Bay Area Council Blog

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Leveraging Tech, Innovation to Address Regional Challenges

The Bay Area Council this week was thrilled to partner with member company TechCrunch on Disrupt SF 2018, one of the technology industry’s biggest annual gatherings highlighting the game-changing founders, new startups and emerging trends shaping and leading the tech sector. As part of a speaker lineup that included Priscilla Chan, Ashton Kuchar and Daru Kawalkowski, Council CEO Jim Wunderman led a conversation on how technology and innovation can be leveraged to address the many challenges the Bay Area faces even as the economy booms.

Wunderman was joined by Carla Boragno, Vice President of Site Services for biotech giant Genentech and Co-Chair of the Council’s Housing Committee; Michael Matthews, California Director of Public Policy for Facebook and Co-Chair of the Council’s Transportation Committee; and, Vikrum Aiyer, Head of Public Policy & Strategic Communications for Postmates. The discussion delved into the role business can play in working with elected and government leaders to address housing, transportation, climate resiliency and workforce development challenges. While the challenges are real, Wunderman also shared findings from the recent Bay Area Council Economic Institute’s 2018 Economic Profile that examines the overall strength of the region’s economy.

Watch videos from the action-packed, three-day extravaganza>>

 

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CA Faces Staggering $1 Trillion Infrastructure Funding Gap

California’s vibrant economy and communities rely on an extensive infrastructure network of highways, bridges, ports, levees, rail lines, schools, hospitals, and energy, water, and wastewater systems. Over the past several decades, much of the state’s infrastructure has been inadequately maintained and is facing a backlog of deferred maintenance, even as new needs arise. Funding has not kept pace with aging infrastructure or the demands of a growing economy and population. On the current spending trajectory, California’s infrastructure funding gap will reach $1 trillion by 2050, according to a new report by the Bay Area Council Economic Institute that examines how public private partnerships (P3) can help close the gap.

The Economic Institute’s earlier research on this exciting form of investment was instrumental in guiding UC Merced’s use of P3s to finance and begin work on its massive campus expansion. Investment in infrastructure has one of the highest economic multipliers of any form of government spending, but due to California’s failure to invest in and maintain its infrastructure at all levels, the state is putting its future growth and prosperity at risk. The Economic Institute’s latest report examines how governments can innovate, attract investment, and improve infrastructure performance through the use of public-private partnerships.

Read Public-Private Partnerships in California: How Governments Can Innovate, Attract Investment, and Improve Infrastructure Performance>>

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Hetch Hetchy Tour Highlights Latest Threat to the System

Bay Area Council Water Committee Chairs Andy Ball and Jim Levine this week led a coalition of business leaders on an overnight tour of the Hetch Hetchy regional water system, the Bay Area’s largest single source of fresh water. The Hetch Hetchy system serves 2.7 million Bay Area residents with some of the cleanest tap water in the world, and generates carbon free electricity for San Francisco’s public infrastructure such as MUNI, SFO and government buildings. The tour was organized by the San Francisco Public Utilities Commission, the Bay Area Council and the San Francisco Chamber of Commerce, and traveled to the Pulgas Water Temple at Crystal Springs Reservoir, the Tesla Portal UV Water Treatment Facility, and the Moccassin Powerhouse, and culminated with an overnight stay at the scenic cabins at Hetch Hetchy Reservoir.

In 2012, the Bay Area Council led efforts to defeat a San Francisco-ballot measure to drain the Hetch Hetchy reservoir, and is today working to defend water from the reservoir against a misguided effort by the State Water Board that would result in a vast curtailment in the region’s dry-year water supplies. To engage on the Bay Area Council Water Committee, please contact Vice President Adrian Covert.

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Gavin Newsom Outlines Priorities at Council Forum

Lt. Gov. Gavin Newsom visited the Bay Area Council on Tuesday to talk about his bid to become California’s next governor and share his insights on the issues that he is making a priority for the campaign. The former San Francisco mayor highlighted three main “buckets” on which he is most focused, including the state’s growing public pension liabilities and an aging population, energy and climate change, and the workforce implications of changing technology and globalization.

Newsom said pension and other post-retirement benefit obligations are among the fastest-growing segment of municipal spending, squeezing out other important priorities and putting cities at increasing financial risk. He talked about the challenges for the state in meeting aggressive clean energy and climate goals and said the advent of artificial intelligence and other technologies along with increasing economic globalization will pose major policy challenges for the next governor in addressing the impact on the current and future workforce.

In a wide-ranging conversation moderated by Council CEO Jim Wunderman, Newsom also discussed California’s housing crisis, homelessness, the need for more investment in early education, and the opportunity to leverage public private partnerships in addressing the state’s massive infrastructure needs, among other topics. The gubernatorial frontrunner emphasized the importance of pursuing regional solutions to vexing problems like homelessness that don’t abide county lines. He was extremely critical of a measure on the November ballot in San Francisco that would raise taxes on business to increase spending on homeless programs and services by up to $300 million – a misguided approach he said will only make the problem worse.

The forum was one of a series that the Council has convened with gubernatorial candidates since the spring, and we soon will be announcing a final forum with Republican candidate John Cox.

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SF Mayor Breed Addresses Council Members at Annual Meeting

It was a double-header at the 2018 Annual Members Meeting this week (Aug. 27) as Bay Area Council members gathered at AT&T Park to hear from keynote speaker San Francisco Mayor London Breed and later fielded fly balls during batting practice. Council Chair and Kaiser Permanente Chairman and CEO Bernard J. Tyson welcomed Mayor Breed, reflected on the Council’s many accomplishment during his first year as Chair and outlined his vision for the final year of his term. Breed, the city’s first African American female mayor, shared her vision and plans for the city. Homelessness, building more housing, improving our transportation systems, and youth employment programming were among the top issue areas she highlighted.

Mayor Breed emphasized the importance of regional solutions to these challenges and the need to work collaboratively with the other big city mayors. Following the meeting, members enjoyed a private reception in “Triples Alley” as they watched the Giants batting practice from the field before cheering them on as they defeated the Arizona Diamondbacks. Special thanks to Giants CEO and Bay Area Council Executive Committee member Larry Baer for hosting. Thanks also to all of our members, whose support and engagement are the lifeblood of the Bay Area Council.

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Council Urges Governor’s Signature on Key Bills

It ain’t over until Gov. Brown signs, but the Bay Area Council this week was still cheering one of its most successful legislative campaigns in recent memory. Three bills the Council sponsored and a number of others that were a high priority for us have all cleared the legislature and now await the Governor’s final decision. Housing, which was the Council’s major focus heading into this year’s legislative session, was also a big winner. Two bills the Council sponsored—SB 1227 (Skinner) and SB 828 (Wiener)—will expand affordable student housing and increase accountability on cities to meet their housing obligations, respectively. A third bill the Council strongly supported (AB 2923, Chiu and Grayson) will allow BART to develop up to an estimated 20,000 units of housing on land it owns or controls near its rail stations.

“It’s starting to sink in that California has a devastating housing crisis,” said Jim Wunderman, President and CEO of the Bay Area Council. “We applaud the legislature for approving these bills and we strongly encourage Gov. Brown to sign them. While this represents a good step forward in addressing a problem that is hurting millions of Californians and threatening our economy, we really need a big leap forward to remove the myriad regulatory and other barriers that are a huge obstacle to building the millions of new housing units we need. We’re not done, yet.”

The Council hailed the passage of AB 2596 (Cooley), a bill the Council co-sponsored with the Greater Sacramento Economic Council that authorizes the creation of a statewide economic development strategy. It would help improve the state’s economic competitiveness, bolster California’s resilience to an economic downturn and expand economic opportunity.

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Council Hosts India’s Technology Minister

On August 28 the Bay Area Council hosted a private dinner in Palo Alto with the Hon. Ravi Shankar Prasad, India’s Minister of Electronics, IT, Law and Justice and top Silicon Valley executives. Discussion covered a range of topics including infrastructure, data policy, and India’s accelerating digital transformation. Part of the Council’s growing focus on India, the dinner was supported by Council Executive Committee member Bill Ruh, CEO of GE Digital, and Dr. Nandini Tandon, CEO Of Tenacity Global. Together, they co-chair the Council’s ongoing India project. In his remarks, Prasad said the Bay Area Council “should be the bridge between the Bay Area and India.”

The Council is working to better connect Bay Area companies with opportunities in India, which has the highest growth rate (7.7 percent) of any major country and now boasts the world’s fifth largest economy. A centerpiece of the Council’s current work is a report being prepared by the Economic Institute on economic reforms instituted under Prime Minister Narendra Modi, as well as business sectors that connect most strongly with the Bay Area and offer the largest opportunities. For more information on the Council’s India work, please contact Senior Director Sean Randolph.

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Flawed Plan Would Decimate Bay Area Water Reliability

(This opinion piece ran in the San Francisco Chronicle on Aug. 28, 2018)

By Jim Wunderman

Apart from a famous Mark Twain quote involving whiskey and fighting, no cliché about California water is more abused than the phrase “water wars.” However, in the instance of the State Water Board’s plan to restore the San Joaquin River, the label fits. War has been declared on the Bay Area’s largest source of freshwater, with grave implications for residents and businesses that go way beyond letting your lawn go brown.

At issue is a proposal to increase freshwater flows on the San Joaquin River. The plan targets the San Joaquin’s three major tributaries—the Stanislaus, Merced, and Tuolumne Rivers—and would require the farms and cities that divert water from those rivers to scale back their diversions to leave more water for the environment.

The Bay Area has a big dog in this fight. The Tuolumne River is the region’s single largest source of freshwater, used by 2.7 million people in 33 cities across Alameda, San Francisco, Santa Clara, and San Mateo counties.

The San Francisco Public Utilities Commission, which manages the Bay Area’s Tuolumne River supplies, estimates the Bay Area could be required to provide as much as 52 percent of any new flows mandated by the State Water Board’s plan, even though the region only diverts about 14 percent of the river’s water. Central Valley farmers, meanwhile, divert more than three times that volume.

Under this scenario, huge portions of the Bay Area would immediately face water rationing on the order of 20-30 percent beyond the conservation rates achieved during the recent drought. Since the Bay Area’s Tuolumne River water users are already among the most frugal in California (residents use just 54 gallons per capita per day compared to the statewide average of 82 gallons), some communities would be forced to achieve water use rates unseen anywhere in the developed world. Daly City, Hayward, Millbrae, Palo Alto, Redwood City, and even San Francisco could all be forced to impose emergency moratoria on building everything from schools and parks, to hospitals and housing.

The State Water Board has dismissed these concerns with the extraordinary argument that these very hardships would force the Bay Area to invest in creating alternative water supplies. Assuming developing alternative supplies at this scale is even possible or affordable, the Water Board plan is slated to go into effect in 2022. The Bay Area could be forced to operate under severe water rationing for possibly decades.

There’s a huge irony in the state using environmentalism to push policies that will inhibit growth in some of California’s most sustainable locales while promoting sprawl elsewhere. Perhaps most troubling, the plan provides no guarantees that water left in the Tuolumne River wouldn’t merely be diverted at downstream pumps operated by Central Valley farmers and Southern California users.

Since the Gold Rush, California has awarded legal rights to about five times more water than nature delivers. It’s no surprise that water policy decisions are rife with legal conflict, and rivers that once sustained hundreds of thousands of salmon have been reduced to tepid puddles. Without some sort of grand bargain that connects conservation and new environmental water with major new investments in storage, habitat, recycling, and conveyance, piecemeal efforts like the State Water Board’s plan are likely doomed to wallow for decades in fruitless litigation. Bay Area residents and businesses should contact California Natural Resources Secretary John Laird and urge him to reject the current Bay-Delta Water Quality Control Plan.

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Stupski Foundation Grant Propels Occupational Councils

Innovative Occupational Councils (OCs) the Bay Area Council launched this year to address workforce gaps in key industries have exceeded expectations in just the first eight months, thanks in large part to funding from the Stupski Foundation Learning Grant. Operated by the Council’s Workforce of the Future Committee under the leadership of Co-Chairs Teresa Briggs of Deloitte, Glenn Shannon of Shorenstein Properties and Julius Robinson of Union Bank, the OCs have convened employers, educators, nonprofits and other stakeholders to address severe regional workforce shortages in the aviation, construction, healthcare and manufacturing industries. The program has included regular meetings of key stakeholders to identify ways to increase the talent pipeline for jobs in these industries, conducting in-classroom employer visits and organizing several curated job fairs. The Committee has also begun identifying best practices for scaling up the OCs and ensuring they can be sustained.

The Workforce of the Future team is always looking for additional employers to lend valuable industry insight and expertise to the Occupational Councils. For more information, please contact Senior Vice President Linda Bidrossian.

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Key Council-Backed Housing Legislation Advances

Legislation (SB 1227, Skinner) the Bay Area Council sponsored to address a critical statewide shortage of affordable student housing is headed to Governor Jerry Brown’s desk for his signature, along with another bill (AB 2923, Chiu and Grayson) the Council supported that could produce an estimated 20,000 units of new housing ideally situated near the BART mass transit system. The bills were among a handful the Council either sponsored or supported this year to address California’s historic housing shortage and affordability crisis. Another important housing bill (SB 828) by Sen. Scott Wiener that the Council co-sponsored also appeared poised for the Governor’s signature following an Assembly vote today that sends it to the Senate for concurrence.

“It’s starting to sink in that California has a devastating housing crisis,” said Jim Wunderman, President and CEO of the Bay Area Council. “We applaud the legislature for approving these bills and we strongly encourage Gov. Brown to sign them. While this represents a good step forward in addressing a problem that is hurting millions of Californians and threatening our economy, we really need a big leap forward to remove the myriad regulatory and other barriers that are a huge obstacle to building the millions of new housing units we need. We’re not done, yet.”

SB 1227 authored by Sen. Nancy Skinner allows housing built for students to receive a 35 percent density bonus as long as 100 percent of the units are dedicated to students, a minimum 20 percent of the units are reserved for very low-income students, and students experiencing homelessness get priority. The legislation is aimed at bringing relief for the estimated 800,000 college students statewide that recent studies have found are either homeless or housing insecure.

“College students are increasingly priced out of California’s extraordinary housing prices, threatening the Golden Goose of our economy,” said Matt Regan, Senior Vice President in charge of housing policy for the Bay Area Council. “If the world’s most promising students can’t afford to study here, they’ll go someplace else. This bill gives colleges and universities new tools to build affordable off-campus housing. We want than Sen. Skinner for her leadership in addressing our housing crisis.”

“SB 1227 will encourage the construction of more housing and more affordable housing for college students up and down the state,” said Senator Skinner. “Students deserve to focus on learning instead of worrying about whether they have a place to live.”

The Council also hailed the passage of AB 2923 by Assemblymember David Chiu (San Francisco) that would require the elected BART Board of Directors to establish guidelines for transit-oriented development for BART-owned land at or around BART stations. Cities would then update their local zoning to be consistent with these standards while retaining control over community design standards and final permitting authority. It’s estimated that BART-owned land could support as much as 20,000 new housing units. The Council made passing AB 2923 a major priority during this legislative session.

“This bill kills two birds with one stone, producing badly needed housing near transit that encourages commuters to leave their cars behind,” said Wunderman.

With the legislative session coming to a close, the Council was still working to win passage of SB 828 (Wiener), which would reform the state’s housing allocation system and hold cities more accountable for meeting their local housing obligations. Another bill (SB 831, Wieckowski) the Council sponsored this year to promote construction of accessory dwelling units, also known as granny or in-law units, previously fell short of the votes needed for passage.

The Council on Tuesday also cheered the passage of AB 2596 (Cooley). The bill, which the Council co-sponsored with the Greater Sacramento Economic Council, would authorize the creation of a statewide economic development strategy. It would help improve the state’s economic competitiveness, bolster California’s resilience to an economic downturn and expand economic opportunity.

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About the Bay Area Council

The Bay Area Council is a business-sponsored, public-policy advocacy organization for the nine-county Bay Area. The Council proactively advocates for a strong economy, a vital business environment, and a better quality of life for everyone who lives here. Founded in 1945, the Bay Area Council is widely respected by elected officials, policy makers and other civic leaders as the voice of Bay Area business. Today, more than 300 of the largest employers in the region support the Bay Area Council and offer their CEO or top executive as a member. Our members employ more than 4.43 million workers and have revenues of $1.94 trillion, worldwide. Learn more at www.bayareacouncil.org.