deficit

With California facing a $1 trillion infrastructure deficit between now and 2050, a new Bay Area Council Economic Institute report explores how public-private partnerships (P3) can accelerate infrastructure delivery. According to the report, P3 methods are extremely effective in mobilizing private capital, speeding project delivery and better maintaining public infrastructure through life-cycle management. Read the report>>

The report – the latest in a series – assesses how the P3 model has evolved, analyzes projects completed in the last five years, assesses upcoming projects, and identifies future projects that could benefit from P3 delivery in the future. It also looks at steps state and federal governments, as well as the private sector, can take to build a larger pipeline of P3 projects.

One major promising project featured in the report is the potential redevelopment of the Sonoma County and Santa Rosa City civic centers, which could represent up to 700,000 square feet of government offices, as well as mixed-use retail and housing development on approximately 100 acres. Following last November’s devastating wildfires, the Economic Institute is working closely with public and civic leaders in the North Bay to build more resilient and inclusive communities and this project is key to achieving that goal. Developers and financiers who are interested in learning more should fill out this survey>>

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Bay Area Cities Approve, Deny New Taxes on Business

A number of cities across the Bay Area have been pursuing initiatives to increase taxes on businesses with stated goals of generating revenue amid mounting housing affordability, transportation, and homelessness crises. This week, the City Councils of Mountain View and East Palo Alto passed measures going on November 2018 ballots to place a head tax and parcel tax, respectively, on businesses meeting certain parameters. Meanwhile, San Francisco and Cupertino withdrew their measures to increase business taxes following collaboration with affected companies.  In San Francisco, Supervisor Aaron Peskin replaced his ballot measure to tax gross receipts of ride-hailing and autonomous vehicle companies with a per-ride fee that will be introduced through state legislation. Cupertino agreed to delay consideration of a head tax measure until 2020 after more thorough planning is completed.

The Bay Area Council shares the concerns of these cities to find solutions to our region’s problems. However, we are concerned that in an attempt to be seen as taking action on a timely issue, cities are increasingly turning to taxing businesses without sufficient analysis or stakeholder engagement. Without a thoughtful process, cities risk reducing employment and wage growth, affecting employees and constraining the region’s economic success. The Bay Area’s housing and transportation problems are regional in nature and a myriad of heavy-handed taxes on businesses across multiple cities discourages the potential for a coordinated, regional strategy needed to solve these major challenges. The Bay Area Council has written letters and testified at numerous City Council meetings on these issues, and has offered to partner with City Councilmembers and their staff to assist with their analysis. We are encouraged by the actions of San Francisco and Cupertino to work with affected companies and take the time to analyze the impact of the proposed taxes before sending measures to voters for approval.

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A Gusher of Water News

Water news was flowing this week as the Bay Area Council hit back at a new attempt to raze Hetch Hetchy reservoir, applauded funding for increased water storage projects and advocated against proposed state cutbacks that could cripple housing production.

First up, the Council responded to a recent meeting that a fringe group seeking to tear down the Bay Area’s Hetch Hetchy clean water and power system held with U.S. Interior Sec. Ryan Zinke as they sought to enlist his support for their wild scheme. The Council for decades has been a leading advocate for protecting Hetch Hetchy, which provides clean, reliable water and carbon-free energy to 2.6 million Bay Area residents and businesses. The Council led the opposition campaign against a 2012 San Francisco ballot measure by the same group that was aimed at draining and replacing Hetch Hetchy. Voters soundly rejected the measure by 77 percent. A state appeals court also recently rejected a lawsuit by the group to dismantle the Hetch Hetchy water and power system.

Read the Council’s statement on the Zinke meeting>>

Next up, the Council applauded a decision by the California Water Commission on Tuesday (July 24) to an award $2.5 billion to eight water storage projects across California, including nearly $1 billion for two major projects in the Bay Area. The funding came from Proposition 1, a Bay Area Council-backed water bond approved by voters in November 2014.

The Commission approved $485 million for the Santa Clara Valley Water District’s Pacheco Reservoir Project, a new 319-foot-tall dam Santa Clara County, and $459 million for the Contra Costa Water District to raise Los Vaqueros reservoir by 55 feet. Combined, the two projects would add a total of 255,000 acre-feet of new water for Bay Area residents and businesses. An acre-foot is roughly equal to the amount of water an average household uses in one year. The Sites Reservoir, another project the Council supported, got $816 million. The Council’s Water Committee had identified all three projects as top priority for regional water security.

And finally, the Council is continuing its advocacy against regulations the State Water Resources Control Board is considering that would severely reduce water supplies for 2.6 million Bay Area residents and cripple the region’s ability to build housing. An analysis by the Bay Area Council Economic Institute estimates that the cuts proposed by the state water board could provoke a wave of building moratoria across much of San Mateo, Santa Clara, and Alameda counties.

To learn more about the Bay Area Council Water Committee, please contact Vice President Adrian Covert.

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November Ballot Positions Announced

The Bay Area Council Executive Committee has adopted positions on a range of state and local ballot measures that voters will decide in November.

Support

Proposition 1: Authorizes $4 billion in bonds for affordable housing programs and veterans’ home loans.

Proposition 2: Authorizes state to use revenue from Proposition 63 (2004) for $2 billion in bonds for homelessness prevention housing.

Proposition 3: Authorizes $8.9 billion in bonds for water-related infrastructure and environmental projects.

Proposition 4: Authorizes $1.5 billion in bonds for children’s hospitals.

Proposition 5: Amends Proposition 13 to allow homeowners 55 and older to transfer their property tax assessments from their current home to a new home anywhere in California.

Proposition 11: Allow ambulance providers to require workers to remain on-call during breaks paid.

Oakland Children’s Initiative: Proposed measure would support early childhood education programs and services through $198 annual parcel tax.

San Mateo County transportation: Funds wide range of traffic relief and transportation improvement projects over 30 years with ½-cent sales tax increase.

Marin County transportation: Extends existing voter-approved ½-cent sales tax to fund wide range of traffic relief and transportation improvement projects.

Oppose

Proposition 6: Repeals 2017 fuel tax and vehicle fee increases (SB 1) to fund road, bridge and highway repairs and requires public vote on future increases.

Proposition 10: Repeals the Costa-Hawkins Rental Housing Act and allows local governments to enact rent control.

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Napa Moves Proactively to Ease Onerous Granny Unit Fees

Reducing and eliminating onerous local fees that discourage homeowners from building accessory dwelling units (ADUs), aka granny units, is among the Bay Area Council’s top priorities in our work to expand this important source of affordable housing. Such fees can add tens of thousands of dollars and more to the cost of ADUs. So we were thrilled this week to learn that the Napa City Council unanimously approved an ordinance to exempt accessory dwelling units (ADUs) of less than 500 square feet from the city’s housing impact fee. It’s thought to be one of the few cities in California to take such a proactive step on ADU fees.

The move will reduce construction costs by an estimated $2,700 per ADU. And, Napa City Housing Manager Lark Ferrell said proposed ADU fee reductions being considered by the Napa sanitation and school districts could lower total impact fees by $12,000. We applaud Napa’s action and encourage other cities to take similar steps. The Bay Area Council has sponsored and advocated for a number of bills to remove barriers to ADU construction, including Assemblymember Phil Ting’s bill (AB 2890) which the Senate Appropriations Committee currently is considering.

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Feds Surprise with $177M for Massive Sea Level Rise, Restoration Project

The South Bay is poised to become more resilient to rising sea levels, thanks to an unexpected decision from the U.S. Army Corps of Engineers to fully fund the $177 million South Bay Shoreline Project—a massive effort to build four miles of new levees and restore 3,000 acres of wetlands near San Jose. A report by the Bay Area Council Economic Institute found the South Bay is more economically vulnerable to catastrophic flood damage than any other portion of the Bay Area and could suffer over $6 billion in damages during an extreme storm event. The project has been in the works since at least 2005, following Senator Dianne Feinstein’s work to facilitate the historic acquisition of the South Bay Salt Ponds from Cargill, and the Bay Area Council has been strongly advocating for federal support of the project ever since.

The South Bay shoreline project was one of the very first projects to receive local support from the Bay Area Council co-sponsored Measure AA, the $12 parcel tax measure approved by voters in 2016 to fund multi-benefit wetland restoration and flood protection projects. With funding in place, construction is slated to begin next summer, and the new levee is expected to be completed in 3-5 years. Enormous thanks are due to the hard work of the Bay Area Council partners who helped make this announcement a reality, including Senator Feinstein, the Santa Clara Valley Water District, the Silicon Valley Leadership Group, and Save the Bay. To learn more about the Bay Area Council’s work on climate resilience, please contact Vice President of Public Policy Adrian Covert.

Regional Profile

PROFILE X: BAY AREA JUMPS TO TOP 20 WORLD ECONOMIES

With a GDP of nearly $750 billion, the Bay Area is now a Top 20 world economy, jumping from 23 to 19 since 2016. This was just one of many key findings unveiled Tuesday (June 10) as the Bay Area Council Economic Institute presented its Economic Profile with partner McKinsey & Company. The tenth in a series of Profile reports, this latest edition examines a new period of immense growth and innovation, benchmarking the Bay Area’s performance against other knowledge-based economies to assess the region’s national and global competitiveness.

Joined by Managing Partner of McKinsey & Company’s Silicon Valley office, Alexis Krivkovich, and Associate Partner Kunal Modi, Institute President Micah Weinberg presented to a packed room of members, guests, and the media. Key takeaways focused on the exceptional period of growth the region is experiencing including the maturation of some of the world largest companies, record employment, and an increasingly diverse technology sector. The report also examines the challenges such rapid growth has brought to housing, transportation, and equity in the region.

Read the full Economic Profile report>>

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ALAMEDA OKS 760-UNIT HOUSING PROJECT THAT COUNCIL ENDORSED

Alameda took a big step in adding much needed housing when the City Council on Tuesday (July 10) unanimously approved the EIR and Master Plan for Alameda Marina, a housing project endorsed by the Bay Area Council’s Workforce Housing Committee. The proposed project is the culmination of more than two years of work with city planners and the community. The plan will provide 760 new units of housing, including 103 designated as affordable. In addition to providing housing, the project also includes a $57 million investment to upgrade infrastructure on site, including new service roads, a dockyard for marine services, Bay Trail extension, $35 million to rebuild a crumbling seawall, and more. The Bay Area Council thanks the City of Alameda for approving this project and doing its part to provide housing for our growing region. Have a significant housing project you’d like us to consider for endorsement? Please contact Senior Policy Manager Rachele Trigueros.

TRAFFIC RELIEF MEASURE HEADING TO SAN MATEO COUNTY BALLOT

Worsening traffic plagues the Bay Area, and San Mateo County commuters suffer from some of the worst of it. A 2017 Metropolitan Transportation Commission report found that “eight of the 10 most crowded commutes (in the Bay Area) are routes to or from the Bay Bridge or Silicon Valley.” San Mateo County voters soon may be able to do something about it.

This week, the San Mateo County Transit District (SamTrans) Board of Directors voted to place a measure on the November ballot that will reduce traffic congestion on Highways 101, 280, and others in the county; repair potholes and address local traffic; improve bicycle and pedestrian facilities; expand regional transit connections; and construct grade separations where Caltrain tracks intersect with local streets. If voters pass the measure, the half-cent sales tax would generate $2.4 billion in revenue dedicated to improving transit for years to come. The county Board of Supervisors, which is scheduled to meet July 24, still must approve the plan before it goes on the November ballot. The Council worked with a coalition of companies the corridor to help develop the measure, and we applaud the SamTrans Board of Directors for its efforts to relieve congestion and address transit challenges in the region.

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Council Urges Legislative Action for Secure, Reliable Energy Future

The Bay Area Council on Friday, June 15 submitted the following letter urging Gov. Brown and state legislative leaders to take immediate action on comprehensive reforms that can provide for a secure energy future for California’s businesses, consumers and the economy.

Dear Governor Brown and Legislative Leaders,

The Bay Area Council urges you to take immediate legislative action to preserve healthy, reliable, and safe public and investor-owned utilities so they can continue to power our economic success story, create new jobs and invest in the delivery of clean renewable energy. We have already witnessed the negative economic effects of delayed action in the face of a changing climate, extreme weather events and the resulting wildfires. Not since the rolling blackouts of 2000/2001 have we experienced such a dire threat to our utilities and as a result the economic well-being of our region and our state.

The Bay Area Council and our member companies depend on a reliable and secure energy supply. This can only be guaranteed if the infrastructure that generates and moves that energy is resilient enough to withstand the “new normal” of extreme weather and a changing landscape that you identified in your joint statement earlier this year. We applaud your vision and leadership and support solutions that address the principles you established:

Modernize vegetation and forest management practices for fire prevention and carbon sequestration.

With increased suburban and exurban development in close proximity to fire-prone landscapes across our region and state, we support the updating of vegetation and forest management practices. We must implement these new practices as quickly as possible to decrease the risk of disasters like the 2017 North Bay fires.

Ensure utility and public infrastructure is designed, constructed and operated to maximize resiliency to extreme weather events and natural disasters.

We know that without a modern and resilient grid California cannot maintain a healthy growing economy or meet any of our climate objectives. We support establishing the necessary standards and oversight measures to keep our grid strong in the face of extreme weather so it can continue to power what is now the 5th largest economy in the world.

Enhance the emergency response system, including consideration of mutual aid resources, telecommunications, 911 systems, and community needs, particularly in low income and vulnerable rural and urban communities.

Knowing that the community they belong to is safe, and has safe reliable power, is a basic need for any company seeking to grow and create new jobs.  We support increased investments in first response infrastructure to meet the demands of what has become a year-round fire season.  As I write this letter 11 named fires are burning in California from Shasta Trinity to San Diego.

Examine the availability of insurance products in high wildfire areas in light of increased risks from climate change.

As high wildfire areas continue to expand, and more people choose to live in those areas, insurance options are becoming increasingly limited for many consumers. We support your work to find solutions that help increase access to affordable insurance.

Update utility rules and regulations for utility services in light of changing climate and the increased severity and frequency of weather events.

The current rules under which our utilities operate were crafted at a time when man-made climate change was a topic discussed in theoretical terms, and its projected impacts were educated guesswork. Today we are living with those impacts and witnessing them every day, from the millions of dead trees across our state to the extreme fluctuations in our rainfall and the emergence of 70 mph-plus Santa Ana-type winds in Northern California.  If our utilities are to continue to modernize their clean energy generation and transmission capacity and if California is to continue to lead the world in this effort, we must recognize the “new normal” around us and have an honest conversation about liability reform and shared risk across all stakeholders.

The Bay Area has just 20 percent of California’s population but we provide 40 percent of the personal income taxes paid to the state. Without the economic success of our region, California cannot succeed, and without a safe and reliable source of energy delivered by our utilities, our businesses cannot succeed. Absent the reforms described above, particularly liability reform and reform of the perverse doctrine of inverse condemnation that makes our utilities liable for fire damages even if they have followed all the rules to the letter of the law, nobody will be able to generate and supply power in California let alone invest in upgrading to a cleaner, lower carbon grid.

We urge immediate action and comprehensive reforms otherwise we risk an existential threat to our economy and our state.

Sincerely,

Jim Wunderman

President & CEO

Bay Area Council

 

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Senate Minority Leader Patricia Bates

Assembly Minority Leader Brian Dahle

Senator Ben Hueso, Chair, Senate Standing Committee on Energy, Utilities and Communications

Assemblymember Chris Holden, Chair, Utilities and Energy Committee