Bay Area Council Blog

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NEW REPORT PUTS DAMAGE TOLL FROM OVERDUE MEGA STORM AT $10.4 BILLION

From drought to deluge, California and the Bay Area can expect increasingly dramatic weather swings as the effects of climate change become more pronounced and dangerous. Against that backdrop, the Bay Area Council Economic Institute today (April 20) released a new study estimating the Bay Area would suffer a minimum of $10 billion in economic damages from an extreme storm that many experts believe is overdue—an amount rivaling that of the 1989 Loma Prieta Earthquake.

The damage would be severe along the bay’s thousands of acres of waterfront land, where companies from Facebook to Google employ hundreds of thousands of workers, 355,000 residents have homes and key economic and civic infrastructure is located, including ports, airports, and water, energy, sewage and transportation facilities. The report relies on existing scientific models that envision an “atmospheric river” dumping the equivalent of 10 Mississippi Rivers on the region over 10 days, causing widespread flooding and disruption to road and air travel.

Santa Clara, San Mateo and Marin counties would be hardest hit, with as much as 70 percent of the losses concentrated in low-lying Peninsula and Silicon Valley areas, among the region’s most economically productive corridor. The $10.4 billion estimate includes:

  • $5.9 billion in structural damage
  • $4.2 billion in damage to building contents
  • $128 million in loss of due to electrical facility damages
  • $85.7 million in costs due to airport closings or flight delays
  • $78 million in costs due to road closures.

Read the full report: Surviving the Storm>>

The costs could be much higher. The estimate does not include the long-term effects of sea level rise, which would magnify the impacts of an extreme storm, nor the economic cost of lost worker productivity.

“Protecting our residents and businesses from natural disasters is a high priority in San Jose,” San Jose Mayor Sam Liccardo said. “Continued regional, state, and federal collaboration to best prepare for Bay flooding from the likes of a 150-year storm is essential to remaining the world’s center of innovation and retaining our economic vitality in the decades ahead.”

“This report highlights the real dangers we face from extreme weather events and climate change in the Bay Area,” San Francisco Mayor Ed Lee said.

“Knowing that we are a coastal city in a region already vulnerable to disaster and that climate change is impacting weather patterns around the globe, we have to take steps to protect ourselves from the inevitable,” Oakland Mayor Libby Schaaf said. “That means heeding the warnings and making smart local and regional investments in our physical and technological infrastructure that build the resiliency we need to safeguard our residents and communities from potential physical and financial devastation.”

The study finds that the scale of the threat is not matched even closely by the level of resources available to fortify the region’s shoreline and flood protection infrastructure, both through manmade structures such as seawalls and levees and natural barriers such as wetlands. At the same time, state, regional and federal funding for flood and storm protection has dropped precipitously.

“Inaction could cost our economy dearly” said Dr. Sean Randolph, one of the report authors and Senior Director of the Bay Area Council Economic Institute. “The $10.4 billion is just a snapshot. The economic consequences of a mega storm, with a magnitude and impact comparable to Hurricane Katrina or Super Storm Sandy, could double when the regional effects of flooding in the Delta are factored in. Much of our existing flood protection infrastructure is aging, and investment in new protective strategies is needed. We cannot afford to be unprotected.”

Further exacerbating the threat is a dangerous lack of public awareness and urgency about the problem, as California understandably focuses its immediate attention on the historic drought. However, the report observes that the Bay Area sits right in the cross hairs of the timeframe when experts forecast the next extreme storm will hit.

“We can’t say we weren’t warned,” said Jim Wunderman, President and CEO of the Bay Area Council.” The Bay Area is past due for a major storm event unlike anything seen since the Gold Rush and potentially as damaging as a major earthquake. Rather than await the inevitable Sandy or Katrina-type event, the Bay Area must proactively reinvest in the levees, sea walls and wetlands needed to defend our homes and businesses. With a little vision, the Bay Area can position itself to become the most climate resilient coastal region on earth.”

The report offers a series of specific and actionable recommendations at the regional, state and federal levels for bolstering the Bay Area’s ability to weather a mega storm and minimize catastrophic economic losses. Among the general recommendations:

  • Support the development of cost-effective structural and non-structural strategies, tailored to the region’s variety of local environments, to reduce flood risk.
  • Identify new and expand existing local, regional, state and federal funding for flood infrastructure investment.
  • Identify and prioritize projects necessary to protect key economic assets such as transport, power, water, wastewater, employment centers, and communications infrastructure.
  • Incorporate community resilience to extreme storms into Hazard Mitigation and General Plans.
  • Identify ways to leverage new development under regional growth plans to provide local flood protection and reduce economic vulnerability.
  • Incorporate climate change predictions, including sea-level rise and changes in rainfall, into flood risk analyses.
  • Support development of accurate weather and flood forecasting, particularly for lead time on atmospheric rivers.

In response to the report findings, the Bay Area Council and other key stakeholder groups are launching a regional public information campaign — Our Bay on the Brink — aimed at raising awareness among businesses, elected officials and local community leaders about the potentially devastating consequences and possible solutions. To learn more, visit, www.ourbayonthebrink.com.

The report was created in partnership with California Coastal Conservancy, The Brattle Group, AECOM, Bay Area Flood Protection Agencies, Gordon and Betty Moore Foundation and Gensler.

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NEW REPORT EXAMINES CA’S READINESS FOR ADVANCED COMMUNICATIONS, ENERGY TECHNOLOGIES

Since 1995, monthly Internet traffic has increased by a factor of 450,000. By 2018, there will be 2 billion connected devices, from wearable technologies to industrial sensors. Between 2013-2018, global annual cloud storage is projected to increase 300 percent. Every 11 seconds, a new rooftop solar system is installed in Northern California. California’s electric vehicle sales account for 40 percent of total sales nationally.

These are just a few of the jaw-dropping statistics that are included in a report the Bay Area Council Economic Institute released on Monday (April 13) that examines California’s readiness for the growing tsunami of advanced communications and energy technologies that consumers and businesses are demanding and that aggressive state climate change goals require. The Economic Institute produced the report in response to strong interest from a broad range of Bay Area Council members and at the specific request of the Executive Committee, which last year elevated the issue to one of the Council’s lead policy priorities.

The report – 21st Century Infrastructure: Keeping California Connected, Powered and Competitive – finds that many of the rules and regulations California has in place today to manage our communications and energy networks were developed decades ago before the mind-boggling proliferation of digital and mobile technologies and before we moved aggressively to find cleaner ways to power our state. The report also finds that California needs new approaches to managing the exploding growth of digital and other communications technologies and rapid changes in how the state produces, stores and delivers energy to its 37 million residents, and offers a series of recommendations for how to get there.

Download the full report>>

See a short video on the report>>

Read the press release summarizing the findings and recommendations>>

Along with the report, the Council hosted a robust discussion on these issues with top energy and communications technology leaders and experts, including PG&E CEO Tony Earley and AT&T California President Ken McNeely.

On the energy front, Lelon Winstead, Managing Director for Accenture, led a conversation with Michael Jung, Policy Director for Silver Spring Networks; Geoff Sharples, Director of Internet of Things for Energy and Industry at Intel; and Matt LeCar, Principal Consultant for GE Energy Consulting. On the communications side, former California Public Utilities Commissioner Rachelle Chong moderated a discussion with Louis Fox, President and CEO of the Corporation for Education Network Initiatives in California; Michael Sesko, Director of Corporate Strategies for The Climate Corporation; Cupertino Mayor Rod Sinks; and Jonathan Spalter, Chair of industry group Mobile Future.

Watch the discussion>>

To participate in our 21st Century Infrastructure policy work, contact Senior Vice President Michael Cunningham.

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CALTRAIN MODERNIZATION KEY TO COUNCIL’S COMMUTE RELIEF GOALS

Continuing its push for commute relief in the booming Silicon Valley-San Francisco corridor, the Bay Area Council in partnership with the Silicon Valley Leadership Group (SVLG) and the San Mateo County Economic Development Association (SAMCEDA) led a delegation from the Caltrain Commuter Coalition for a series of meetings in the Capitol this week (April 16). The Coalition is composed of employers that recognize Caltrain modernization as an essential component of commute improvement, which itself is critical to sustaining the economic engine in this corridor. The planned Caltrain electrification project will allow faster and more frequent service; longer trains and level-boarding will add additional capacity and speed.

The delegation, which was jointly led by Council President and CEO Jim Wunderman, SVLG President and CEO Carl Guardino, SAMCEDA President & CEO Rosanne Foust, and Caltrain Executive Director Jim Harnett met with Transportation Secretary Brian Kelley, Governor Brown’s legislative advisor Michael Martinez, and transportation policy and budget leaders in the Assembly and Senate, reinforcing awareness of the economic and environmental benefits of electrifying Caltrain and requesting support for continued state funding. Learn more about the Caltrain Commuter Coalition at www.caltraincoalition.com or contact Bay Area Council Senior Vice President Michael Cunningham.

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SUMMIT EXPLORES INTERSECTION OF HEALTHCARE INNOVATION, VALUE

The Bay Area is a global center for healthcare innovation, rapidly developing technologies that are revolutionizing the way we access, provide, and think about healthcare. While innovations like specialty drugs and medical devices are providing unprecedented treatment of diseases, there are also challenges to financing access to these advancements. Other consumer-directed technologies are empowering patients to engage in their personal health management and hold promise for improving the value of care. And yet, a big question remains about whether we are actually committed to paying for value.

That question was posed by Dr. Micah Weinberg, President of the Bay Area Council Economic Institute, in opening remarks at the San Francisco Business Times’ Healthcare Leadership Summit on Friday (April 10). It also was the focus of a panel discussion with Dr. Kent Bradley, President of Safeway Health and Co-Chair of the Council’s Healthcare Committee, as well as leaders from Council members Hill Physicians Medical Group and Sutter Health, and from Rock Health and PBGH. The panelists analyzed how health innovations can best help medical professionals deliver the most comprehensive care and encourage patients to manage their own health outside of a care facility.

Within the theme of shifting from healthcare to overall population health, the Summit concluded with Dr. Bradley announcing the imminent launch of Bay Healthy, a new campaign created by the Bay Area Council in partnership with the San Francisco Business Times. This campaign will leverage the strength of the employer community to make an impact on the health of the Bay Area by encouraging employees to make one small commitment to improve their health. More details coming soon. To engage in the Council’s Healthcare work, please contact Economic Institute President Micah Weinberg.

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NEW URGENCY GATHERING ON BART’S FUTURE

New urgency is gathering around the future of the Bay Area’s largest and most important mass transit system. A report this week by the San Francisco Chronicle’s Matier & Ross described how the system’s tracks and supporting ties are worn beyond standards. We already know that BART’s rail cars are the oldest of any comparably sized mass transit system in the nation. The Bay Area Council, which was instrumental in the creation of BART, has long advocated for a larger and stronger system.

A report that our Bay Area Council Economic Institute currently is developing will examine the economic costs and impacts to the region of a full-day BART shutdown. We also are participating in early discussions regarding a possible bond measure to help fund BART’s $4.8 billion system improvement program. BART is integral to the economic success of the region and the system remains a remarkable transit success story, routinely serving over 420,000 daily trips. But BART’s aging pains are becoming impossible to ignore, resulting in shorter, more crowded trains and growing services interruptions. It’s an issue on which we are continuing to focus. To engage in our transportation policy work, contact Senior Vice President Michael Cunningham.

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NEW BUSINESS DEVELOPMENT DIRECTOR GROWS BAC CHINA TEAM

Furthering our mission of building bridges with business communities around the world and keeping the Bay Area competitive, we are pleased to announce that Alex Foard, of our own Economic Institute, has taken on the role of Director of Business Development for the Yangtze River Delta region of China. With Alex established in China, the team is pursuing several ambitious initiatives to expand the Bay Area’s access to this rapidly developing entrepreneurial culture. The need for a larger, boots-on-the-ground presence for the Bay Area has never been more critical.

After arriving, Alex reported that local governments have successfully helped build economic ecosystems that follow the model of the Bay Area’s innovation system. Speaking the same language and sharing the same economic goals with these rapidly growing areas is a critical advantage for the Bay Area, in that the companies there naturally look to partner with our companies here. As the incredible entrepreneurial activity and talent in the Yangtze Delta Region grows, this should be an even greater strategic advantage for our companies. The Global Programs team is proud to help bridge the Bay Area with this technology-driven business environment and looks forward to an exciting year of growth in China. To engage in our Global Programs work, contact Chief of Global Business Development Del Christensen.

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HOUSING DROUGHT REACHING CRISIS PROPORTIONS

It seems to be an almost daily occurrence in recent months when another report or study is released confirming what we have known for a long time: California and regions like the Bay Area, in particular, aren’t building enough housing to meet demand. What the recent data is revealing to us is not just the level of the shortage, but also the many consequences of our chronic under building, including displacement and community upheaval, overcrowding, poor health and educational outcomes, and generational poverty.

This week, the US Census Bureau released data on our region’s population growth, and not surprisingly it is growing, and growing fast. From 2010-14, Alameda County alone added 100,000 new residents. During that same period, the county averaged just 2,500 new housing permits per year (that’s permits, not units actually built). The massive competition for the very few available homes is impacting the ability of employers to attract and retain the best talent, and creating a serious financial burden for lower-income residents who are forced to spend an inordinate amount of their take home pay on rent. According to a recent report from the Legislative Analyst’s Office, California’s bottom quartile of earners spend an astronomical 67 percent of their take home pay on housing.

It is clear that our housing shortage is the principal driver of California’s nation-leading poverty rate. The time is long past for incremental solutions or piecemeal responses. We need a crisis-type response to what is clearly a critical situation. That means we need big, bold steps in the capitol to both incentivize local governments to build more housing and punish those that choose to ignore their housing obligations. Our housing shortage is every bit as serious as our water shortage and deserves similar attention from our elected leaders. To engage in our housing policy work, contact Senior Vice President Matt Regan.

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BAY AREA COUNCIL LAUNCHES NEW CYBER SECURITY ACADEMY

The Bay Area Council today (April 3) announced the launch of its new cyber security continuing education platform, the Bay Area Council Cyber Academy. The Cyber Academy, open to both members and non-members, provides valuable education for executives and managers of companies, organizations and agencies of all sizes, particularly for management, legal, financial, risk and operations professionals. Whether you are a CEO with employees or a line manager, you need to know more about cybersecurity, breaches, and the things you can do to help secure yourself and your company. For more information or to register, please visit the Bay Area Council Cyber Academy.

The first series of Cyber Academy courses to be held at the Bay Area Council in San Francisco will occur in May 2015, featuring three initial offerings:

  • Cyber Basics for the Non-Technical Professional (May 8 from 8:30 a.m. – 12:3 p.m.)
  • Legal Issues in Cybersecurity (May 8 from 1-5 p.m.)
  • Risk Management in Cybersecurity (May 15 from 8:30 a.m. to 3 p.m.)

To deliver the Cyber Academy, the Council has partnered with the National Cyber Security Alliance (NCSA) and the U.S. Department of Homeland Security (DHS) Office of Cybersecurity and Communications. Additional visiting lecturers from leading positions in industry will lead courses as part of the Cyber Academy.

According to the Safenet Breach Level Index Report, 2.2 million records have been stolen each day on average, up 233 percent from a year ago. Costs of data breach are rising dramatically, according to industry observers, as much as 15 percent per year. Additionally, industry losses from theft of intellectual property amount to billions, though difficult to measure due to the unreported nature of some cybercrimes that take the form of industrial espionage. For more information and to register for one or all three courses, please visit the Bay Area Council Cyber Academy.

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RESOURCES FOR HOW YOUR BUSINESS CAN CONSERVE WATER

Governor Brown signed an unprecedented executive order on Wednesday, requiring water agencies across California to reduce water use by 25 percent or suffer fines. The Governor’s announcement caps several weeks of increased regulations on water use across California following growing concerns over California’s worsening drought. On Wednesday (April 1), the Sierra snowpack measured just 6 percent of normal, crushing the previously record of 25 percent set just last year. The announcement came on the heels of the Bay Area Council Water Committee meeting at which the committee weighed in on the Proposition 1 (water bond) criteria language now under development and explored ways the business community can increase drought awareness.

In the face of the current drought, Bay Area businesses are stepping up to conserve. Comcast reduced water consumption in 2014 by nearly 25 percent over 2013 levels, saving 11 million gallons. Comcast’s largest source of savings resulted from a 50 percent reduction in water used for landscaping purposes, with additional savings from restricting vehicle washing. To learn more about what Bay Area Council members are doing to conserve, visit our Water Committee web page where we’ll be sharing conservation success stories. To share your conservation success story, contact Policy Director Adrian Covert.

To learn how your company can save water, visit the conservation page of your local water agency:
Santa Clara Valley Water District
San Francisco Public Utilities Commission
East Bay Municipal Utility District
Contra Costa Water District
Alameda County Water District
Marin Municipal Water District
Bay Area Water Supply & Conservation Agency (BAWSCA)

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TALKING NATIONAL DEFENSE WITH FORMER #3 AT DOD

Amidst dramatic nuclear talks with Iran, ongoing turmoil in Europe and the Middle East and recent cyber attacks on major U.S. companies, the Bay Area Council was pleased to host former U.S. Under Secretary of Defense Michèle Flournoy for a discussion on pressing national security issues. In her role as the third-ranking official in the U.S. Department of Defense (2009-2012), Flournoy served as principal adviser to Defense Secretaries Robert Gates and Leon Panetta. She currently leads the Center for a New American Security, a non-partisan think tank she founded to develop strong, pragmatic and principled national security policies. Bay Area Council board member and Edelman Global Sector Chair of Technology Maria Amundson moderated the discussion during which Flournoy gave her insights on the proposed Iran nuclear framework, China’s relationship with the U.S. and cyber security, among other topics.