August 5, 2005
Issue #31-2005
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MICHAEL GOLD NAMED EXECUTIVE DIRECTOR OF OC DIVISION
• PAT DANDO MOVES TO SAN JOSE CHAMBER OF COMMERCE
• IN MEMORIAM: TOM COOKE
TELECOMMUNICATIONS PRINCIPLES
Page 2
The Legislature is
in recess until
August 15. Taxpayers and local governments throughout the nation won a major
victory last week, as Congress adopted an energy bill that rejected language
that would have imposed a multi-billion dollar unfunded mandate on local
governments by preventing municipalities from suing the producers of the gas
additive, Methyl Tertiary Butyl Ether (MTBE), a major contaminate of drinking
water. For more, see Page 6.
LOCAL GOVERNMENTS DEFEAT MTBE ‘JAILBREAK’ IN
FEDERAL ENERGY BILL
FEDERAL BILLS SEEK TO LIMIT USE OF EMINENT DOMAIN
Members of Congress continued to introduce new bills impacting telecom-
munications, right up to the start of their recess on August 1. For more, see
Page 3.
TELECOM REFORM HEATS UP
BOARD APPROVES GUIDING PRINCIPLES
In response to the Supreme Court’s Kelo v. City of New London decision,
several measures have been introduced in Congress that would impact
California cities’ ability to complete important community revitalization
projects. If signed into law, they all would restrict the use of federal funds on
projects where eminent domain was used. For more, see Page 6.
Page 3Visit the League’s Official Website--www.cacities.org
PAGE 2/PRIORITY FOCUS
Michael Gold has been named executive
director of the League’s Orange County Division.
Michael previously served as the division’s deputy
director, and will continue to serve as the League’s
regional representative for the Orange County
division.
Gold replaces Janet Huston, who spent 10
years in the position before becoming as the
director of communications and governmental
affairs for the state’s Department of Housing and
Community Development.
The League congratulates Michael on his new
position, and looks forward to working with him in
his new role.
MICHAEL GOLD NAMED EXECUTIVE
DIRECTOR OF OC DIVISION
Tom Cooke, mayor of Fortuna and board
member of the League of California Cities, passed
away on Saturday, July 30, at the home of his
brother in Santa Cruz.
Mayor Cooke had been an active member of
the League for a number of years. In addition to
serving on the board of directors, he was also
Vice-Chair of the League’s Environmental Quality
policy committee. The League expresses its
heartfelt condolences to Mayor Cooke’s family,
friends and colleagues.
A memorial service for Mayor Cooke will be
held at 2 p.m. on Sunday, August 14, at the River
Lodge Conference Center, 1800 Riverwalk Drive,
Fortuna. The family is setting up a memorial fund
at Umpqua Bank, where donations can be made
in lieu of flowers.
IN MEMORIAM: TOM COOKE
Pat Dando, former Vice Mayor of San Jose and the
current Director of Local Government Affairs for Gov.
Schwarzenegger, announced this week that she has
accepted the position of President and CEO of the San
Jose Silicon Valley Chamber of Commerce.
Dando joined the governor’s staff in February of
this year, tasked with building and enhancing the
governor’s relationship with local governments. A
former League board member and member of several
National League of Cities committees, Dando brought
extensive experience with local issues and a deep
understanding of local officials’ concerns about protect-
ing their ability to provide quality local services.
“Pat has been an outstanding representative for
the governor,” said League President Pat Eklund,
councilmember in the city of Novato. “She under-
stands local issues, and she understands how to work
with local governmental organizations like the League.”
League Executive Director Chris McKenzie agreed.
“She’s done a terrific job of keeping us informed
about developments that could affect us, and creating
the opportunities for local concerns to be heard,” he
said.
He continued: “It’s been a pleasure to work with
such a solid professional. I know she’ll do an outstand-
ing job for the San Jose Chamber of Commerce. I’m
sure that the businesses and the cities in that area will
benefit from her knowledge and insight.”
PAT DANDO MOVES TO SAN JOSE
CHAMBER OF COMMERCE
2005 LEAGUE ANNUAL
CONFERENCE: OCTOBER 5-8,
MOSCONE CONVENTION CENTER,
SAN FRANCISCO
Plan now to attend the League’s 2005
Annual Conference this fall - the first time it
has been in San Francisco since 1997.
Make you reservations through our
online system at www.cacities.org/ac.PRIORITY FOCUS/PAGE 3 Visit the League’s Official Website--www.cacities.org
Bills regarding franchises, municipal utilities
and other issues have been introduced. None
have seen formal legislative action, and it is too
early to determine which of the many vehicles will
become major items of discussion. But each
touches upon an issue that is likely to be dis-
cussed once Congress begins in earnest with the
rewrite of the 1996 Telecommunications Act.
It is unclear at this point what form, if any,
telecommunications reform will take in California
this year. The Legislature remains on recess, and
meetings regarding telecommunications reform
have been halted until the Legislature returns the
week of August 15. Legislators then have only four
weeks to finish their work before recessing on
September 9.
In the meantime, the League’s board of direc-
tors unanimously approved a set of broad telecom-
munications principles during their July 29-30
meeting in Monterey. These principles broadly
outline the direction cities want to promote when
discussing potential changes in telecommunica-
tions regulations and laws. (See “Telecommunica-
tions Principles,” right.)
What You Can Do. The League remains an
active participant in discussions surrounding
telecommunications at the state and national
levels. It’s important for city officials to become
educated about this issue so you can respond
when we call upon you to advocate.
Get Smart About the Telecommunications
Issue. Review the principles following this story.
Get to know the details of your local franchises and
utility user taxes — the process, the revenues,
what these revenues support. Be prepared to let
your representatives know how changes in this
area could impact your citizens and the services
you provide. We’ll need your help as legislation
evolves and our representatives are asked to take
positions on issues of great concern to our cities.
Complete the League’s Telecommunica-
tions Survey. Your city will also soon receive a
Telecommunications Survey from the League.
Please be sure to give it your immediate attention,
and fill it out and return it to us. The information
we collect will allow the League to better under-
stand and communicate to policy makers about
the impacts to local services if franchise fees and
Utility User Taxes (UUT’s) are threatened.
TELECOM from page 1
TELECOMMUNICATIONS PRINCIPLES
(ADOPTED BY THE LEAGUE BOARD OF
DIRECTORS, JULY 30, 2005)
Introduction
Over the next five years, the transforma-
tion of telecommunications policy at the
federal, state and local level will have a
profound effect on the delivery of public
services, the quality of life and the economic
development of local communities in Califor-
nia. It is critical that the League of California
Cities take a leadership role in the public
debate over communications policy and that
the League makes every effort to encourage
local city officials to lead in the development
of communications policies in their local
communities. To establish a framework to
accomplish these goals, the League sets
forth the following base principles to begin
this effort and debate:
• As landlords of the public right-of-way
in our local communities, the League sup-
ports measures that recognize, strengthen
and protect local control over the taxpayer’s
public right-of-way.
• Access to the public right-of-way by
all companies providing communications
should first require the acquisition of a fran-
chise agreement from the appropriate public
agency. The franchise agreement gives a
regulatory uniformity for all competing com-
panies.
(more...)
Continued on Page 4Visit the League’s Official Website--www.cacities.org
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• Any communications company obtaining a franchise should pay the appropriate franchise
fee to protect and maintain the taxpayer’s interest in the public right-of-way.
• Any company providing communications services to a local community should also be
required to provide or support Public, Educational, and Governmental (PEG) access to new net-
works including PEG equipment, funding and support.
• Local communities should provide an equitable regulatory and taxation framework for all
companies seeking to provide communications services to a community.
• The authority to generate revenues to provide for the public interest is vital to state and local
governments and should be preserved. Reform should allow for solutions that preserve state and
local revenue.
1) Competing communication services that are either equivalent or viewed as viable substi-
tutes by consumers (hereinafter “functionally equivalent services”|1010|) should be treated on a
non-discriminatory basis for taxes or special purpose fees, rent and costs, if any by state
and local governments regardless of technologies used to deliver them.
• Technology Neutral: Regardless of method of delivery, transactional taxes and
fees will be assessed equally.
2) A time of transition should be incorporated for all parties to adjust to any agreed-upon
communications tax reform.
3) State and local revenues on communications services should reflect major recent changes
in this industry, which is rapidly evolving.
• General communications taxes such as UUT would be applied to communications provid-
ers across the board, including but not limited to providers of cable, video services, wireless,
wireline (phone line), satellite or any other platform.
4) State and local communications policy should allow for consumer selection of service
providers and technology.
5) State and local taxation should not advantage one communications service provider over an
other provider of a functionally equivalent service.
6) Reforms should strive to simplify the collection, reporting and auditing of state and local
taxes on communications services.
7) Tax obligation should not be based on the provider’s presence in a taxing jurisdiction.|1010|(more...)|1010| Define functionally equivalent services.|1010| This principle addresses the nexus problem created by Bellas Hess and Quill Supreme Court decisions. These decisions
prohibit state and local governments from requiring out-of-state merchants to collect their taxes.
TELECOMMUNICATIONS PRINCIPLES from page 3
Continued on Page 5Visit the League’s Official Website--www.cacities.org PRIORITY FOCUS/PAGE 5
• State and local role in preserving public interest obligations must be respected by the
industry. All parties should embrace the goal of meeting public interest obligations with special
purpose fees.
8) Special purpose obligations and surcharges, including but not limited to universal service,
public, education and government access (PEG) and 911 surcharge and 911 access fees,
should be applied on a nondiscriminatory basis between providers of functionally equivalent
services.
9) Any company providing video services to a local community should also be required to
provideor support public, education and government (PEG) access to new networks
including PEG equipment, funding and support.
10) Local communities should provide an equitable regulatory framework for all companies
seeking to provide telecommunications services to a community.
• Industry must respect the rights of local governments to act in the best interests of their
citizens as the owners/trustees of the local rights-of-way. As landlords of the public rights-of-way,
the League supports measures that recognize and strengthen local control over the public rights-
of-way. Local governments must retain the right to manage their rights-of-way and to receive
compensation/rental fees for use of the rights-of-way by any communications providers.
11) Rental payment for the use and occupancy of the public rights-of-way should be applied on
a competitively neutral and nondiscriminatory basis among providers of communications
services that use the public rights-of-way.
12) Access to the public right-of-way by all companies providing communications services
should first require the acquisition of a franchise agreement from the appropriate public
agency.
13) Any communications company obtaining a franchise should pay the appropriate franchise
fee for the privilege granted by the public entity.
14) Costs incurred by state and local governments associated with communications compa-
nies’ provision of services should be borne by that company.
15) The rights of local government to provide telecommunication and other communication
services to their citizens should be respected. These rights should not be impaired by
legislation or regulation that restricts such rights.
16) The League will oppose any legislation or regulation that would adversely affect the right of
local government to provide telecommunication or communication services that the local
government determines is in the best interest of the local community.
TELECOMMUNICATIONS PRINCIPLES from page 4Visit the League’s Official Website -- www.cacities.org
PAGE 6/PRIORITY FOCUS
The League joined with the National League of
Cities (NLC) and other municipal leagues in suc-
cessfully lobbying for new language that preserves
the ability of cities to bring their legal suits in state
court while permitting MTBE producers to request
that their cases be heard in federal court.
“NLC and its coalition partners applaud the
efforts of a bipartisan group of House and Senate
leaders who rejected this onerous proposal,” said
NLC President Anthony A. Williams, mayor of
Washington, D.C. “Cities will continue to have the
ability to recoup the clean-up costs directly from the
polluters.”
Nationwide cleanup costs for drinking water
sources polluted by MTBE is estimated in the range
of $25 to $85 billion. During the past two years,
NLC opposed numerous efforts by the House to
limit the liability of MTBE producers — efforts that
would have ultimately passed along billions of
dollars in cleanup costs to the taxpayers. MTBE
has been known to contaminate large quantities of
surface and ground water through leaking under-
ground storage tanks and pipelines to ground and
surface water. More than 28 states have detected
MTBE contamination in their water supply with the
most extensive contaminations found in California,
New England and the Mid-Atlantic states.
In April, the House of Representatives included
the MTBE provision in its version of the energy bill
over the objections of local governments, water
utilities and the Senate, which had twice rejected
the language under the threat of filibuster. Most
recently, NLC and coalition partners worked to
defeat a deal brokered between House Energy and
Commerce Chairman Joe Barton (R-Texas) and
Rep. Charles Bass (R-NH) that would have invali-
dated any MTBE-related lawsuit filed by localities
since September 5, 2003, with the exception of
Bass’ home state of New Hampshire, which would
have retained the right to sue. The Barton-Bass
deal would have also preempted the ability of states
to ban MTBE, forced all claims into federal court,
and placed a financial cap on the amount that cities
and water utilities could collect from the MTBE
producers.
“The earlier House MTBE-liability waiver
protecting MTBE producers would have been the
‘mother of all unfunded mandates’,” said NLC
Executive Director Donald J. Borut. “We would
have seen a billion-dollar bailout for many of the
same oil and gas industry suppliers who are now
seeing record profits.”
MTBE came under common use following
the adoption of the Clean Air Act Amendments in
1990. Court suits brought by states and localities
against MTBE manufacturers have already
resulted in settlements of more than $320 million
in California and Texas, and more than 100 other
cases are outstanding. In one of those lawsuits,
documents produced in the trial proved that
MTBE producers have known since the late
1980s that MTBE contaminated the water supply
and knew it was enormously expensive to clean
up.
MTBE from page 1
EMINENT DOMAIN from page 1
While many California agencies use eminent
domain rarely, if at all, this last-resort tool is
sometimes needed to revitalize communities,
eliminate blight, provide safe, affordable housing
and clean up environmental pollution. In addition,
federal funds such as Community Development
Block Grants (CDBG) often make up part of the
financing package for redevelopment projects.
The congressional measures are summa-
rized below as well as steps city officials can
take to help educate their congressional repre-
sentatives about this issue.
Summary of Bills
H.R. 3058 (the Senate Appropriations Bill)
left the Senate Appropriations Committee without
an amendment that would have prevented the
use of federal funds in economic development
projects in which eminent domain was used.
California Senator Dianne Feinstein and Louisi-
ana Senator Mary Landrieu were able to get
action on this amendment deferred until the bill
goes to the Senate Floor for debate and a vote.
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Status: The full Senate is expected to consider
H.R. 3058 and any amendments, including this
potentially harmful one, in the Fall.
H.R. 3135, the Private Property Rights Act
of 2005 (Rep. F. James Sensenbrenner, R-WI),
prohibits states from receiving federal funds (none
specified, leading to the conclusion that it could be
any and all federal funds) for public sector eco-
nomic development projects if eminent domain is
exercised. Ten California Representatives are co-
sponsors: Mary Bono, Ken Calvert, John Doolittle,
Bob Filner, Elton Gallegly, Wally Herger, Darrell
Issa, Daniel Lungren, Richard Pombo, George
Radanovich, and Maxine Waters. Status: As-
signed to House Judiciary Committee, no hearing
date set.
H.R. 3268 (Rep. Gingrey, R-GA ) excludes
compensation for property taken by eminent
domain from a property owner’s gross income for
tax purposes. Status: Referred to the House
Committee on Ways and Means.
H.R. 3315 (Rep. Waters, D-CA) specifically
bars CDBG funds to any state or community that
does not prohibit the use of eminent domain for
economic development. Status: Referred to the
House Committee on Financial Services.
H.R. 3405 (Rep. Bonilla, R-TX) prohibits
“economic development assistance” and defines
that to include programs under 10 federal agen-
cies and commissions including HUD, HHS,
Commerce and Treasury. Status: Referred to
House Education and the Workforce.
S. 1313, the Protection of Homes, Small
Businesses and Private Property Act of 2005,
(Sen. John Cornyn, R-TX) attempts to do the
same thing as H.R. 3135 – again, without specify-
ing the federal funds affected, leading to the
conclusion that it could apply to all federal funds.
California Senator Barbara Boxer has signed on
as a co-sponsor. Status: Assigned to Senate
Judiciary Committee, no hearing date set.
What You Can Do
California’s U.S. Congressional Delegation is back
in California for the summer recess that began
August 2 and needs to hear from local govern-
ment officials on how these measures will have
real life consequences here in their state if they
become law. We recommend you set up a meet-
ing with your congressional members during this
time and stress the following points:
• California is not Connecticut. We have
strong laws already on the books in California that
limit the use of eminent domain by redevelopment
agencies as a last resort and in instances where
there are findings of blight. Our laws already
provide property owners ample due process
protections. Yet, these measures will impose a
one-size-fits-all national approach that will harm
California.
• Eminent Domain is a rarely used - but
important - authority that allows communities to
condemn rundown properties to convert to safe,
affordable housing, to takeover and clean up
environmentally toxic areas, and to transform
impoverished, economically depressed neighbor-
hoods and provide jobs, businesses, housing and
economic growth.
• Restricting federal funds will only hurt our
efforts here in California to build affordable hous-
ing, remove blight, create jobs, and revitalize the
most downtrodden neighborhoods in need of help.
• Be prepared to tell the story of why emi-
nent domain was a necessary last resort in your
community. Describe the condition of the property
before redevelopment. Be specific with the num-
ber of code violations, health and safety violations,
crime statistics, pollution levels, etc. Also prepare
a list of all the steps you took to work with the
property owner and describe how you tried to get
them to fix the problems before eminent domain.
Describe how the area is better today because of
redevelopment.
EMINENT DOMAIN from page 6