Governor Newsom's New "Water Tax"

California Governor Gavin Newsom’s 2019-2020 budget contains several trailer bills, one of which is the Safe and Affordable Drinking Water and Exide Cleanup, which critics have branded as “the water tax.” This trailer bill raises several questions that need equal concern as whether the bill is a tax or a fee, or whether Californians can bear the burden of one more government charge of whatever name.

Here is a summary of such concerns.

Tax vs. Fee

Proposition 26 in 2010 made clear that a fee has specific characteristics. Primarily a fee benefits those who pay the fee. Everything else is a tax. The distinction is important because legislators can adopt a fee with a simple majority vote, while a tax requires a two-thirds vote of both houses for approval. This trailer bill charges a fee on the following entities located in the state. Amounts are complicated and seemingly fungible, since the legislature may change them with a two-thirds vote.

* Confined animal facilities excluding dairies: Fee is payable annually in an amount commensurate with the actual risk to groundwater from discharges of nitrate as determined by the working group set up for this purpose.

* Licensees whose name appear on the label of bulk or packaged fertilizing materials: Fee is based on the dollar sales of fertilizing materials.

* Milk handlers: Handlers deduct the fee per hundredweight of milk from payments they make to producers of milk, even if the handler and the producer are one entity.

* Individual rate payers: The fee is collected by community water systems from the systems’ rate payers (water consumers) and remitted to the Water Resources Control Board.

A fee levied on all fertilizer producers, milk producers, and water customers in the state for the purpose of improving water systems in specific locations does not appear to abide by the direct benefit rule of Proposition 26; therefore, they look suspiciously like a “pollution tax” and open to legal challenge.

Perhaps in anticipation of challenges, the trailer declares adoption of the charges an emergency measure “for the immediate preservation of the public peace, health, safety, and general welfare;” thus, claiming that the charges fall under California’s regulatory police powers, not its taxing powers. Also, the trailer frames the charges as a “social justice” issue – i.e., equal protection under the law – by pointing to the unhealthy water systems located in “disadvantaged communities.”

Critics’ Alternative Funding Suggestions

Critics of this trailer bill maintain new fees to clean contaminated soil and upgrade water systems are not necessary. The state could use the current budget surplus or issue water bonds. Some say the state should do nothing but hold local water agencies responsible for inaction and incompetence. These are alternatives on which to ponder.

The intent of the trailer bill is to provide on-going long-term funds to maintain water systems, not to do a one-time fixing and cleanup with the budget surplus. Bonds are a way of raising money, but they are expensive and somebody, often property tax payers, needs to pay for servicing the bonds. Perhaps clean and effective water systems are the responsibility of local water agencies, but they have not been providing that in some communities; so the state views taking over agencies’ responsibility as a practical solution.

Problem That Needs Fixing

Governor Newsom visited Monterey Park to hear water concerns.

Governor Newsom visited Monterey Park to hear water concerns.

The state is dotted with communities served by unhealthy and inadequate water systems. An example is the Central Valley, where farmers and other residents rely on scarce and often contaminated groundwater. The scarcity comes from water diverted to benefit fish and Southern California residents. The contamination largely comes from nitrate and other substances that seep into the soil from agricultural operations. Another example is Vernon, a city with industrial roots located not far from downtown Los Angeles, where regulators allowed Exide, a car battery recycler, to pollute the ground for 33 years.

Soil cleanup and upgrading of water systems are needed. Does this trailer bill accomplish that?

What the Trailer Bill Says It Will Do

Here is a brief summary of what this lengthy trailer bill says it will do:

* Establish the Safe and Affordable Drinking Water Fund in the State Treasury to hold and allocate funds for the purposes indicated in the trailer bill. Funds will be dedicated to the uses spelled out in the trailer bill unless two-thirds of the members of each house vote to use the funds otherwise.

* Prioritize assistance to “disadvantaged communities and low-income households served by a state small water system or domestic well.” Prioritize use of funds for “costs other than those related to capital construction costs, except for capital construction costs associated with consolidation and service extension to reduce the ongoing unit cost of service and to increase sustainability of drinking water infrastructure and service delivery.”

* Provide grants, loans, contracts, or services to assist eligible applicants with water replacement when needed to “ensure immediate protection of health and safety” in the short term, and to develop and implement “sustainability” in the long term.

* Provide long-term funding for the costs of replacing, repairing, blending, or treating contaminated or failing drinking water sources; creating and maintaining natural means of treating and improving sustainable water quality; consolidating water systems; and extending drinking water services to other public water systems, domestic wells, or state small water systems.

* Ensure that agricultural operations observe the following requirements in relation to discharges of nitrogen that lead to nitrate formation that adversely impact drinking water: best efforts in implementation and practice of practicable treatment or control, monitoring and reporting, and applicable timelines. Operators cannot be held liable for contamination if they observe these requirements.

Can The Trailer Bill Fix the Problem?

* Costs to consumers not eligible to receive assistance from the funds generated by the trailer will go up, making drinking water less affordable.

* Water once intended for farmers and residents of the Central Valley is now going to Southern California sustain fish. It is not clear what this trailer intends to do about that. Maybe provide bottled water to residents indefinitely?

* Contamination of soil from current methods used in agricultural operations, as the trailer bill indicates, is difficult to control. Therefore, we need to expect contamination to be an on-going challenge necessitating on-going cleanup. Whether such cleanup should be funded by taxpayers would be for voters to decide.

Newsom's California Budget: RHNA on Steroids

Newsom California Budget

California’s newly elected governor announced his 2019-2020 budget on January 10, 2019. The $209 billion budget is 4% higher than the 2018-2019 $201 billion budget, and it expands funding for items such as “building a childcare infrastructure,” medical care for a greater number of Californians including undocumented residents, and housing production.

The Basics

Although all items in Governor Newsom’s budget deserve the public’s awareness, especially current hot-button items such as state debt and unfunded public employees pension liabilities, the Nine-County Coalition is especially interested in the governor’s plans for housing production. The big picture of the Governor’s strategy includes allocation of $1.3 billion for housing production, and could be summarized as follows:

* Cities and counties will not receive gas-tax (Senate Bill 1) money unless they meet their building quotas.

* The state’s general fund will receive a one-time allocation of $500 million to expand state loans to developers that produce moderate-income housing.

* Regional Housing Needs Assessment (RHNA) will be revisited to require higher housing production and increased state oversight of cities and counties housing performance. A $750 million one-time allocation will fund state efforts to “encourage” cities and counties to build more housing.

* $500 million will be allocated to help cities and counties build housing for the homeless. The state will streamline environmental review of new homeless shelters and identify state surplus property on which to build affordable housing.

* Expanded programs of infrastructure financing districts and use of federal Opportunity Zones will be encouraged to help poorer communities build housing and encourage developers with tax breaks.

Sticks and Public-Private Partnerships

The Governor wants more “sticks” along with “carrots” to solve the housing crisis, as exemplified by the withholding of gas tax funds and the call for an expanded RHNA.

Also, he wants private entities to provide housing funds, on the basis that labor-intensive large Bay Area employers are flooding the area with people that need a place to live. In response, Silicon Valley established a public-private partnership called Partnership for the Bay’s Future, which describes itself as follows:

The Partnership for the Bay’s Future is a collaborative effort aimed at advancing our region’s future by solving its interconnected challenges—housing, transportation, and economic opportunity.

The collaborative effort aims to expand and protect the homes of up to 175,000 households over the next five years, and preserve and produce more than 8,000 homes over the next five to 10 years.

The Partnership is being launched with the support of the San Francisco Foundation, the Chan Zuckerberg Initiative, the Ford Foundation, Local Initiatives Support Corporation (LISC), Facebook, Genentech, Kaiser Permanente, the William and Flora Hewlett Foundation, the David and Lucile Packard Foundation, and Silicon Valley Community Foundation.”

California for All?

Governor Newsom labeled his proposed 2019-2020 budget “California for All.” We understand his meaning: California for all income levels, not just for those who can afford the high housing prices. However, that label begs the question whether what the Governor is perpetrating is California for some, just not the same some. Are families with children that want a quiet yard and a car to transport the children included? Are the fast-disappearing neighborhood mom-and-pop enterprises challenged by taxes, regulation, and competition from the giant corporations included? Are those who fear the idea of public-private partnerships included? Given the efforts of Partnership for the Bay’s Future are Bay Area counties not in close proximity to “the Bay” included? We shall see.

CASA Compact Approved: Representation Takes Another Hit?

Directors of ABAG (Association of Bay Area Governments) voted on January 17, 2019, to authorize the Executive Board President to sign on to the CASA Compact (Committee to House the Bay Area). Vote was 21 Yes and 9 No. This win occurred in spite of serious concerns expressed by those who contributed public comments and by ABAG directors present at the meeting. A video of the meeting is available on the ABAG website.

CASA is a “15-Year Emergency Policy Package to Confront the Housing Crisis in the San Francisco Bay Area.” It is really a package of radical proposals prepared by the MTC/ABAG staff, intended to support legislation already initiated by the California legislature. At various times during the meeting directors indicated that the “ship had already sailed,” and ABAG’s only choices were to follow the ship by signing on to the CASA Compact or be left behind without any voice as to what happens in Sacramento.

Our Concerns

This website has expressed concerns about CASA since MTC/ABAG introduced the plan. Our concerns keep growing, not only about the CASA Compact specifically, but mostly about the inexorable march away from representative government. By not paying sufficient attention to the actions of legislators in Sacramento and the actions of regional agencies, we the people are voluntarily giving up our rights to representation. By not remembering that declarations of emergency – especially a long-term emergency, such as CASA’s 15 years – are often preludes to removal of rights and constitutional guarantees, we the people are falling into a well-known trap.

At the ABAG Executive Board Meeting of January 17, some directors revealed their view on representation: When they wear their local hat at their city or county meetings, they represent residents. When they wear their regional hat, they represent MTC/ABAG. Housing and transportation laws enacted by state legislators during the past five years have diminished the power of cities and counties, and enabled regions to create mandates that local jurisdictions must follow. Local hats representing residents become merely symbolic, while constitutional representation disappears.

Public and Directors’ Concerns

There were 65 public speakers at the ABAG Executive Board meeting of January 17. The majority of their comments fell into two categories: vehement opposition to CASA, and support for CASA because there was supposedly nothing else on the table to start the ball rolling to solve the housing crisis.

The majority of comments by ABAG Directors supported moving forward with CASA, again because there was nothing else with which to “do something” about the housing crisis, and besides, the ship had already sailed. Here are rough paraphrases of some of the Directors’ comments, followed by their vote on the CASA Compact. For information, also here is a summary of the counties that voted NO:

Candace Andersen, County of Contra Costa; Thom Bogue, City of Dixon; Monica Brown, County of Solano; Pat Eklund, City of Novato; Wayne Lee, City of Millbrae; Rafael Mandelman, County of San Francisco; Nathan Miley, County of Alameda; David Pine, County of San Mateo; Dennis Rodoni, County of Marin.

Directors’ Comments and Votes

Candace Andersen, County of Contra Costa: There are problems with mandating rent control, minimum zoning, and relinquishing city and county revenue streams to fund regional plans - NO

Jesse Arreguin, Berkeley: CASA’s process is not perfect, but unless we vote “yes,” we have no voice. A “no” vote also means loss of a funding sources - YES

Thom Bogue, City of Dixon: Small employers and landlords do not have room for more taxes. The finance part of CASA needs to work for these residents – NO

Monica Brown, County of Solano - NO

Cindy Chavez, County of Santa Clara: This CASA authorization is not an endorsement. There will be further opportunity later for outreach. Give robust discussion points to legislators so they can craft the laws – YES

Chris Clark, City of Mountain View: If ABAG says “no” we take ourselves out of the conversation. We need to share our thoughts with legislators and work with cities. YES

David Cortese, County of Santa Clara: MTC Executive Director must convey to legislators all comments made during this meeting, so that legislators know what to expect in the way of opposition to proposed legislation, and can best do outreach when time comes to place proposals for funding sources before voters – YES

Pat Eklund, City of Novato: Control demand via control of where the job are. CASA was put together without representation from a majority of cities, especially small cities. People are leaving because of high taxes. Developers are holding on to permits and not building anything. Corporations benefit unduly from Proposition 13, and reform is necessary - NO

Leon Garcia, City of American Canyon: We need to understand what a region is. We need a transportation summit. YES

Liz Gibbons, City of Campbell: CASA makes no mention of transportation, jobs location, labor costs. Additional sales taxes on individuals exacerbates the affordability situation - YES

Gibson McElhaney, City of Oakland: How is our vote tonight meaningful if the ship has already sailed? CASA does not adequately address middle-income residents, homeowners, housing quality, link of housing to jobs - YES

Barbara Halliday, City of Hayward. CASA is a start, but we need more time to address economic analysis of additional housing and infrastructure – YES

Dan Kalb, City of Oakland: At ABAG we play a role different than the one we play in our city halls. Here we think regionally. We need to add to CASA a requirement to fund undue rent increases. Tax abatements should only apply to below-market units, not any development. There should be no building outside growth boundaries - YES

Wayne Lee, City of Millbrae: Taxes are heaped upon individual taxpayers. Where are corporations? We need a multidimensional approach. We need to build where people want to live - NO

Jake Mackenzie, City of Rohnert Park: Everything in CASA has been in Plan Bay Area all along - YES

Rafael Mandelman, City & County of San Francisco: San Francisco supports a specific approach. CASA does not give enough thought to local behavior. Just focusing on zoning changes is not effective – NO

Nathan Miley, County of Alameda: NO

Raul Peralez, City of San Jose: We need to support CASA so we can move forward in finding funding sources. We need to demand that employers contribute in the funding - YES

Dave Pine, San Mateo County: People a leaving the Bay Area because of housing costs, so we need to act. CASA is like a rough draft or framework – NO

Rabbitt, County of Sonoma: People are leaving because there is no housing. If we had a health crisis, we would take action, so why not take action on the housing crisis. ABAG needs to act, since the ship has sailed - YES

John Rahaim, City & County of San Francisco: The entire region is unaffordable. We are voting on a framework. We should not be arguing details, but focusing on concept - YES

Belia Ramos, County of Napa: CASA is a tool box. We should move forward - YES

Dennis Rodoni: Marin County: NO

Carlos Romero, City of East Palo Alto: Local control has destroyed the Bay Area. We need to think regionally - YES

Rohnert Park Mayor: "We did not Matter"

In an earlier post, the Nine-County Coalition questioned who MTC Commissioners represented — the cities and counties that selected them, or the MTC agenda. This video of the Rohnert Park City Council meeting of January 8, 2019, in which the CASA Compact was discussed, illustrates that question.

Seated are Council Members Joseph Callinan (Vice Mayor), Gina Belforte (Mayor), Jake Mackenzie (also MTC Commission Chair), Susan Adams, and Pam Stafford. All Council Members expressed emphatic opposition to the CASA Compact.

* At video location 1:15:20 Council Member Adams asks “can Rohnert Park be cut out of this?” The answer is “no,” since legislation will follow akin to RM3 that would apply to all cities.

* At 1:40:38 Council Member Stafford states that Rohnert Park does not need or want what the CASA Compact imposes. One could not in good conscience ask Rohnert Park residents to pay $15 million in taxes to benefit someplace else.

* At 1:48:48 Council Member Callinan summarizes the situation: “Are you crazy? That is ridiculous! This CASA Compact is a joke!”

* At 1:52:07 Mayor Belforte says, “It feels like we didn’t matter. It feel like a community didn’t matter.

Throughout the video Council Member and MTC Commission Chair MacKenzie speaks of the need to think regionally, only once reluctantly saying that he will bring the concerns being discussed to the MTC.

If you agree with the Rohnert Park Council Members’ assessment of the CASA Compact, show up at the ABAG meeting of January 17, 2019 and state your case!

Solano County Residents Shed Light on MTC Obscurity

Residents of the Bay Area’s Solano County are presently calling attention to the following question: Who is in charge of what happens in a community – voters or bureaucrats? Leaving aside emotionally-charged language such as the NIMBY/YIMBY dichotomy, let’s focus on the responsibilities of people who theoretically represent a jurisdiction.

The Scenario

MTC Commissioner Spering

Here is the scenario. Nearly 70% of Solano County voters voted NO on Regional Measure 3 on the June 2018 ballot, since they did not think the $1 increase in bridge tolls would benefit their county. However, Solano County’s representative on the board of the Metropolitan Transportation Commission not only cast a YES vote for RM3, but called for a higher toll increase.

If we’re going to deliver the relief we’re seeking, we need to do more than $1 out of the chute...I don’t want anyone to hold the low numbers from Solano against me as we move forward. Jim Spering, Bay Area Toll Authority Workshop, 12/20/17, 43:27 and 46:30.

So, MTC Commissioner Jim Spering is aware of the wishes of his Solano County constituents; however, he seems to be following today’s agenda of ignoring constituents in favor of implementing policies that bureaucrats deem good for the entire Bay Area region. Is this behavior what our Founding Fathers intended? Or are representatives in a republic responsible for carrying out Constitutional wishes of constituents?

Further information on this scenario: The Solano County Board of Supervisors re-appointed Mr. Spering for another term on the MTC Board starting February 10, 2019. And here is where some Solano residents drew the line in the sand. Residents are determined to call attention to 1) the divergence between what residents want and what their representatives work to implement, 2) the secretive way selection committees at the city and county level appoint MTC Commissioners, and 3) the method by which Commissioner Spering was appointed.

Latest results:

The Solano County supervisors agreed to send a letter to a committee of area mayors in an effort to correct how Supervisor Jim Spering was nominated to serve on the Metropolitan Transportation Commission.

Whoever thinks “there is nothing we can do” is vastly mistaken! We hope residents of your county will want to help shed light on MTC Commissioners’ actions. We have prepared a brief one-page handout that might be of assistance.

Oppose the CASA Compact: Action Items

By Susan Kirsch, Livable California

The CASA Compact, often called a Coup, was developed in secret, benefits the rich and harms the most vulnerable. It will not solve the housing affordability problem, but will further destabilize communities, increase tax burdens, and weaken infrastructure for water and schools. Raise your voice! Stop the CASA Coup. Oppose the CASA Compact.

ACTIONS

1. Attend a meeting. Refer to the schedule below to find out when MTC is making a dog-and-pony pitch to your local mayors, cities, or city council members about CASA. Use public open time at the meeting to express OPPOSITION to the Compact.

CASA Meetings

2. Get Out The Vote(GOTV). Refer to the attached list of ABAG Executive Board members and find the ones from your city/county. If they are marked as "Uncertain" re: whether they'll vote to ENDORSE or OPPOSE the CASA Compact, email or call them (contact info is on the list). Ask if they've decided how to vote. Tell them why you hope they'll vote to OPPOSE. The goal is to get 18 or more votes (a majority) to OPPOSE to send a message to Sen. Scott Wiener and other legislators that the public is opposed to current plans to solve the housing problem.

3. Mobilize for the Thursday, Jan 17 ABAG Executive Board meeting when they will vote on the CASA Compact:

ABAG Executive Board Hearing on the CASA Compact Thursday, January 17, 2019 - Bay Area Metro Center, 375 Beale Street, SF 6:30-6:50 Press Conference in the lobby. Bring Signs. 7:00-9:00 pm Meeting. Pick up a Speaker’s Card.

a. Forward notice of the meeting to others.

b. Organize a carpool of people to come with you to the Press Conference at 6:30 pm. Stay for the meeting. Bring signs with one of these messages or a message of your own: VOTE TO OPPOSE CASA, NO to an MTC/CASA Coup, Oakland says NO to MTC/CASA, Orinda says NO to CASA, Support your Constituency, OPPOSE CASA.

c. On Jan 17, pick up a speaker card and plan to say a few words about why you urge a vote to OPPOSE.

CASA TALKING POINTS

The CASA Compact is an unjust MTC/Big Business/Real Estate Investor Coup,

1. Designed by an MTC hand-picked, big-city, big-business, pro-growth Committee to House the Bay Area.

2. Intended to sway legislators to abandon their constituency and vote for bills like SB-50 that use tactics of hostile take-over to transfer planning rights, responsibility, and accountability into the hands of unelected regional and state bureaucracies.

3. Blames cities for housing problems; forgetting that cities don't build housing, developers do.

4. Allows big business to avoid paying its fair share of infrastructure costs in exchange for the commercial space, and, in some counties, pay an exceptionally low business tax.

5. Sets the stage to strip-mine community wealth and assets, putting it into the hands of global real estate and investment interests who measure success with profits, not the welfare of people and communities.

6. Destroys existing affordable housing, displaces seniors and vulnerable low-income communities, gentrifies neighborhoods, and fails to meet the need for low-income housing.

7. Inflicts long-term financial burdens on cities and tax-payers for expenses to expand capacity for water, sewer, parks and schools, while commercial developers and big business reap walk-away profits.

8. Creates an unelected Regional Housing Enterprise with regional zoning control and taxing authority with an annual budget of $2.5B, of which $1.5B is supposed to come from property taxes and sales taxes—privatized regional government. How will communities make up for diverted revenue and still provide basic services, pay pensions, and stay afloat?

9. Reverses years of community-based planning in the hands of elected officials and local planning commissions that, while not perfect, have guided sustainable growth through the General Plan and Housing Element while protecting the environment with CEQA.

What’s your choice? Elected Local Control or Privatized Regional Government?

Let’s Declare January MTC Awareness Month!

The Bay Area’s MTC (Metropolitan Transportation Commission) looks really good on paper. It has an attractive website rich with information, it has the support of potent organizations such as SPUR and the Bay Area Council, and since its hostile takeover of ABAG (Association of Bay Area Governments) MTC holds the transportation and development purse strings.

Multibillion-dollar Transbay Center opened with much fanfare August 2018. Closed for structural failure six weeks after.

Multibillion-dollar Transbay Center opened with much fanfare August 2018. Closed for structural failure six weeks after.

However, look closer and the stress lines start coming into focus: persistent gridlock traffic, a transit/biking-for-all policy that seems to have no roots in reality, vanishing parking spaces, gentrification, obliteration of neighborhood character, questionable imposition of region-wide taxes, density appropriate only for neighborhoods boasting more dogs than kids. To be fair, the MTC can always point to state legislation enabling its actions. But legislation provides the skeleton plan, and the MTC gives the plan copious flesh. Also, while we can vote a legislator out of office if we do not like his/her plans, we are stuck with whatever MTC bureaucrats devise.

Where you detect challenges look for opportunities

The MTC has felt to Bay Area residents familiar with it as an entity set in stone, partly because of its nature as a bureaucracy, and partly because the federal government says we must have a Metropolitan Planning Organization (whether we like it or not). However, this New Year brings to those not happy with the MTC a couple of opportunities. Thus, let’s declare January 2019 MTC Awareness Month.

* Steve Heminger, MTC’s Executive Director is retiring on February 28, 2019, and MTC is looking for his replacement. Heminger is the principal architect of MTC’s growth, influence, and consolidation of power. As such, he receives emphatic accolades and criticisms.

“After more than 17 years at the helm, Steve stands among the giants of the transportation world," observed MTC Chair and Rohnert Park City Councilmember Jake Mackenzie, who announced Heminger's retirement at the Commission's regular July meeting. "By charting a steady course through often-turbulent waters, Steve has shaped a bigger, safer and sounder Bay Area transportation network in which his legacy will be found in items as small as a Clipper card or as big as the new Bay Bridge.” MTC News

Steve Heminger, the executive director of the Metropolitan Transportation Commission, announced Wednesday that he will end an 18-year reign by retiring early next year. It can’t come soon enough … The region’s freeways are gridlocked. Public transit systems are in disarray. Commute times continue to increase. Heminger touts his agency as “action-oriented and project-based,” but that has translated into piecemeal construction, pathetic planning and a lack of long-range vision. The agency merely hands out money for one politically popular project after another with little sense of where it will all lead. Mercury News Editorial

Of course, Heminger and his supporters could blame legislators and the voting public for not giving MTC money and power in sufficient quantities to solve gridlock and other Bay Area ills. And one could say that completion of the new Bay Bridge was indeed a colossal accomplishment. Unlike California’s High-Speed Rail project, the bridge is up and running after cost overruns of around $5.5 billion and a final price tag of $6.5 billion.

Bay Area residents might want to contact their representative on the MTC Board and express any concern they have regarding the next MTC Executive Director. A full roster of Commissioners and what cities and counties they represent is on the MTC website. Writing a few letters to the editor and opinion pieces would also help.

* MTC Commissioners’ Terms Expire February 2019. This event presents opportunity No. 2 for Bay Area residents.

Major changes to MTC will take either Herculean efforts on the part of residents aware of the agency’s shortcomings or a transformative order from a higher level of government (MTC functions as the Bay Area’s federally-mandated Metropolitan Planning Organization). However minor changes that tweak how the MTC operates are possible. How Commissioners are selected would be a start. So, here are some basics.

Enabling Legislation: Sections 66502-66504 of the California Government Code enables the establishment of the Metropolitan Transportation Commission, describes how the agency functions, and prescribes how its Commissioners are selected.

Voting members: Counties of San Francisco, Contra Costa and San Mateo get two members each. Counties of Alameda and Santa Clara get three members each. Counties of Marin, Napa, Solano and Sonoma get one member each. The Association of Bay Area Governments (ABAG) gets one member.

Non-Voting members: One representative each from the U.S. Department of Housing and Urban Development (HUD), the U.S. Department of Transportation, the San Francisco Bay Conservation and Development Commission, and the California State Transportation Agency.

Selection Method: Counties have selection committees. Names picked by selection committees are then approved by mayors and/or city councils.

Challenges: Bureaucracies are usually not noted for their transparency; but the opaqueness with which MTC handles the selection of its Commissioners is intensive. Such obscurity prevents Bay Area residents – the recipients of MTC’s mandates – from attempting to influence the agency’s direction.

Section 66504 of the California Government Code mentions selection of Commissioners, but is not clear on two crucial points: 1) Must a Commissioner be a public official to represent his/her city or county on the MTC board? Section 66504 does not say so; it merely says that if the Commissioner is a public official, he/she must vacate his/her seat as Commissioner upon leaving public office. 2) There is no requirement that the selection process be transparent or that Bay Area residents be advised when and how selection is to take place.

Section 66504 - Each commissioner’s term of office is four years; provided, however, that the commissioners appointed by the Mayor of the City of Oakland and the Mayor of the City of San Jose shall have an initial term of office ending in February 2015. A commissioner appointed as a public officer vacates his or her commission seat upon ceasing to hold such public office unless the appointing authority consents to completion of the term of office. Commissioners shall be selected for their special familiarity with the problems and issues in the field of transportation.

Upon much Googling we located a couple of current letters posted on the Solano County (an attachment to the county’s December 4, 2018 agenda) and on the City of Los Altos (an attachment to the City Council meeting of December 11, 2018) websites from MTC’s Secretary to the Commission addressed to the counties’ selection committee regarding the upcoming expiration of term of Commissioners. These form letters noted that “MTC Commission members may be elected or appointed officials or members of the general public.” We are betting that each Bay Area selection committee received one of these form letters, but to find them one would need to comb the Internet and then click though several layers of links!

Action Suggested: Transforming the nature of anything we don’t like requires effort. Given the considerable power of today’s MTC, change requires taking small bites at the agency’s structure. Concerted effort to communicate with elected officials who are in a position to appoint MTC Commissioners or to influence the selection of the next MTC Executive Director could be a start.

Effective efforts will entail Internet research, and if necessary even filing Freedom of Information Act requests to determine who in your city and/or county is in charge of appointing MTC Commissioners.

A Nine-County Coalition Participant’s View

Emails freely fly between participants of the loose coalition we call the Nine-County Coalition. This website quotes from such email exchanges when participants specifically allow it, sometimes with attribution and sometimes without. Here are the helpful views regarding MTC Commissioners of one of the transportation experts in the group.

While I think it is unlikely that anything we can do over the next several weeks will cause any change in the MTC Commissioner appointment/reappointment process, one thing we know for sure is, if we don’t try anything, nothing will change.

In the long run, the more issues we can raise, the more questions we can ask, the more questionable activities we can highlight, the more that people will begin to see the problems and the failures with the crazy process we are stuck with and living through, and the more people we can make aware, the greater the chances that we can eventually start to make more progress in turning things around ...

The political reality is that being an MTC Commissioner is a very valuable political appointment that, generally, is much coveted by elected officials. In particular, the Commissioners control the priority of projects and, most important, the distribution of funds to projects, most of which range from hundreds of thousands to even billions. Even though the vast majority of the money that flows through MTC (and its component units, BATA, SAFE, BAHA, and BAIFA) is pass-throughs to other governmental agencies, they also directly control the approval of many contracts, totaling well into the millions each year.

The simple truth is, elected politico’s that have a role in such decisions tend to attract campaign contributions, as well as other “support,” from various interested parties.

Then, in the time-honored practice of elected officials “bringing home the bacon” – virtually all MTC Commissioners take this very seriously, spending a fair amount of time doing what they can to maximize funding coming to their home jurisdiction. Yes, I am very well aware that no one is elected to be a MTC Commissioners, but, trust me, elected politicos do not cease behaving like elected officials just because they are serving as an appointed member of a public governing board. In fact, if you are appointed to the MTC from a small county of city, your “value” as in influencer of MTC et al contracts and grants can be far more than that of being an elected part-time Mayor of a medium-sized Bay Area city.

Also, there is some money (not much) and travel involved. The MTC enabling statutes (GC66504.1) authorizes $100 per meeting, plus out-of-pocket expenses for up to five meetings per month. Also, as Commissioners, you can get expense-paid trips to Sacramento, DC, and various transit/land use/etc. conferences, which can include some international travel …

For all of these reasons, it is just not very realistic to expect that very many MTC Commissioners will ever be anything other than elected officials.

YIMBY 2019 Plan - Are We All Keynesians Yet?

Members of the Sunrise Movement campaigning for The Plan For a Green New Deal, proposed by U.S. Representative Alexandria Ocasio-Cortez and which CA Senator Scott Wiener supports.

Members of the Sunrise Movement campaigning for The Plan For a Green New Deal, proposed by U.S. Representative Alexandria Ocasio-Cortez and which CA Senator Scott Wiener supports.

The California housing crisis has generated unending dialogue, mostly emanating from the stack-and-pack side. The stack-and-pack rationale is clever, effective and persistent. Their strategies are meticulous. Legislation that overrides city and county laws continues to come down from Sacramento, and neighborhoods continue to change with or without residents’ say so.

However, housing costs have not decreased, nor has middle class exodus to more cost-friendly states abated – probably because one cannot fool Father Market just as one cannot fool Mother Nature. So, as is often the case with supporters of attempted solutions that do not work quite as purported, pro-unmitigated-development factions continue to up the ante.

One such faction is the increasingly visible and vocal YIMBY groups. The YIMBY strategy is radical and long-term. It uses a wide-variety of tools (legislative, legal, social, journalistic) to chip away at a perceived undesirable status quo, to achieve their vision of a desired housing outcome at some point in the undetermined future. As such, YIMBY strategy is worth noting.

A recent article in City Lab, “California’s Pro-Housing YIMBYs Are Making Their Move,” by City Lab writer Kriston Capps offers an excellent picture of YIMBY rationale and strategy. Here is a summary of the article, together with our clarifying notations.

Rationale

YIMBY rationale can be paraphrased or interpreted as a way to grow the movement by gaining sufficient support from lower-income residents to overcome the objections of higher-income residents who will pay the freight of subsidized housing or transit they don’t ever intend to use.

There’s no better example of the tyranny of the ballot measure than Article 34 ... It’s a powerful weapon for communities that want to keep low-income families out—a legal path to de facto segregation along race and class lines.

The words “tyranny of the ballot measure” constitute a contradiction in terms, but have enough gravitas to overcome that problem. Article 34 of the California Constitution is the result of the successful passage in 1950 of Proposition 10, an initiative which stated that before any State or Federal “low-rent housing project” (i.e., taxpayer subsidized) could be built, a majority of qualified voters of the city, town or county in which the project would be built needed to approve it at a special or general election. For example, if residents did not wish their property and other taxes raised, they could vote “no.”

California Strategy

YIMBY strategy aims to build support to change the state constitution in order to remove all roadblocks to housing growth and push for “structural solutions to California’s affordable housing crisis.” These are the principal targets according to the City Lab article.

* Article 34 of the California Constitution, mentioned above: State Senators Ben Allen and Scott Wiener introduced on December 3, 2018, a proposal to repeal Article 34. In a press release posted on Senator Scott Wiener’s website, Senator Allen says,

Voters have made their priorities clear. California must address its housing, affordability, and homelessness crises. And yet we have a decades old law that creates an unnecessary roadblock for cities who are trying to do right by their constituents. It’s time to repeal Article 34 and let cities do what they are intended to do; ensuring that there are safe, livable spaces for all.

It is not entirely clear how “voters have made their priorities clear” that California must address its housing, affordability, and homeless crisis via subsidies and density. High-profile legislation supporting stack and pack such as SB 35, SB 1, and SB 828 emanated out of Sacramento, not the ballot box. However, yes, voters did approve several bond measures intended to fund housing development.

* Article XIII of the California Constitution (Proposition 13): On December 3, 2018, California Assembly Member Cecilia Aguiar-Curry introduced Assembly Constitutional Amendment 1, a resolution to propose amendments to Article XIII. This proposal calls for,

… an additional exception to the 1% limit that would authorize a city, county, or city and county to levy an ad valorem tax to service bonded indebtedness incurred to fund the construction, reconstruction, rehabilitation, or replacement of public infrastructure or affordable housing, if the proposition proposing that tax is approved by 55% of the voters of the city, county, or city and county, as applicable, and the proposition includes specified accountability requirements.

The other exception already imposed on Proposition 13 is the funding of school districts. ACA 1 adds funding of public infrastructure or affordable housing. It also lowers the threshold by which projects involving public infrastructure or affordable housing can pass.

Please note that the proposal specifically mentions not only affordable housing but also “public infrastructure.” For purposes of clarification, here are definitions stated on the proposal:

Affordable housing:

... shall include housing developments, or portions of housing developments, that provide workforce housing affordable to households earning up to 150 percent of countywide median income, and housing developments, or portions of housing developments, that provide housing affordable to lower, low-, or very low income households, as those terms are defined in state law.

Public infrastructure:

... shall include, but is not limited to, projects that provide any of the following,” water or protect water quality, sanitary sewer, treatment of wastewater or reduction of pollution from stormwater runoff, protection of property from impacts of sea level rise, parks, open space and recreation facilities, improvements to transit and streets and highways, flood control, broadband Internet access service expansion in underserved areas, local hospital construction.

Homeowners need to understand that under this proposal, they will be financing with property taxes levied on their property pretty much of an open-ended agenda, with every piece of the agenda approved by a lower percentage of voters. The City Lab article summarized here and Scott Wiener’s website mentioned here do not make that clear.

* California’s Voter Initiatives: “… rule-by-ballot-measure doesn’t seem to be an item on anyone’s agenda. It should be.” Note the previous quote above regarding Article 34, in which voter initiatives are called “tyranny of the ballot measure.”

Beyond California Strategy

The City Lab article summarized here notes YIMBY solidarity with one U.S. Congress proposal and distaste for two items in the U.S. Constitution:

* Plan For a Green New Deal: U.S. Representative Alexandria Ocasio-Cortez is campaigning for the formation of a Congressional Select Committee to draw a climate change plan that would end U.S. use of fossil fuels.

The select committee shall have authority to develop a detailed national, industrial, economic mobilization plan (hereinafter in this section referred to as the “Plan for a Green New Deal” or the “Plan”) for the transition of the United States economy to become greenhouse gas emissions neutral and to significantly draw down greenhouse gases from the atmosphere and oceans and to promote economic and environmental justice and equality.

California Senator Scott Wiener Tweeted on December 5th,

I’m all for the #GreenNewDeal but w/o zoning reform - ie, allowing higher density housing at all income levels near jobs & transit - it’s an incomplete climate agenda. We won’t achieve carbon neutrality w/o changing land use patterns so ppl can drive less.

* The United States Senate and the Electoral College: Both the U.S. Senate and the Electoral College are part of the U.S. Constitution, and therefore out of the reach of reformers without a constitutional amendment. In YIMBY view, they are “structural issues.”

In a way, California’s push for structural solutions to California’s affordable housing crisis mirrors the national Democratic Party’s turn toward process issues to safeguard the nation’s democracy … Certain structural issues—like the permanent advantage that Republicans enjoy in the U.S. Senate or the anti-democratic nature of the Electoral College—are beyond the reach of reformers.

We note that our nation is not a democracy but a republic, precisely so that all states – populous or not — and all residents in those states would have a say. Since at present the populous states happen to be progressive in their view of private property, taxation, public subsidies, and climate policy, obviously progressive groups such as YIMBYs are not happy campers in their need to abide by a national Constitution republican (small “r”) in nature.

Are We all Keynesians Yet?

As we have noted on numerous occasions on this website, creation of abundant housing within limited spaces (within Priority Development Areas and along transit corridors) and in proximity to concentrated job-rich areas (Silicon Valley, San Francisco’s financial district) creates more challenges than it solves.

One obvious challenge is that such strategy does not bring housing prices down within a time frame believers would like to see. Residents today do not want to see changes in 10 or 20 years; they want to see changes that will be useful to them now. Prices for those chosen by central planning as deserving come down in the here and now only through heavy subsidies.

Thus, the extreme need felt by pro-development groups to eliminate roadblocks to tax increases. Taxes are necessary to finance publicly-funded housing, taxes from some are necessary in order to provide incentive tax abatement to others, and taxes are necessary for infrastructure that supports housing development.

High taxes and heavy subsidies make pro-development strategy fall in the Keynesian demand side of the economic spectrum, in spite of all the talk about housing supply decreasing costs. An alternative is application of real supply-side remedies, which require a free market with free choices as to where and how much to build, and residents willing to allow responsible job creators in their neighborhood.

As long as there are disadvantaged people who can’t access housing themselves, there will need to be both demand-side and supply-side solutions. But for the broader affordable housing debate, the emphasis should be much more on the latter. San Francisco is a case study city where every last demand-side strategy—rent control, inclusionary zoning, public housing, an affordability trust fund—has been tried. It remains unaffordable because it hasn’t combined these solutions with a valid agenda to have supply keep pace with population growth … And that gets to the heart of the answer: even the most dogged demand-side analysts must agree that if more supply, and a broader climate of deregulation, does not exist, it will diminish the effectiveness even of their pet programs. Ones like Section 8, LIHTC and Inclusionary Zoning will become inflicted with red tape, higher costs, and less ways to be used. The loser in that situation will be the person trying to pay their rent. “Does America’s Housing Crisis Need Supply-Side Or Demand-Side Solutions?”  The Market Urbanism Report, October 11, 2018.

BARC-ing Up The Wrong Tree

By Polly Baker

What if your government set up and operated a regional system of agencies with the goal of eliminating your legal political power and jurisdictions while it took control of your life? If this sounds crazy, I assure you it is not. Check it out for yourself: https://barc.ca.gov/

The Bay Area Regional Collaborative (BARC) works on climate change, sea level rise, and the many other existential crises facing the human race. They don't really have the data, and one wonders if they have ever verified the true facts. Whatever you think of climate change, these crises require that you give up your money, property, privacy, freedom and country as you submit to a Soviet style patronage system of unaccountable appointed people and their five-year plans of the collective. It is the Soviet system of central planning. Does climate change really require this level of control over us?

In this scenario planning replaces law, decision makers replace elected representatives, public comment replaces voting, participatory democracy replaces the constitutional republic, and statistical regions replace sovereign jurisdictions (cities, counties, states, and nations). You can have your say on any issue; it just won't matter. Regional agencies can continue to expand control over your life without interruption.

Associated with BARC is AB32 California Global Warming Solutions Act of 2006, and SB375 Sustainable Communities Strategy, adopted in 2008. These bills are the proud parents of Plan Bay Area, the five-year housing and transit plan component of sustainable development. Do we have problems? Yes. Is this top down regional inventory and control system the best way to address them? Uumm.. no...

If you haven't heard of the sustainable development model for a planned economy, which is the inventory and control of all natural, human and financial resources -- better know as the three E's of environment, equity and economy -- then you are in for a big surprise.

Check out the California State government Fourth Climate Change Assessment website. The full report, published in August 2018, presents a climate agenda complete with our counties ignored and replaced by regions across our State.

Do you care if your legal political power is taken away from you? Do you care if agencies that control your life cannot be controlled? If so, tell your city council members or County Supervisors, State legislators, and the Governor to shut down this regional system and get rid of these unaccountable, unelected regional agency boards.

Tell them they are BARC-ing up the wrong tree.

CASA Compact - Where do Voters Fit In?

We Told You So

Is your kid’s playground in peril. See Compact #8 and decide.

Is your kid’s playground in peril. See Compact #8 and decide.

Way back in 2016, when Measure AA was on the ballot of all Bay Area Counties, Nine-County Coalition participants forcefully expressed concern. Measure AA was regionalism’s advance into its next phase: normalizing region-wide tax proposals and other ballot measures that do not take into account the wishes of voters in individual cities and counties.

Now we have an exponentially bigger case of the Measure AA syndrome – MTC/ABAG’s Committee to House the Bay Area (CASA), and the CASA Compact: An Emergency Policy Package to Confront the Housing Crisis in the San Francisco Bay Area.

This title alone reveals CASA’s intent of implementing regional policy over city and county policy in the name of a crisis that CASA has declared an emergency. The compact further declares that the emergency will last 15 years.

How the Bay Area acquired its housing crisis has passed into a history not to be considered by the new deciders. We are told we now must focus on the narrative that for decades, the Bay Area failed to build “enough” housing. Now, we have a crisis, the crisis could be called an emergency, and all the provisions of CASA need to be enabled by state law.

On December 12, 2018, the 21-member steering group of CASA approved the CASA Compact, as expected.

Extremely Brief Summary of the CASA Compact

Here is a brief summary of the 10 provisions of CASA, called compacts. We will refrain from calling them commandments.

#1. Just Cause Eviction Policy: Specifies what is a just cause eviction, and provides for landlords to pay tenants evicted through no-fault of their own (e.g. Ellis Act) a relocation fee (amount not yet determined).

#2. Emergency Rent Cap: Establishes a Bay Area-wide emergency rent cap that limits annual increases in rent to a reasonable amount, and can be extended after the emergency period. (Note this is a Bay Area-wide mandate. Voters rejected repeal of Costa-Hawkins in the November 2018 election.)

#3. Emergency Rent Assistance and Access to Legal Counsel: Provides an amount capped at $5,000 to $10,000 per tenancy to individuals facing eviction that have an urgent, temporary “financial gap.” For low-income tenants facing eviction, provides access to free legal counsel. (Note that non-payment constitutes cause for justified eviction.)

#4. Remove Regulatory Barriers to Accessory Dwelling Units: Extends current Bay Area “best practices” regarding accessory dwelling units (Granny apartments, backyard house extensions) to every jurisdiction in the region. Amends existing state ADU law to remove regulatory barriers. Allows for multiple ADUs in multi-family homes.

#5. Minimum Zoning near Transit: Along high-quality bus service, residential uses up to 36 feet tall within ½ miles of bus stops. Along major transit stops, residential uses up to 55 feet (75 feet with density bonus) within ¼ mile radius of rail stations and ferry terminals. (Note this sound amazingly similar to SB 827.)

#6. Good Government Reforms to Housing Approval Process: Establishes standards for the entitlement and permitting of zoning-compliant residential projects. Requires transparency and consistency in how residential impact fees are set and enforced.

#7. Expedited Approval and Financial Incentives for Select Housing: Ensures timely approval of zoning-compliant housing projects. Creates financial incentives for developers to offset cost of providing income-restricted housing and of paying higher wages to construction workers. Incentives could include 15 years of property-tax increment abatement, density bonus up to 35%, reduced parking up 50%, relief from strict liability standards for ownership housing.

#8. Unlock Public Land for Affordable Housing: Requires response to issues of charter cities and creation of definitions of surplus and underutilized land. Requires all cities, counties, and state agencies to create a full inventory of publicly owned sites and report them to the California Department of Housing and Community Development. Requires HCD to enforce a revised State Surplus Land Act. (Note that the definition of “publicly owned land” could change to place land owned by cities and counties under the control of the state, as happened to the definition of charter cities.)

#9. Funding and Financing of CASA: Estimates the need to raise 1.5 billion in new revenue annually from taxes on vacant property, taxes on property owners, parcel taxes on residential and commercial property, commercial linkage fees, employer gross receipt taxes, employer head taxes, ¼ cent sales tax, and general obligation bonds.

#10. Regional Housing Enterprise: Establishes a regional agency through an act of legislation to seek voter approval to impose taxes for housing, collect new revenue, disburse the revenue, purchase, lease, and hold land.

Conclusion

The CASA Compact pushes up one more rung regional governance in which cities and counties have little or no say. Voters still do have a say when time comes to vote for or against the taxes necessitated by CASA. However, as we noted both in the case of Measure AA and in the case of Regional Measure 3, it has now become acceptable for tax proposals to pass based on the combined vote of all nine counties. So, expect an avalanche of taxes unless different approaches to housing are developed and successfully promoted.