May 19, 2006
Issue #20-2006
WANT MORE DETAILS
ON BILLS?
Visit the League of
California Cities
website at
www.cacities.org/
billsearch.
PROP. 42 PAYBACK FUNDS: HOW SHOULD CITIES BUDGET? PROP. 42 PAYBACK FUNDS: HOW SHOULD CITIES BUDGET? PROP. 42 PAYBACK FUNDS: HOW SHOULD CITIES BUDGET? PROP. 42 PAYBACK FUNDS: HOW SHOULD CITIES BUDGET? PROP. 42 PAYBACK FUNDS: HOW SHOULD CITIES BUDGET?
FIND A BILL, LEGISLATORS, LEG COMMITTEE - OR ASK LEG STAFF FIND A BILL, LEGISLATORS, LEG COMMITTEE - OR ASK LEG STAFF FIND A BILL, LEGISLATORS, LEG COMMITTEE - OR ASK LEG STAFF FIND A BILL, LEGISLATORS, LEG COMMITTEE - OR ASK LEG STAFF FIND A BILL, LEGISLATORS, LEG COMMITTEE - OR ASK LEG STAFF
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More than 500 city officials gave Gov.
Arnold Schwarzenegger a standing ovation
this week in Sacramento, when he signed
SB 1689 (Núñez/Perata) – the housing
bond package passed two weeks ago as
part of an infrastructure funding package –
at the League of California Cities’ Legisla-
tive Action Days event on May 17.
For more, see Page 2.
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GOVERNOR SIGNS HOUSING BOND GOVERNOR SIGNS HOUSING BOND GOVERNOR SIGNS HOUSING BOND GOVERNOR SIGNS HOUSING BOND GOVERNOR SIGNS HOUSING BOND
AT LEAGUE OF CALIFORNIA CITIES AT LEAGUE OF CALIFORNIA CITIES AT LEAGUE OF CALIFORNIA CITIES AT LEAGUE OF CALIFORNIA CITIES AT LEAGUE OF CALIFORNIA CITIES
LEGISLATIVE ACTION DAYS LEGISLATIVE ACTION DAYS LEGISLATIVE ACTION DAYS LEGISLATIVE ACTION DAYS LEGISLATIVE ACTION DAYS
Representatives of the League of California Cities’ Latino, African-Ameri-
can and Asian-Pacific Islander Caucuses spoke on May 17 at the League’s
Legislative Action Days, urging the Legislature to work for new telecommuni-
cations rules that ensure that competition in telecommunications is fair to all
neighborhoods, regardless of income levels or ethnicity.
For more, see Page 5.
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LEAGUE ETHNIC DIVERSITY CAUCUSES LEAGUE ETHNIC DIVERSITY CAUCUSES LEAGUE ETHNIC DIVERSITY CAUCUSES LEAGUE ETHNIC DIVERSITY CAUCUSES LEAGUE ETHNIC DIVERSITY CAUCUSES
URGE ‘FAIR COMPETITION’ IN TELECOM REFORM URGE ‘FAIR COMPETITION’ IN TELECOM REFORM URGE ‘FAIR COMPETITION’ IN TELECOM REFORM URGE ‘FAIR COMPETITION’ IN TELECOM REFORM URGE ‘FAIR COMPETITION’ IN TELECOM REFORM
NEW TELECOM TOOL KIT AVAILABLE
The Senate Commerce, Science and Transportation Committee held a
May 18 hearing on federal telecommunications law reform draft legislation,
S.2686, the “Communications, Consumer’s Choice and Broadband Deploy-
ment Act of 2006,” recently introduced by Committee Chairman Ted Stevens
(R-Ark.). For more, see Page 4.
FEDERAL TELECOM UPDATE FEDERAL TELECOM UPDATE FEDERAL TELECOM UPDATE FEDERAL TELECOM UPDATE FEDERAL TELECOM UPDATE
From left to right: Senate Minority Leader Dick
Ackerman, Senate President Pro Tempore Don
Perata, Gov. Arnold Schwarzenegger and Assembly
Budget Chair John Laird.Visit the League’s Official Website--www.cacities.org PAGE 2 - PRIORITY FOCUS
May 19, 2006 - Issue #20
With last week’s release of the May Revise to
the budget, Gov. Schwarzenegger is continuing to
propose, as he did in January, that the FY 2006-07
budget include $920 million to pay back loans the
state took from Proposition 42 transportation
funding in FY 2003-04. This amount includes
$254 million for local streets and roads (half for
cities, half for counties), roughly the same level of
funding as in the current FY 2005-06 year.
Many city managers and finance officers are
wondering if they should build their city’s share of
the payback into their own city budget proposals.
The conservative answer is “no,” because at
this time, the proposal is simply that – a proposal.
Absent this repayment of previously suspended
Proposition 42 funds, the Transportation Conges-
tion Relief Program in current law (Revenue and
Taxation Code Sec. 7104(c)) would be provide no
Proposition 42 appropriation to cities or counties in
FY 2006-07 to FY 2007-08.
A clearer (and perhaps rosier) answer to this
question will be available in a few weeks, when the
Legislature has acted on the Governor’s pro-
posal.
Visit (and bookmark!) the League’s
Legislative Resources page
(www.cacities.org/legresources). You’ll find
a roster and contact information for the
League’s legislative staff; the online Bill
Search program, background materials on
lobbying your legislators, and more.
FIND A BILL, LEGISLATORS, LEG FIND A BILL, LEGISLATORS, LEG FIND A BILL, LEGISLATORS, LEG FIND A BILL, LEGISLATORS, LEG FIND A BILL, LEGISLATORS, LEG
COMMITTEE - OR ASK LEG STAFF COMMITTEE - OR ASK LEG STAFF COMMITTEE - OR ASK LEG STAFF COMMITTEE - OR ASK LEG STAFF COMMITTEE - OR ASK LEG STAFF
PROP. 42 PAYBACK FUNDS: HOW PROP. 42 PAYBACK FUNDS: HOW PROP. 42 PAYBACK FUNDS: HOW PROP. 42 PAYBACK FUNDS: HOW PROP. 42 PAYBACK FUNDS: HOW
SHOULD CITIES BUDGET? SHOULD CITIES BUDGET? SHOULD CITIES BUDGET? SHOULD CITIES BUDGET? SHOULD CITIES BUDGET?
The Governor hailed the bond as a great
success, and a shining example of what the
Legislature can accomplish when working to-
gether. It will appear on the November statewide
ballot as Proposition 1C.
“The bond package was passed not because
of me, but all of you,” the Governor told the packed
ballroom of local government officials, including
members of the League’s board of directors.
“There was no ‘Republican way,’ no ‘Democrat
way,’ we did it the California way. This was a huge
victory for California.”
The League’s Legislative Action Days is an
annual event, where city officials come to the
State Capitol to lobby their legislators on League
priority issues. This year’s program featured a
variety of speakers from the League, State Legis-
lature, and state agencies.
Governor, Legislators Receive League
Awards
Following the Governor’s speech, League First
Vice President Maria Alegria, Mayor Pro Tem in the
city of Pinole, presented the Governor with a
commemorative shovel as an award recognizing
his work on the bi-partisan infrastructure invest-
ment package. Also on hand to receive the
awards were Senate President Pro Tempore Don
Perata, Sen. Dick Ackerman, Sen. Bob Dutton,
Sen. Alan Lowenthal and Sen. Tom Torlakson.
The commemorative shovels were intended to
signify the infrastructure work that will be under-
taken if the housing and other infrastructure bonds
are passed by voters in November. Also honored,
but not present to accept the awards, are Assem-
bly Speaker Fabian Núñez and Assembly Minority
Leader George Plescia.
Telecommunications Discussed by Levine,
Diversity Caucus Members
The Governor’s remarks came at the end of a
program that also included a discussion of tele-
communications reform.
LEG ACTION DAYS LEG ACTION DAYS LEG ACTION DAYS LEG ACTION DAYS LEG ACTION DAYS from page 1 from page 1 from page 1 from page 1 from page 1
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Continued on Page 3PRIORITY FOCUS - PAGE 3 Visit the League’s Official Website--www.cacities.org
May 19, 2006 - Issue #20
Assemblymember Lloyd Levine, chair of the
Assembly Utilities and Commerce Committee,
spoke about AB 2987, a telecommunications
reform measure opposed by the League that
Levine is co-sponsoring with Assembly Speaker
Fabian Núñez. Levine remained after his address
to hear concerns expressed by members of the
League’s ethnic diversity caucuses about the bill’s
lack of stringent protections against red-lining.
“Here’s what it comes down to,” said Los
Angeles councilmember Tony Cardenas, a mem-
ber of the League’s Latino Caucus. “We support
competition, but only if it leads to fairness – better
access to video and broadband services for all
neighborhoods and all businesses.”
Levine stressed that both he and the Speaker
are working together with local officials to address
their concerns.
Other speakers at the event included Senate
President Pro Tempore Don Perata, who spoke
about the infrastructure package, and Assembly
Budget Chair John Laird, who talked about the May
Revise to the budget.
State Transportation, Housing Officials
Discuss Bonds
Legislative Action Days continued on May 18,
with League President and Los Angeles
councilmember Alex Padilla opened the session.
Commenting on the success of the previous day’s
meetings, Padilla stressed that the League would
continue to succeed legislatively if members kept
working together. He emphasized that there was
much work yet to be done.
“We have many challenges on the horizon,” the
League President said. “While the state infrastruc-
ture package is a great start, we know we will need
more tools at the local level to fund local services
and infrastructure. We also need to continue to
work to ensure that our communities get a fair deal
on telecom reform and … establish a permanent
source of funding for affordable housing.”
“It is our unity that has made us strong, and
our unity will make us stronger,” Padilla con-
cluded.
Padilla then introduced Terry Abbott, division
chief, Local Assistance, of the California Depart-
ment of Transportation. Abbott gave an overview
of the infrastructure bond package, detailing how
funds would be allotted, if the infrastructure bond
package is passed by voters in November.
Lynn Jacobs, director of the California Depart-
ment of Housing and Community Development
(HCD), next addressed the group. She stressed
that her goal for the department is to work to-
gether with local officials to build more housing.
“This is my one-month anniversary [since
assuming the position of HCD Director], and I
want you to know my goal is to help you produce
more housing, not to get in the way of you doing
so,” Jacobs explained.
The new HCD Director also commented on
some of the new affording housing programs that
would be established if the infrastructure bond
package is passed by voters. She said that her
intent is to work with the League and other orga-
nizations to establish stakeholder groups that will
consult with the department on how best to
prioritize projects that can be funded by the new
bond.
“We want to be able to tell the Legislature
what works in the field and work with you to find
out where the money is best spent,” Jacobs said.
“My main reason in being here today is to ask for
your support as we work to build more housing.
We have to make sure the people of California
are safely and adequately housed.”
The session closed with a briefing by League
Deputy Director Dwight Stenbakken on the status
of AB 2987 negotiations with the authors and their
staff.
LEG ACTION DAYS LEG ACTION DAYS LEG ACTION DAYS LEG ACTION DAYS LEG ACTION DAYS from page 2 from page 2 from page 2 from page 2 from page 2 ?????????????????? ?????????????????????Visit the League’s Official Website--www.cacities.org PAGE 4 - PRIORITY FOCUS
May 19, 2006 - Issue #20
TELECOM TELECOM TELECOM TELECOM TELECOM from page 1 from page 1 from page 1 from page 1 from page 1 ? ? ? ???????????????????????????????????????????
The hearing was the first of two scheduled hear-
ings leading up to a markup of the bill, which is
tentatively scheduled to take place next month.
The May 18 hearing focused primarily on the
legislation’s intent to increase competition in the
video service market to the benefit of consumers.
All senators present for the hearing voiced their
support for the measure’s goal of expediting the
entry of new providers into the market.
However, several senators also expressed
reservations with the bill’s proposed plan to
achieve this objective through the establishment of
a national franchise system that would shift control
of public rights of way to the Federal Communica-
tions Commission (FCC).
Chairman Stevens was sympathetic to these
concerns, and emphasized that the measure
before the committee was still merely a draft. He
committed to work with the national local govern-
ment groups who raised this and other concerns.
Boxer Support for Local Concerns
Sen. Barbara Boxer (Calif.) was particularly
vocal about the effect that the draft measure would
have on local governments, raising many of the
League’s major concerns with the bill, including
rights-of-way, build-out and anti-redlining.
Michael Guido, vice chairman of the U.S.
Conference of Mayors Transportation and Com-
munications Committee and mayor of Dearborn,
Michigan, offered testimony at the hearing on
behalf of local government. Mayor Guido did an
outstanding job of presenting local governments’
positions on rights-of-way and consumer protec-
tion, as well as the need to include build-out
provisions in any federal telecommunications law
reform legislation.
A copy of the mayor’s testimony is available at
www.cacities.org/telecom. You can also view the
full panel of witnesses on the committee’s website
at http://commerce.senate.gov. The committee will
post the prepared testimony of all participating
witnesses at this address within the next several
days.
Also available at www.cacities.org/telecom is
a copy of a letter that the National League of
Cities, the National Association of Counties, the
U.S. Conference of Mayors and the National
Association of Telecommunications Officers
issued to the committee’s chairman and ranking
member last week expressing their concerns with
the legislation.
While the committee had initially proposed a
second hearing to be held on S. 2686 on May 25,
followed by a markup of the bill on June 8, Chair-
man Stevens mentioned the need for a new
schedule to be developed in light of conflicting
schedules of committee members.
Don’t miss this opportunity to get the
League’s most useful reference tool.
This comprehensive California directory
provides important contact information
for mayors, council members and city
department heads. The directory also
features the League’s staff directory,
League partners, affiliate organizations
and a wide variety of advertisers.
INFORMATION YOU NEED, RIGHT
A T YOUR FINGERTIPS!
Purchase this publication online at
www.cacities.org/store or call (916) 658-
8257 for an order form. City officials
price $30, non-city officials price $65,
plus shipping & handling.
THE 2006 CITY HALL
DIRECTORY IS
NOW AVAILABLE!PRIORITY FOCUS - PAGE 5 Visit the League’s Official Website--www.cacities.org
May 19, 2006 - Issue #20
“California city officials support and welcome
competition among telecommunications provid-
ers,” said Maria Alegria, first vice president of the
League of California Cities and mayor pro tem of
the city of Pinole. “We know that it’s good for
consumers. It leads to lower prices and better
service.
“But competition must be fair for all Califor-
nians. We can only have fair competition and
equity if telecom providers are required to commit
to build-out schedules that will ensure that all
communities, regardless income levels, have
access to service within a reasonable timeframe.”
The League of California Cities is opposed to
AB 2987 (Núñez/Levine) in its current form, be-
cause it fails to specify build-out schedules for
new market entrants, or to guarantee that cities
will have the same rights to public access stations
and broadband services to schools and libraries
as can be negotiated under current cable televi-
sion franchising authority. The cities are also
concerned about enforcement of consumer
protection provisions, maintaining revenues that
are vital to providing essential services, and
preserving local control over local rights-of-way.
The comments by the diversity caucus mem-
bers followed a presentation on AB 2987 by its co-
author, Assemblymember Lloyd Levine.
In additional to Alegria, diversity caucus speak-
ers included E. Timothy Parker, mayor pro tem of
Newman and president of the African-American
Caucus; Steve Cho, vice president of the
League’s Asian-Pacific Islander Caucus and a
council member in the city of Fremont; Ed Balico,
vice mayor in the city of Hercules, and a member
of the League’s Asian-Pacific Islander Caucus;
and Tony Cardenas, council member, Los Ange-
les, a member of the Latino Caucus. The speak-
ers raised concerns about the lack of specific build
out provisions in the measure, enforcement of
consumer protection standards, continued support
for public access or “PEG” (“public, education,
government”) stations, and service to libraries and
schools.
Cardenas was adamant that city officials were
open to reform, but only if the competition result-
ing from that reform is fair to all Californians.
“We support competition, but only if it leads to
fairness – better access to video and broadband
services for all neighborhoods and all businesses,
large and small,” Cardenas explained. “Assembly
Speaker Nunez and Assemblymember Levine …
understand our concerns. We are hopeful that
we will soon see amendments that address our
issues.”
New Telecom Advocacy Tool Kit
The League also rolled out new telecommuni-
cations advocacy materials this week, as part of
an intensified effort the League will undertake in
the weeks ahead to build grassroots coalitions
and undertake media outreach regarding state
and federal telecommunications reform mea-
sures.
The “Telecom Action Kit” was presented to city
officials at the League’s Legislative Action Days,
and is available for download at www.cacities.org/
telecom. The kit includes background materials
on AB 2987 (Núñez /Levine), direction regarding
coalition building and media outreach, and urges
city officials to contact their League regional
representatives to coordinate grassroots activi-
ties.
Also included are a sample resolution for
adoption by a city or other local agency, a sample
oped and sample letter to the editor.
Additional tool kit materials will be added in the
weeks ahead, as the League continues its em-
phasis on educating the media and legislators
about local concerns with AB 2987.
CAUCUSES CAUCUSES CAUCUSES CAUCUSES CAUCUSES from page 1 from page 1 from page 1 from page 1 from page 1 ???????????????????????????????? ?????????????
May 26, 2006
Issue #21-2006
WANT MORE DETAILS
ON BILLS?
Visit the League of
California Cities
website at
www.cacities.org/
billsearch.
TELECOM IN THE NEWS TELECOM IN THE NEWS TELECOM IN THE NEWS TELECOM IN THE NEWS TELECOM IN THE NEWS
HIGHLIGHTS OF THE LEAGUE BOARD MEETING, MAY 18-19, SACRAMENTO HIGHLIGHTS OF THE LEAGUE BOARD MEETING, MAY 18-19, SACRAMENTO HIGHLIGHTS OF THE LEAGUE BOARD MEETING, MAY 18-19, SACRAMENTO HIGHLIGHTS OF THE LEAGUE BOARD MEETING, MAY 18-19, SACRAMENTO HIGHLIGHTS OF THE LEAGUE BOARD MEETING, MAY 18-19, SACRAMENTO
LEAGUE BOARD OF DIRECTORS ADOPTS A NEUTRAL POSITION ON LEAGUE BOARD OF DIRECTORS ADOPTS A NEUTRAL POSITION ON LEAGUE BOARD OF DIRECTORS ADOPTS A NEUTRAL POSITION ON LEAGUE BOARD OF DIRECTORS ADOPTS A NEUTRAL POSITION ON LEAGUE BOARD OF DIRECTORS ADOPTS A NEUTRAL POSITION ON
PROPOSITION 82 PROPOSITION 82 PROPOSITION 82 PROPOSITION 82 PROPOSITION 82
LEGISLATURE AWASH IN FLOOD BILLS LEGISLATURE AWASH IN FLOOD BILLS LEGISLATURE AWASH IN FLOOD BILLS LEGISLATURE AWASH IN FLOOD BILLS LEGISLATURE AWASH IN FLOOD BILLS
ADDITIONAL DETAILS ON PROPOSITION 1B: THE TRANSPORTATION BOND ADDITIONAL DETAILS ON PROPOSITION 1B: THE TRANSPORTATION BOND ADDITIONAL DETAILS ON PROPOSITION 1B: THE TRANSPORTATION BOND ADDITIONAL DETAILS ON PROPOSITION 1B: THE TRANSPORTATION BOND ADDITIONAL DETAILS ON PROPOSITION 1B: THE TRANSPORTATION BOND
IRS TO STOP COLLECTING TELEPHONE TAX, REFUND $13 BILLION IRS TO STOP COLLECTING TELEPHONE TAX, REFUND $13 BILLION IRS TO STOP COLLECTING TELEPHONE TAX, REFUND $13 BILLION IRS TO STOP COLLECTING TELEPHONE TAX, REFUND $13 BILLION IRS TO STOP COLLECTING TELEPHONE TAX, REFUND $13 BILLION
FIND A BILL, LEGISLATORS, LEG COMMITTEE - OR ASK LEG STAFF FIND A BILL, LEGISLATORS, LEG COMMITTEE - OR ASK LEG STAFF FIND A BILL, LEGISLATORS, LEG COMMITTEE - OR ASK LEG STAFF FIND A BILL, LEGISLATORS, LEG COMMITTEE - OR ASK LEG STAFF FIND A BILL, LEGISLATORS, LEG COMMITTEE - OR ASK LEG STAFF
TELECOM UPDATE TELECOM UPDATE TELECOM UPDATE TELECOM UPDATE TELECOM UPDATE
WHAT ARE THE “SPILLOVER” FUNDS? WHAT ARE THE “SPILLOVER” FUNDS? WHAT ARE THE “SPILLOVER” FUNDS? WHAT ARE THE “SPILLOVER” FUNDS? WHAT ARE THE “SPILLOVER” FUNDS?
LEGISLATIVE BILL SUMMARIES LEGISLATIVE BILL SUMMARIES LEGISLATIVE BILL SUMMARIES LEGISLATIVE BILL SUMMARIES LEGISLATIVE BILL SUMMARIES
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The League of California Cities is encouraging cities to oppose SB 1177
(Hollingsworth) which will be heard in the Assembly Housing and Community
Development Committee on Wednesday, June 14. For more, see Page 13.
LEAGUE URGES CITIES TO OPPOSE LEAGUE URGES CITIES TO OPPOSE LEAGUE URGES CITIES TO OPPOSE LEAGUE URGES CITIES TO OPPOSE LEAGUE URGES CITIES TO OPPOSE
SB 1177 (HOLLINGSWORTH) SB 1177 (HOLLINGSWORTH) SB 1177 (HOLLINGSWORTH) SB 1177 (HOLLINGSWORTH) SB 1177 (HOLLINGSWORTH)
Proposition 42 Repayment
Differing actions in the Senate and Assembly budget subcommittees
mean that the joint legislative Budget Conference Committee will ultimately
decide how much the state will provide in FY 2006-07 to repay Proposition 42
transportation funds that were borrowed in FY 2004-05, and how those
repayment funds will be allocated. For more, see Page 8.
BUDGET UPDATE: SENATE AND ASSEMBLY SUBCOMMITTEES BUDGET UPDATE: SENATE AND ASSEMBLY SUBCOMMITTEES BUDGET UPDATE: SENATE AND ASSEMBLY SUBCOMMITTEES BUDGET UPDATE: SENATE AND ASSEMBLY SUBCOMMITTEES BUDGET UPDATE: SENATE AND ASSEMBLY SUBCOMMITTEES
MAKE RECOMMENDATIONS ON TRANSPORTATION FUNDING MAKE RECOMMENDATIONS ON TRANSPORTATION FUNDING MAKE RECOMMENDATIONS ON TRANSPORTATION FUNDING MAKE RECOMMENDATIONS ON TRANSPORTATION FUNDING MAKE RECOMMENDATIONS ON TRANSPORTATION FUNDING
AB 2987 (Núñez/Levine) passed out of the Assembly Appropriations
Committee on May 25 with amendments that fail to address the League’s
concerns with fairness, protection against red-lining, enforcement of con-
sumer standards, preservation of local public access stations, protection of
local rights-of-way, and other issues. For more, see Page 12.
AB 2987 AMENDED: LEAGUE STILL OPPOSED AB 2987 AMENDED: LEAGUE STILL OPPOSED AB 2987 AMENDED: LEAGUE STILL OPPOSED AB 2987 AMENDED: LEAGUE STILL OPPOSED AB 2987 AMENDED: LEAGUE STILL OPPOSED
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Page 13 Page 13 Page 13 Page 13 Page 13Visit the League’s Official Website--www.cacities.org PAGE 2 - PRIORITY FOCUS
May 26, 2006 - Issue #21
TELECOM IN THE NEWS TELECOM IN THE NEWS TELECOM IN THE NEWS TELECOM IN THE NEWS TELECOM IN THE NEWS
Consumer Groups Protest Risks of Telecom
Reform
A group called SaveAccess.org held protests
on May 24 outside buildings owned by AT&T Inc.,
Verizon, BellSouth Corp. and Qwest Communica-
tions International Inc. in Chicago, Boston, New
York and San Francisco.
The groups were protesting legislation pro-
posed in the House and Senate that would grant
telephone companies national video franchises.
They argued that a national-franchise law would
threaten funding for PEG-access (public, education
and government) channels.
To view the story, visit www.MultiChannel.com.
Look for the story titled, “Verizon Can Hear
Protesters Now”.
New AT&T Video Strategy Could Be In the
Works
Concerns that AT&T’s “Project Lightspeed”
fiber- to-the-node (FTTN) architecture may be
experiencing challenges and even if deployed
could be un-competitive is leading market re-
searchers to predict that AT&T will announce a new
video architecture with increased revenue potential
later this year.
To view the story, visit www.forbes.com and look
for the story titled “New AT&T Video Strategy
Could Be In The Works.”
Mayor of Albuquerque Calls Video Franchise
Legislation ‘Unwise Trade-Off’
Martin Chavez, mayor of Albuquerque, N.M.
recently addressed issues of video franchise
legislation reform in an op-ed.
In his remarks, Mayor Chavez labeled efforts for
video franchise legislation to be seeking to solve
competition problems that do not exist, calling the
repeal of current law a “very unwise trade-off.”
To read the article, visit www.news.com and
search for “Perspective: Hanging Up on the
Competition.”
S.C. Passes Statewide-Franchise Bill
South Carolina became the latest state to
approve a statewide video-franchising bill, but the
new law has provisions that may release incumbent
cable providers from their local agreements once a
new provider launches service in direct competition.
The bill, signed into law this week by Gov. Mark
Sanford, assigns franchise licensing to the secre-
tary of state.
To view the article, visit www.multichannel.com
and search for “S.C. Passes Statewide-Fran-
chise Bill.”
Pa. bill would allow competition in cable from
phone companies
A Pennsylvania state lawmaker plans to intro-
duce legislation within two weeks to establish a
statewide franchise for telephone companies to
introduce video services to compete with Comcast
and other cable television providers.
To read the article, visit www.poconorecord.com
and search for “Pa. bill would allow competition
in cable from phone companies.”
Telecos’ Push for Network Neutrality is Ironic
Change of Pace
A blog entry on network neutrality posted at
www.techdirt.com points out that while telecos are
claiming that their interest in network neutrality is
about “keeping regulatory hands off the Internet,”
the telecos have gained billions of dollars from
regulations in their favor over the years and are
more concerned with how regulation would impact
competition than a regulation-free Internet.
The piece further illustrates that if there was
true competition that allowed others to enter the
market, network neutrality would not be an issue,
as firms couldn’t break network neutrality without
receiving serious criticism.
To read the full article, visit www.techdirt.com
and search for “Funny, the Telecos Weren’t So
Against Regulations When it Helped Them.”PRIORITY FOCUS - PAGE 3 Visit the League’s Official Website--www.cacities.org
May 26, 2006 - Issue #21
League Celebrates Infrastructure Bonds
with State Leaders. The board of directors met
following the League’s Legislative Action Days at
which the Governor and bipartisan leadership of
the Legislature were recognized for collaborating
on a very favorable infrastructure bond package.
These measures will appear on the November
2006 ballot as Propositions 1A through 1E. They
include:
• Protection of Prop. 42 funding;
• Additional funding for transportation and
transit;
• Funding for affordable housing and infill
incentives;
• Funding for school construction; and
• Funding for levees and flood protection.
The board voted to support the infrastructure
bond package.
Telecommunications: Cities Welcome Fair
Competition. Building upon a policy framework
for telecommunications reform that the League
membership and board have developed over the
past several months, the board urged cities to
communicate their readiness to embrace new
telecommunications technology and applications
and to foster fair competition among all service
providers. The board urges cities to communicate
with the industry that the city is “open for business”
and eager to expedite local franchise approvals
that expand the delivery of video services to their
residents in a fair and competitive environment.
The board approved a sample letter which cities
can adapt and send to service providers.
League Annual Conference in San Diego,
September 6-9. This year’s annual conference
will return to San Diego after an absence of several
HIGHLIGHTS OF THE LEAGUE BOARD MEETING HIGHLIGHTS OF THE LEAGUE BOARD MEETING HIGHLIGHTS OF THE LEAGUE BOARD MEETING HIGHLIGHTS OF THE LEAGUE BOARD MEETING HIGHLIGHTS OF THE LEAGUE BOARD MEETING
MAY 18-19, SACRAMENTO MAY 18-19, SACRAMENTO MAY 18-19, SACRAMENTO MAY 18-19, SACRAMENTO MAY 18-19, SACRAMENTO
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The League of California is now neutral on
Proposition 82, the Preschool Education. Tax
on Incomes Over $400,000 for Individuals
$800,000 for Couples initiative, that will appear
on the June ballot.
The League’s position was adopted last week
by its board of directors. When voting to take the
neutral position, the board noted that the League
is involved with a number of vital public policy
issues, many of which will be before voters later
this year. The board concluded that Proposition
82 on preschool education does not represent a
compelling municipal interest.
If passed, Proposition 82 would establish a
constitutional entitlement to statewide voluntary
preschool services for all children one year prior
to entering kindergarten. It would be funded by
imposing an additional 1.7 percent tax rate on
individuals with taxable income over $400,000,
head of household filers with taxable income over
$544,457 and married couples with taxable
incomes over $800,000.
LEAGUE BOARD OF DIRECTORS LEAGUE BOARD OF DIRECTORS LEAGUE BOARD OF DIRECTORS LEAGUE BOARD OF DIRECTORS LEAGUE BOARD OF DIRECTORS
ADOPTS A NEUTRAL POSITION ADOPTS A NEUTRAL POSITION ADOPTS A NEUTRAL POSITION ADOPTS A NEUTRAL POSITION ADOPTS A NEUTRAL POSITION
ON PROPOSITION 82 ON PROPOSITION 82 ON PROPOSITION 82 ON PROPOSITION 82 ON PROPOSITION 82
Restore and protect local control for cities
through education and advocacy to
enhance the quality of life for all Californians.
Our Mission
years. The board has added a Leadership Gala as
a new special feature this year. Future annual
conferences will be hosted by the following cities:
2006—San Diego 2007—Sacramento
2008—Long Beach 2009—San Jose
2010—Los Angeles 2011—San FranciscoVisit the League’s Official Website--www.cacities.org PAGE 4 - PRIORITY FOCUS
May 26, 2006 - Issue #21
Activity heated up this week in the Assembly on
two key flood control bills, AB 1899 (Wolk) and AB
3050 (Jones). The League has no position at this
time on AB 1899 – the so-called “show me the
flood protection bill”. We are continuing to work
with the author to address the League’s concerns.
The League opposes AB 3050, which would
establish that local governments that approve
housing developments in areas previously zoned
agricultural or open space share liability with the
state for flood damage.
Amended AB 1899 Moves to Assembly
Floor
AB 1899 was removed from the Assembly
Appropriations Suspense File this week and
passed on to the Assembly floor. In the process, it
was substantially amended and should be in print
soon.
As amended, AB 1899 applies only to cities
and counties within the Sacramento-San Joaquin
Rivers watershed. It would establish a process for
cities and counties to follow in reviewing and
approving residential development in areas that
are subject to flooding with a depth of three feet or
greater. Prior to proceeding with such develop-
ment, verification of the existence of 100-year flood
protection would be required, and, a plan imple-
mented that will achieve a 200-year protection
standard within ten years. In the interim, the
measure would require that the developer provide
notice to homebuyers about the flood risk. The
developer would also be required to arrange for the
property to have flood insurance until the 200-year
standard it met. The bill also incorporates flood
protection verification and mitigation into the CEQA
review of a project.
AB 1899 is now pending on the Assembly floor
and will be taken up next week. Friday, June 2, is
the deadline to get bills out of the house of origin
The League thanks Assemblymember Wolk
and her staff for their willingness to respond to our
concerns and to amend the bill accordingly. At
this time, the League has no position on the bill
and is continuing our analysis, consultation with
cities and the author. Cities are encouraged to
review the amended version of AB 1899 carefully
and send their comments to the League’s Sacra-
mento office.
Making Lawful City Actions Responsible
for Flood Damage
AB 3050, which attempts to have cities and
counties share in the state’s liability for flood
damage, failed on the Assembly floor Thursday on
a 35-36 vote, with nine legislators not voting. The
bill was unexpectedly taken up at the last minute,
after many at the Capitol thought the house was
shutting down.
It should be noted that although the measure
failed passage, reconsideration was granted and
we expect it to come up again next week.
The League continues to oppose AB 3050
because we do not think it is appropriate to shift
liability to cities that approve development when
the city does not operate the flood control infra-
structure and if the city has complied with state
and federal law in approving the development.
The Legislature cannot have it both ways: it
cannot, one the one hand, pass laws that increas-
ingly push cities to approve housing, while on the
other hand, make cities liable for flood damage if
they approve housing while adhering to state and
federal planning and flood control laws.
Cities should write their Assemblymembers
and urge a no vote on AB 3050. Although AB 3050
failed on the Assembly floor, it was granted recon-
sideration and is likely to be taken up again.
AB 1899 – Status: Pending on the Assembly
floor; Position: Pending; Staff: Yvonne Hunter
AB 3050 – Status: Failed on Assembly floor;
reconsideration granted; Position: Oppose;
Staff: Yvonne Hunter
LEGISLATURE AWASH IN FLOOD BILLS LEGISLATURE AWASH IN FLOOD BILLS LEGISLATURE AWASH IN FLOOD BILLS LEGISLATURE AWASH IN FLOOD BILLS LEGISLATURE AWASH IN FLOOD BILLSPRIORITY FOCUS - PAGE 5 Visit the League’s Official Website--www.cacities.org
May 26, 2006 - Issue #21
The infrastructure bond package recently
approved by the Legislature and signed by the
Governor includes $19.9 billion for transportation
purposes. Those funds will be listed on the
November ballot as Proposition 1B, which is SB
1266 (Núñez/Perata), the Highway Safety, Traffic
Reduction, Air Quality, and Port Security Bond Act
of 2006.
In the May 5 issue of Priority Focus, a brief
summary of some of the bond components was
published. Listed below are additional details on
specific allocations and the project selection
processes for those allocations. This information
is intended to help you determine which portions
of bond funding, if passed, your city may eligible
for.
• $2 billion for the Local Street and Road
Improvement, Congestion Relief, and Traffic
Safety Account, allocated directly to cities and
counties for traffic congestion relief, traffic safety,
transit, storm damage, maintenance, construction
and other projects to improve the local street and
road system. $1 billion will go directly to cities
(minimum $400,000 allocation), and $1 billion will
go directly to counties. Eligible projects include
maintenance, rehabilitation and storm
damage (identical to Prop. 42), but also include
transit, congestion and safety projects.
• $4.5 billion to Corridor Mobility Improve-
ment Account to fund performance improvements
on highly congested travel corridors. This includes
major access routes to the state highway system
on the local road systems that relieve congestion.
Funds in the account, allocated by the Califor-
nia Transportation Commission (CTC), will be
used for performance improvements on the state
highway system, or major access routes to the
state highway system on the local road system
that relieve congestion by expanding capacity,
enhancing operations, or otherwise improving
travel times within these high-congestion travel
corridors, as identified by the department and
regional or local transportation agencies.
The CTC must develop and adopt guidelines,
including regional programming targets, by De-
cember 1. Project nominations can be submitted
by the Department of Transportation, regional
transportation planning agencies (RTPAs) or
county transportation commissions or authorities
responsible for preparing a regional transportation
improvement plan. All projects must be included
in a regional transportation plan.
Project nominations must be made no later
than January 15, 2007. All project nominations
must include documentation regarding the quanti-
tative and qualitative measures validating each
project’s consistency with the policy objectives
developed by the CTC.
The CTC must adopt a funding plan by March
1, 2007, which may be updated every two years in
conjunction with the adoption of the state transpor-
tation improvement program (STIP). The inclu-
sion of a project in the program will be based on
all of the following criteria:
o The project is a high-priority project
to improve mobility in the corridor as
demonstrated by either: 1) It’s inclusion in
the list of nominated projects by both the
department pursuant and the regional
transportation planning agency or county
transportation commission or authority;
and 2) If needed to fully fund the project,
the identification and commitment of
supplemental funding to the project from
other state, local, or federal funds.
o Able to commence construction or
implementation no later than
December 31, 2012.
o Improves mobility in a high-congestion
corridor by improving travel times or
reducing the number of daily vehicle hours
of delay, improves the connectivity of the
state highway system between rural,
suburban, and urban areas, or improves
the operation or safety of a highway or
road segment.
ADDITIONAL DETAILS ON PROPOSITION 1B: THE TRANSPORTATION BOND ADDITIONAL DETAILS ON PROPOSITION 1B: THE TRANSPORTATION BOND ADDITIONAL DETAILS ON PROPOSITION 1B: THE TRANSPORTATION BOND ADDITIONAL DETAILS ON PROPOSITION 1B: THE TRANSPORTATION BOND ADDITIONAL DETAILS ON PROPOSITION 1B: THE TRANSPORTATION BOND
Continued on Page 6Visit the League’s Official Website--www.cacities.org PAGE 6 - PRIORITY FOCUS
May 26, 2006 - Issue #21
o Improves access to jobs, housing,
markets, and commerce.
Current language in the proposal would
require the CTC to select projects with 60 percent
dedicated to 13 southern counties (San Luis
Obispo, Kern, Mono, Tulare, Inyo, Santa Barbara,
Ventura, Los Angeles, San Bernardino, Orange,
Riverside, San Diego and Imperial) and 40 per-
cent to the remaining counties in the state.
• $1 billion for improvements to State Route
99 traversing approximately 400 miles of the
Central Valley.
• $3.1 billion for the California Ports Infra-
structure, Security, and Air Quality Improvement
Act. Of the $3.1 billion, $2 billion is to fund im-
provements to trade corridors. These monies will
be allocated by the CTC for infrastructure im-
provements along federally designated trade
corridors. No funds can be allocated until the
Secretary of Business, Transportation and Hous-
ing and the Secretary for Environmental Protec-
tion develop and submit a trade infrastructure and
goods movement plan.
$1 billion in this fund will go to the State Air
Resources Board for emission reductions related
to goods movement in trade corridors commenc-
ing at airports, seaports and land ports of entry.
Additionally, $100 million will go to the Office
of Emergency Services for publicly-owned port,
harbor and ferry terminal security improvements.
Projects eligible for funding include, but are not
limited to: video surveillance equipment; X-ray
devices; cargo scanners; radiation monitors;
protective equipment; chemical agent, weapons
of mass destruction and overweight cargo detec-
tion devices; and, activities relative to emergency
response planning.
• $200 million for school bus retrofitting and
replacement to reduce air pollution.
• $2 billion for projects in the State Trans-
portation Improvement Program (STIP). These
funds are subject to current law and would require
compliance with the north/south split formula and
countywide shares, thus equitable distribution is
ensured throughout the state.
• $4 billion for the Public Transportation
Modernization Improvement and Service Enhance-
ment Account to fund intercity rail projects, com-
muter or urban rail operators, bus operators, water
transit operators, and other transit operators for
rehabilitation, improvement, or new capital
projects.
Of this amount, $400 million shall be appropri-
ated to Caltrans for intercity rail, of which $125
million shall be for intercity rail cars and locomo-
tives. The remaining funds ($3.6 billion) will be
allocated equally pursuant to Public Utilities Code
Sections 99314 and 99313, which distribute funds
to all RTPAs based on population and transit fare
recovery.
• $1 billion for the State-Local Partnership
Program Account for eligible transportation
projects nominated by an applicant transportation
agency. This program requires a dollar-for-dollar
match of local funds. Criteria for allocation of these
funds will be determined by the Legislature through
follow-up legislation. The CTC will allocate these
funds over a five-year period.
• $1 billion for the Transit System Safety,
Security and Disaster Response Account for
projects that increase protection again security and
safety and develop disaster response for public
transit systems. Criteria for allocation of these
funds will be determined by the Legislature through
follow-up legislation.
• $125 million for the Local Bridge Seismic
Retrofit Account to provide the 11.5 percent re-
quired match for the federal Highway Bridge
Replacement and Repair program for the seismic
work on local bridges, ramps, and overpasses as
determined by Caltrans. Thirty-nine cities have 97
bridges not yet retrofitted.
PROP 1B PROP 1B PROP 1B PROP 1B PROP 1B from page 5 from page 5 from page 5 from page 5 from page 5
????????????????? ?????????????????????????????
Continued on Page 7PRIORITY FOCUS - PAGE 7 Visit the League’s Official Website--www.cacities.org
May 26, 2006 - Issue #21
• $750 million for the Highway Safety, Reha-
bilitation and Preservation Account (SHOPP) for
safety, rehabilitation and preservation projects on
state highway systems. These funds will be
allocated by the CTC based on current statute for
state highway operation and protection programs
in Section 14526.5 of the Streets and Highways
Code.
$250 million of the funds in this account must
be used for traffic light synchronization projects or
other technology-based projects to improve safety,
operations and the effective capacity of local
streets and roads.
• $250 million for the Highway-Railroad
Crossing Safety Account for completion of high-
priority grade separation and railroad crossing
safety improvements. These monies will be
allocated to Caltrans for completion of high-priority
grade separation improvements pursuant to
Chapter 10 (section 2450) of the Streets and
Highways Code. Funds in this account require a
1-to-1 match of non-state funds.
$100 million in this account will be allocated by
the CTC, in consultation with the Public Utilities
Commission, outside of the current process in
statute, but should focus on crossings in ozone
non-attainment areas and crossings that delay
access to emergency services.
? ?????????????
PROP 1B PROP 1B PROP 1B PROP 1B PROP 1B from page 5 from page 5 from page 5 from page 5 from page 5
On Thursday, May 25, 2006, U.S. Treasury
Secretary announced that, beginning July 31, the
Internal Revenue Service (IRS) will stop collecting the
3 percent federal excise tax (FET) on long-distance
telephone calls, and the agency will refund to busi-
nesses and individual taxpayers all such taxes
collected over the past three years. Treasury esti-
mates that taxpayers will receive refunds totaling
about $13 billion.
The League’s Utility Users Tax (UUT) Technical
Task Force, a subcommittee of the League’s Rev-
enue and Taxation Policy Committee, has been
evaluating this issue for the last year, and its potential
impact on local collection of utility user taxes on long
distance telephone calls. The task force will make a
recommendation to the Revenue and Taxation Policy
Committee as to how the League should respond.
The League recommends that cities with UUTs
consult with their city attorneys first before deciding to
make any changes in response to this ruling to the
way UUTs are collected on long distance telephone
calls.
The FET on local telephone service remains in
place unless Congress acts to repeal it. The Bush
administration will support legislation sponsored in the
House by Representative Gary Miller, (CA-R) and in
the Senate by Senator Rick Santorum, (PA-R) to do
repeal the tax.
The League will continue to monitor this issue as
legislation moves through Congress.
IRS TO STOP COLLECTING TELEPHONE IRS TO STOP COLLECTING TELEPHONE IRS TO STOP COLLECTING TELEPHONE IRS TO STOP COLLECTING TELEPHONE IRS TO STOP COLLECTING TELEPHONE
TAX, REFUND $13 BILLION TAX, REFUND $13 BILLION TAX, REFUND $13 BILLION TAX, REFUND $13 BILLION TAX, REFUND $13 BILLION
Don’t miss this opportunity to get the League’s most useful reference tool. This
comprehensive California directory provides important contact information for mayors, council
members and city department heads. The directory also features the League’s staff directory,
League partners, affiliate organizations and a wide variety of advertisers.
INFORMATION YOU NEED, RIGHT A T YOUR FINGERTIPS!
Purchase this publication online at www.cacities.org/store or call (916) 658-8257 for an order
form. City officials price $30, non-city officials price $65, plus shipping & handling.
THE 2006 CITY HALL DIRECTORY IS NOW AVAILABLE!Visit the League’s Official Website--www.cacities.org PAGE 8 - PRIORITY FOCUS
May 26, 2006 - Issue #21
Continued on Page 9
Gov. Schwarzenegger proposed in January
and in his May revision to the FY 2006-07 budget
to provide early repayment of $920 million in Prop.
42 funds. His proposal was to allocate $410
million to the Traffic Congestion Relief Program
(TCRP), $255 million to the State Transportation
Improvement Program, and $255 million to cities
and counties for local streets and roads (half for
cities, half for counties).
The League strongly supports the Governor’s
proposal. The $255 million for local streets and
roads will provide the only Proposition 42 funding
dedicated to cities and counties for the local
system for the budget year.
Senate Approves Reduced Repayment
Senate Budget Subcommittee #4 recently
approved repayment at the level of $460 million
(half of the Governor’s proposal), with the re-
quested repayment allocation proportionally
reduced (approximately $205 million to the Traffic
Congestion Relief Fund, $127.5 million to local
streets and roads and $127.5 million to the STIP).
The subcommittee cited the recently enacted
package of bills to place infrastructure bonds on
the November 2006 ballot as background for its
recommendation. The subcommittee specifically
noted that SB 1266 includes $19.9 billion in bonds
for transportation and SCA 7 further restricts the
ability of the Governor and the Legislature to
suspend Proposition 42 during a fiscal crisis, and
provides for repayment of all past Proposition 42
loans no later than June 30, 2016.
Subcommittee background materials further
referenced that a FY 2006-07 repayment at the
level of $460 million would still provide a significant
prepayment of the amount due in FY 2007-08 and
would more than double the annual repayment
amount required in SCA 7.
Assembly Supports $920 Million, But Shifts
Allocations
Earlier this week, the Assembly Budget Sub-
committee #5 recommended repayment of the
$920 million in the Governor’s proposal, but
shifted the allocations.
According to subcommittee background
materials, at the time of the Governor’s proposal it
was estimated that the payment to the STIP and
local streets and roads would include the full
principal amount of $232 million and an interest
amount of $23 million for a total payment of $255
million for each. This resulted in an estimated
$410 million for the TCRP.
However, the Legislative Analyst’s Office
indicates that the Controller has updated the
interest amounts owed, and the STIP and local
streets and roads would actually receive $13
million in interest payments, for a total payment of
$245 million for each.
The subcommittee, on a unanimous vote,
passed repayment of $920 million as follows:
$308 million to the TCRP; $245 million to the
STIP; $245 million to local streets and roads; and
$122 million to the Public Transit Account.
What’s Next?
Due to the differing recommendations by the
subcommittees, the Proposition 42 repayment
issue will now go to the full Budget Conference
Committee consisting of members of both houses
of the legislature. It is unclear when the repay-
ment issue will be addressed, but the League will
continue to advocate for full repayment for local
streets and roads.
Other Budget Issues—Spillover Revenues
and the Public Transportation Account
Cities with transit agencies will be interested in
the Governor’s proposal to divert $669 million in
FY 2006-07 to transportation debt funding and the
Bay Bridge seismic retrofit project rather than to
the Public Transportation Account (PTA). The
funds he proposes to use are known as “spillover”
funds: revenues from the growth in sales tax on
gasoline, to the extent they exceed the growth in
BUDGET UPDATE BUDGET UPDATE BUDGET UPDATE BUDGET UPDATE BUDGET UPDATE from page 1 from page 1 from page 1 from page 1 from page 1 ?????? ??????????????????????????????????PRIORITY FOCUS - PAGE 9 Visit the League’s Official Website--www.cacities.org
May 26, 2006 - Issue #21
Visit (and bookmark!) the League’s
Legislative Resources page
(www.cacities.org/legresources). You’ll find
a roster and contact information for the
League’s legislative staff; the online Bill
Search program, background materials on
lobbying your legislators, and more.
FIND A BILL, LEGISLATORS, LEG FIND A BILL, LEGISLATORS, LEG FIND A BILL, LEGISLATORS, LEG FIND A BILL, LEGISLATORS, LEG FIND A BILL, LEGISLATORS, LEG
COMMITTEE - OR ASK LEG STAFF COMMITTEE - OR ASK LEG STAFF COMMITTEE - OR ASK LEG STAFF COMMITTEE - OR ASK LEG STAFF COMMITTEE - OR ASK LEG STAFF
other sales tax revenues. (See “What Are the
Spillover Funds?”, p. 11.)
As proposed by the Governor, the funds would
be transferred to the Transportation Debt Service
Fund that will pay a portion of the debt service on
existing and new transportation bonds (e.g.,
Proposition 116 and Proposition 1B). The adminis-
tration estimates that this could provide over $4.1
billion through FY 2015-16 toward transportation
debt service costs, with the state general fund
paying the remaining debt service.
If the Legislature and Governor instead follow
the FY 2005-06 budget agreement, the estimated
$669 million of spillover revenue would provide
$200 million for the general fund, $125 million for
the Bay Bridge seismic retrofit program (BATA),
and $344 million to the PTA.
However, both the Senate and Assembly
Budget Subcommittees have rejected the
Governor’s proposal and will now consider how to
allocate the additional PTA funds. As this issue
moves forward to the Budget Conference Com-
mittee, the Senate and Assembly recommenda-
tions it will become clearer.
?????? ? BUDGET UPDATE BUDGET UPDATE BUDGET UPDATE BUDGET UPDATE BUDGET UPDATE from page 8 from page 8 from page 8 from page 8 from page 8
There were significant developments this
week on telecommunications reform in both
Congress and the state Legislature. Here are the
highlights:
State Legislature
AB 2987 Passes to the Assembly Floor. The
Assembly Appropriations Committee passed AB
2987 (Núñez/Levine), with amendments. AB 2987
addresses telecommunications’ companies’
desire to by-pass local franchising requirements
for video services, by establishing a statewide
franchise that would address the telephone
companies’ “speed to market” concern.
The amendments fail to address most of the
issues the League has been concerned with. The
bill is expected to be taken up on the floor of
Assembly next week, probably on Thursday, June
1. Friday, June 2, is the deadline for policy bills to
pass their house of origin.
Please write or call your Assemblymember
to OPPOSE this bill! (See “AB 2987 Amended:
League Still Opposed” for talking points. You can
also access a sample letter at www.cacities.org/
advocacycenter.)
Congress
Second Hearing on Senate Telecom Re-
form Measure. The Senate Committee on
Commerce, Science and Transportation held the
second of three planned hearings on S. 2686, the
Communications, Consumers’ Choice, and
Broadband Deployment Act of 2006. The hearing
covered net neutrality and interconnection.
Senate Democratic Reform Measure.
Senate Democratic staff released a working draft
of an alternative telecom reform measure. The
League is still analyzing this measure. The online
publication “Multimedia News” issued the following
story about the measure on May 25:
A telephone company could get a local cable
TELECOM UPDATE TELECOM UPDATE TELECOM UPDATE TELECOM UPDATE TELECOM UPDATE
Continued on Page 10Visit the League’s Official Website--www.cacities.org PAGE 10 - PRIORITY FOCUS
May 26, 2006 - Issue #21
TELECOM TELECOM TELECOM TELECOM TELECOM from page from page from page from page from page 9 9 9 9 9
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statewide issues. Stay informed about city issues
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franchise within 30 days if it agreed to the terms
and conditions of the franchise most recently
granted to the market’s cable incumbent, accord-
ing to a draft bill prepared by staff to Senate
Commerce Committee Democrats.
The bill, designed to update the Telecommuni-
cations Act of 1996, would phase in franchisewide
buildout requirements on phone companies and
impose Internet-nondiscrimination mandates on
broadband-access providers. It would also bar
cable operators under many conditions from
withholding programming not delivered via satel-
lite.
A copy of the 94-page bill was obtained by
Multichannel News Wednesday.
Under the bill, a phone company unwilling to
sign the incumbent’s franchise agreement could
negotiate different terms with local regulators
during a 60-day window. If those talks failed, the
phone company would be allowed to enter the
video market within 30 days under “standard
franchise” — a default mechanism that includes a
5% franchise fee and other conditions specified in
the bill.
Cable incumbents can escape their local
franchises and obtain a standard franchise after
another video provider with a standard franchise
offers service to more than 5% of homes in the
same franchise area.
House Judiciary Committee Passes “Net
Neutrality” Bill. The bill would require broadband
providers to abide by strict Net neutrality prin-
ciples, meaning that their networks must be
operated in a “nondiscriminatory” manner.
The vote is a surprise victory for Internet
companies such as Amazon.com, Google,
Microsoft and Yahoo that had lobbied fiercely in
the last few months for stricter laws to ensure that
Verizon, AT&T and other broadband providers
could not create a “fast lane” reserved for video or
other high-priority content of their choice.
All 14 Democrats on the committee (joined by
6 Republicans) supported the measure, while 13
Republicans opposed it.
The vote appears to be more about a turf war
between two House committees than it is about a
new-found conviction that content on the Internet
should continue to be freely available. The House
telecom reform measure, H.R. 5252, would give
exclusive authority to the Federal Communications
Commission (FCC) to investigate violations of Net
neutrality principles. That legislation is sponsored
by Rep. Joe Barton, a Texas Republican who
heads the House Energy and Commerce Commit-
tee, which also has jurisdiction over the FCC.
The Judiciary Committee vote appears to be
an attempt to ensure that Judiciary Committee
members would not be prevented from holding
hearings on Net neutrality antitrust violations.
Quoted in the online publication C/NET News.com,
California Representative Adam Schiff said, “I think
the bill is a blunt instrument, and yet I think it does
send a message that it’s important to attain juris-
diction for the Justice Department and for antitrust
issues.”
? ?????????????????????????????????????????????PRIORITY FOCUS - PAGE 11 Visit the League’s Official Website--www.cacities.org
May 26, 2006 - Issue #21
Since 1971, state law has provided that rev-
enues from the growth in sales tax on gasoline, to
the extent they exceed the growth in other sales
tax revenues, are to be transferred to the Public
Transportation Account for public transit capital
and operations. These funds, commonly known as
the “spillover,” do not flow to Proposition 42 and
neither the Traffic Congestion Relief Program nor
Proposition 42 has any impact on the spillover.
In recent years, the Legislature has diverted
$694 million of these spillover funds to the general
fund and other purposes.
The Transportation Development Act of 1971
created a statewide funding program for local
public transportation services and facilities. One
feature of this act involved the lowering of the
state’s sales tax rate by ¼ percent and the exten-
sion of the sales tax to gasoline, which had not
been previously subject to the sales tax. This
action was intended to be revenue neutral, but the
act provided that any excess revenues to the state
from this change would be transferred to the
Public Transportation Account.
The Board of Equalization and the Department
of Finance are charged each year with
determining the amount of the spillover: the
difference between (a) a 5 percent state sales tax
applied to all taxable goods except gasoline, and
(b) a 4¾ percent state sales tax applied to all
taxable goods including gasoline. Essentially, the
spillover is generated when gasoline prices in-
crease at a faster rate than all other taxable items.
Hence we are presently seeing unprecedented
amounts of revenue in the spillover.
Neither the Traffic Congestion Relief Program
of 2000, nor Proposition 42 altered the spillover
provisions. Proposition 42 captures the sales tax
on gasoline not subject to the spillover that had
previously gone to the state general fund. Proposi-
tion 42 revenues grow in tandem with the overall
growth in total taxable sales. Proposition 42 does
not interfere with the spillover.
From its inception until FY 1985-86, the
spillover provided revenues to public transit. But
there was no spillover during most of the subse-
quent 17 years. Over the last three years, the
spillover has generated a significant source of
funds that help the state deal with its general fund
problems. This recent period of critical funding
shortfalls initiated the diversion of the spillover
funds to the general fund.
Current law provides that such diversions,
though limited, will continue in FY 2006-07. Under
the FY 2005-06 Budget Agreement (now codified
in Revenue and Taxation code 7102), in FY 2006-
07, the first $200 million of spillover would go to
the state general fund. Any additional spillover
revenue up to $125 million would go to the BATA,
and any revenue beyond that to the Public Trans-
portation Account
Under the administration’s proposal, the funds
would be used to finance transportation pro-
grams, a logical connection with sales tax on
gasoline. The administration notes that specific
provisions of Revenue and Taxation Code Section
7102 provide that the allocation of the spillover
may be altered with a 2/3 vote of each house, and
they argue that this proposal is consistent with
the intentions of current law.
Opponents of the Governor’s proposal argue
that spillover revenues are most needed for public
transit when gas taxes are high and people seek
alternative forms of transportation to their auto-
mobiles. Opponents also note that this proposal
is unprecedented in its use of the spillover as a
long term on-going resource that in effect relieves
fiscal burden on the general fund. The spillover
has been diverted to the general fund in recent
years, but only as a one-time remedy (or several-
time remedy as the case may be) to the state’s
fiscal crisis. The expectation among most ob-
servers has been that when the state’s fiscal
condition is restored, that the spillover will once
again be transferred to the Public Transportation
Account as was intended in the Transportation
Development Act of 1971.
WHAT ARE THE “SPILLOVER” FUNDS? WHAT ARE THE “SPILLOVER” FUNDS? WHAT ARE THE “SPILLOVER” FUNDS? WHAT ARE THE “SPILLOVER” FUNDS? WHAT ARE THE “SPILLOVER” FUNDS?Visit the League’s Official Website--www.cacities.org PAGE 12 - PRIORITY FOCUS
May 26, 2006 - Issue #21
AB 2987 responds to telecommunications’
companies’ desire to by-pass local franchising
requirements for video services, by establishing a
statewide franchise.
The amendments (which at this writing are not
yet in print) do the following:
• Attempt, unsuccessfully, to convert the so-
called “fee” of the original version (in
actuality a tax) into a true franchise fee.
• Impose some new requirements on
the transfer of a state franchise from
the original holder to a new entity.
• Include some new provisions relating to
PEG channels, but, significantly, in-
clude new loopholes that may allow
franchise holders to avoid providing
channels that are dedicated exclusively
to public or educational programming.
• Include intent language requiring a level-
playing field to ensure competition is
fair, and will require wide-spread build-
out of state-of-the-art services so that
competition will benefit the greatest
number of customers, and will prohibit
discrimination, redlining, and service
abandonment. But this language
lacks any enforcement mechanism,
specificity, or definitions of the
vague terms used.
• Provide that the local entity shall enforce
customer service and protection stan-
dards. It is unclear whether this would
constitute a new state mandate or not.
• Permit the local entity to adopt an ordi-
nance imposing penalties for material
breaches of a state franchise.
• Allow local entities to continue to impose
generally applicable fees and taxes,
including utility user taxes.
• Provide that the state franchise would be
administered by the Department of
Consumer Affairs rather than the
Department of Corporations.
Next Steps. The bill is expected to be taken
up on the floor of Assembly next week, probably
AB 2987 AB 2987 AB 2987 AB 2987 AB 2987 from page 1 from page 1 from page 1 from page 1 from page 1
Continued on Page 13
?????????????????? ????????????????????????????
on Thursday, June 1. (Friday, June 2, is the
deadline for policy bills to pass their house of
origin.)
What You Can Do: Please Call or Write
Your Assembly Members to Oppose This Bill!
Here are talking points to use in either a conversa-
tion or a letter (or both!):
• Discriminatory. Cities support competi-
tion in telecommunications services, but it has to
be FAIR TO ALL CALIFORNIANS! AB 2987
permits new entrants in the video service industry
to discriminate, picking and choosing the neigh-
borhoods they will serve in a community, while
ignoring other neighborhoods in the same com-
munity. The addition of intent language does not
constitute protection against discrimination. Who
is protecting the underserved? The Department
of Consumer Affairs is only empowered to pro-
cess applications, not evaluate their merit. We
see no specific or detailed provisions that will
prevent discrimination and decrease the “digital
divide.”
• PEG Channels. Public access to broad-
casting is not protected. The bill fails to ad-
equately protect the community’s public, educa-
tion and governmental (PEG) channels. These are
important assets in a community that permit the
televising of community events, governmental
deliberations and educational opportunities. The
current language seriously narrows the PEG
options now open to a community.
• New State Bureaucracy. The bill estab-
lishes a new state bureaucracy that will grow to
regulate what is essentially a local franchise
process. The new state bureaucracy will be put in
charge of determining issues relating to local
streets. In short, the state is taking over local
streets when it comes to industries providing
video services. Have a problem on a local street?
Go to Sacramento and ask the state to correct it!PRIORITY FOCUS - PAGE 13 Visit the League’s Official Website--www.cacities.org
May 26, 2006 - Issue #21
AB 2987 AB 2987 AB 2987 AB 2987 AB 2987 from page 12 from page 12 from page 12 from page 12 from page 12
SB 1177 SB 1177 SB 1177 SB 1177 SB 1177 from page 1 from page 1 from page 1 from page 1 from page 1
SB 1177 undercuts the ability of local govern-
ments to implement their development standards
on density bonus projects.
Density Bonus Law has become a Byzantine
and litigation-oriented process due to a series of
recent changes to the law. SB 1177 compounds
the confusion and weakens local land use author-
ity by deleting language from the statute which
empowers local government to require developers
to demonstrate that the waivers or modifications
they are demanding are necessary “to make the
housing units economically feasible.”
It is replaced with other language that will allow
developers to game the waiver process to attempt
to demand more waivers than they really need to
produce the density bonus units.
? ? ???????????
The following are summaries of just a few of
the legislative bills that are currently being
acted upon by the League of California
Cities. For more information about these and
other bills, please visit the League
website’s new “Issues and Advocacy”
page (www.cacities.org/
issuesandadvocacy) – a one-stop location
to access information about legislation,
policy issues and related developments.
You can track information on bills
(www.cacities.org/legtracking), locate legisla-
tors and legislative committees, send letters
to legislators or the media through the online
Advocacy Center, research League policy
positions, access useful related links, and
much more.
Le Le Le Le Legisla gisla gisla gisla gislati ti ti ti ti v v v v ve Bill e Bill e Bill e Bill e Bill Action Action Action Action Action
?????? ??????????????????
What Cities Can Do
Cities are encouraged to write an opposition
letter to SB 1177 to Senator Hollingsworth and
copy their senator and assemblymember. For a
more detailed explanation of this bill, please review
the League’s most recent letter of opposition. A
sample letter is also available by looking up SB
1177 on the League’s bill search, located at
www.cacities.org/billsearch.
ENVIRONMENTAL
SB 1059 (Escutia). Transmission Line
Corridors. Bill Amended – League Removes
Opposition. SB 1059 was one of the most
fiercely opposed energy bills of last year’s ses-
sion. However, last week the bill was amended to
address all of the League’s concerns about its
preemption of local land use authority, general plan
amendments and possible takings lawsuits. As a
result of those amendments, the League and other
local government associations have removed their
opposition and are now neutral on the bill. Cities
who were previously opposed are encouraged to
review the amended bill and contact the author,
Continued on Page 14
• Rights-of-Way. This bill fails to ad-
equately protect the taxpayers’ investment in
public right-of-way.
• Revenues. The local government rev-
enues from franchise fees are in jeopardy in the
current language in the bill. Serious legal flaws
remain. The bill in its current form is a tax under
the constitution of the state. The language needs
to be amended to ensure that the traditional local
franchise fee for local government are maintained
and not taken over and preempted by the state tax
currently in the bill. Also, the bill narrows the
definition of “gross revenues” that is the basis for
calculating local government revenues, likely
resulting in a revenue loss.
For these reasons, the city of ________ is
opposed to AB 2987 and asks for your NO vote on
the bill.Visit the League’s Official Website--www.cacities.org PAGE 14 - PRIORITY FOCUS
May 26, 2006 - Issue #21
Le Le Le Le Legisla gisla gisla gisla gislati ti ti ti tiv v v v ve Bill e Bill e Bill e Bill e Bill Action Action Action Action Action
thank her for responding to the concerns of local
government and to indicate that they are now
neutral on the bill.
As amended May 16, SB 1059 would still
authorize the California Energy Commission to
engage in long term planning to identify and
designate possible transmission corridors, in
which, at some future date, transmission lines
might be built. However, the bill no longer re-
quires local governments to amend their general
plans to be consistent with the corridors. Instead,
the bill provides for extensive property owner
notification and local government consultation and
requires local governments to “... consider the
designated corridor when making a determination
regarding a land use change within or adjacent
to the corridor that could affect its continuing
viability to accommodate a transmission line
planned within the corridor.”
SB 1059 is now pending in the Assembly
Energy and Utilities Committee and Assembly
Local Government Committee. The League
thanks Senator Escutia, her staff and the Energy
Commission for working with us to resolve our
concerns. It was a long haul, but worth it. Staff:
Yvonne Hunter; Status: AsmU&C; Position:
Neutral.
PUBLIC WORKS
AB 573 (Wolk). Indemnification. Design
Professionals. After working for many months to
try to resolve our differences, the League is now
officially opposed to AB 573 (Wolk). We had
informed the author’s staff that if our concerns
were not resolved, we would strongly oppose the
bill. This measure would restrict the types of
indemnification clauses that may be included in a
public agency contract with a design or engineer-
ing professional or firm. Instead, it would specify
an indemnification provision that does not allow a
public agency to adequately manage its potential
liability, thus limiting the options available to public
agencies to protect their taxpayers.
AB 573 purports, according to the sponsors, to
grant to California public agencies the authority to
include indemnity provisions in their contracts with
architecture and engineering (“A/E”) consultants.
However, such authority already exists. AB 573
would actually limit the flexibility of public agencies
to negotiate professional service agreements
which reflect the particular risks of each project
and the relative capacities and capabilities of
different architects and engineers. Moreover, AB
573 addresses an issue that was already fairly and
reasonably addressed through AB 994 (Sweeney)
in 1997. In fact, AB 573 goes far beyond AB 994
(Sweeney), to the detriment of the public.
In substance, AB 573 is identical to several
prior bills that were rejected or vetoed. (See, for
example, SB 1915 (Figueroa 2004); AB 1839
(Campbell 2002); AB 1070 (Campbell 997 – 1998.
While the sponsors provided several examples of
cities that include “fair” (from their perspective)
indemnification provisions in their contacts, the
League’s sampling of some of the cities on the list
indicates that those cities were either no longer
using those provisions, had used them in a special
situation only, or were reviewing their continued
use of those provisions.
Cities are encouraged to have their city attor-
neys and public works directors carefully review AB
573 and then send letters of opposition to the
author and members of the Senate Judiciary
Committee. Please indicate how you believe such
indemnification restrictions would impact your
ability to find qualified design and engineering
contractors, and whether, as the sponsors con-
tend, the current system is actually limiting the
ability of cities to find qualified design contractors.
The League disputes this contention. Staff:
Yvonne Hunter; Status: SenJud, Hearing June 16;
Position: Oppose.
TRANSPORTSATION
AB 2210 (Goldberg). Tow Trucks. Regulating.
AB 2210 strengthens regulations on vehicle towing
Continued on Page 15PRIORITY FOCUS - PAGE 15 Visit the League’s Official Website--www.cacities.org
May 26, 2006 - Issue #21
Le Le Le Le Legisla gisla gisla gisla gislati ti ti ti ti v v v v ve Bill e Bill e Bill e Bill e Bill Action Action Action Action Action
and protects consumers. In addition, this bill
affirms the authority that local policy leaders have
regarding the licensing and regulation of tow truck
companies. AB 2210 will create a safe and
speedy towing and vehicle recovery process that
is regulated at the local level, which can reduce
the wasteful use of local law enforcement’s limited
resources while ensuring the safety of citizens.
Staff: Liisa Lawson Stark; Status: AsmAppr;
Position: Support.
WANT TO SEND A LETTER IN WANT TO SEND A LETTER IN WANT TO SEND A LETTER IN WANT TO SEND A LETTER IN WANT TO SEND A LETTER IN
SUPPORT OF A LEAGUE POSITION? SUPPORT OF A LEAGUE POSITION? SUPPORT OF A LEAGUE POSITION? SUPPORT OF A LEAGUE POSITION? SUPPORT OF A LEAGUE POSITION?
HERE’S WHO TO CALL: HERE’S WHO TO CALL: HERE’S WHO TO CALL: HERE’S WHO TO CALL: HERE’S WHO TO CALL:
ASSEMBLY APPROPRIATIONS (18)—
Chu (Chair), Runner (Vice Chair), Bass,
Berg, Calderon, De La Torre, Emmerson,
Haynes, Karnette, Klehs, Leno, Nakanishi,
Nation, Oropeza, Ridley–Thomas, Saldaña,
Walters, and Yee. Chief Consultant: Geoff
Long. Principal Consultants: Julie Salley–
Gray, Steve Archibald, Scott Bain, Chuck
Nicol, Kimberly Rodriguez, Stephen Shea.
Secretary: Laura Lynn Gondek. Room 2114.
Phone: 319–2081.
ASSEMBLY UTILITIES AND COM-
MERCE (11)—Levine (Chair), Blakeslee
(Vice Chair), Baca, Bogh, Cohn, De La Torre,
J. Horton, Keene, Montañez, Ridley–Thomas,
and Wyland. Chief Consultant: Edward
Randolph. Principal Consultant: Gina Mandy.
Secretary: Kelly Roberts. Room 5136.
Phone: 319–2083.
SENATE JUDICIARY—(5)—Dunn
(Chair), Morrow (Vice–Chair), Ackerman,
Escutia and Kuehl. Chief Counsel: Gene
Wong. Deputy Chief Counsel: Gloria Megino
Ochoa. Counsels: Alexandra Montgomery,
Amanda Taylor and Benjamin Palmer. Assis-
tants: Carol Thomas and Roseanne Moreno.
Phone (916)651–4113. Room 2187.
June 2, 2006
Issue #22-2006
WANT MORE DETAILS
ON BILLS?
Visit the League of
California Cities
website at
www.cacities.org/
billsearch.
LEAGUE URGES CITIES TO OPPOSE H.R. 5252 UNLESS AMENDED LEAGUE URGES CITIES TO OPPOSE H.R. 5252 UNLESS AMENDED LEAGUE URGES CITIES TO OPPOSE H.R. 5252 UNLESS AMENDED LEAGUE URGES CITIES TO OPPOSE H.R. 5252 UNLESS AMENDED LEAGUE URGES CITIES TO OPPOSE H.R. 5252 UNLESS AMENDED
RIGHTS-OF-WAY AND BUILD-OUT ISSUES OF KEY CONCERN
FIND A BILL, LEGISLATORS, LEG COMMITTEE - OR ASK LEG STAFF FIND A BILL, LEGISLATORS, LEG COMMITTEE - OR ASK LEG STAFF FIND A BILL, LEGISLATORS, LEG COMMITTEE - OR ASK LEG STAFF FIND A BILL, LEGISLATORS, LEG COMMITTEE - OR ASK LEG STAFF FIND A BILL, LEGISLATORS, LEG COMMITTEE - OR ASK LEG STAFF
WHAT WILL AB 2987 MEAN FOR YOUR CITY? WHAT WILL AB 2987 MEAN FOR YOUR CITY? WHAT WILL AB 2987 MEAN FOR YOUR CITY? WHAT WILL AB 2987 MEAN FOR YOUR CITY? WHAT WILL AB 2987 MEAN FOR YOUR CITY?
WESTERN CITY WESTERN CITY WESTERN CITY WESTERN CITY WESTERN CITY MAGAZINE RECOGNIZED FOR EXCELLENCE IN MAGAZINE RECOGNIZED FOR EXCELLENCE IN MAGAZINE RECOGNIZED FOR EXCELLENCE IN MAGAZINE RECOGNIZED FOR EXCELLENCE IN MAGAZINE RECOGNIZED FOR EXCELLENCE IN
COMMUNICATIONS COMMUNICATIONS COMMUNICATIONS COMMUNICATIONS COMMUNICATIONS
LEGISLATIVE BILL SUMMARIES LEGISLATIVE BILL SUMMARIES LEGISLATIVE BILL SUMMARIES LEGISLATIVE BILL SUMMARIES LEGISLATIVE BILL SUMMARIES
Page 2 Page 2 Page 2 Page 2 Page 2
Page 4 Page 4 Page 4 Page 4 Page 4
Page 6 Page 6 Page 6 Page 6 Page 6
??????????????????????? ???????????????
??????????????????????? ???????????????
77 - 0 - 3. That is the vote count from the Assembly floor Wednesday
evening on the Speaker’s bill, AB 2987. AYES – 77; NOES – 0; and, NOT
VOTING – 3. This bill enacts a statewide franchising process for industries
providing video and broadband Internet services to California residents.
Assemblymembers Nation, Niello and Oropeza chose not to vote on the
bill. All other assembly members voted “YES!” For more, see Page 5.
77 - 0 - 3: ASSEMBLY PASSES SPEAKER’S 77 - 0 - 3: ASSEMBLY PASSES SPEAKER’S 77 - 0 - 3: ASSEMBLY PASSES SPEAKER’S 77 - 0 - 3: ASSEMBLY PASSES SPEAKER’S 77 - 0 - 3: ASSEMBLY PASSES SPEAKER’S
TELECOMMUNICATIONS BILL (AB 2987) TELECOMMUNICATIONS BILL (AB 2987) TELECOMMUNICATIONS BILL (AB 2987) TELECOMMUNICATIONS BILL (AB 2987) TELECOMMUNICATIONS BILL (AB 2987)
The League is urging cities to call or fax a letter to the members of the
Budget Conference Committee to urge their support of the $920 million early
payback of Proposition 42 funds for local streets and roads. ($245 million would
go to cities and counties.) A sample letter is available on the League’s website
at www.cacities.org/infrastructure2006.
For more, see Page 3.
BUDGET UPDATE: PROP 42 REPAYMENT STILL ON THE TABLE BUDGET UPDATE: PROP 42 REPAYMENT STILL ON THE TABLE BUDGET UPDATE: PROP 42 REPAYMENT STILL ON THE TABLE BUDGET UPDATE: PROP 42 REPAYMENT STILL ON THE TABLE BUDGET UPDATE: PROP 42 REPAYMENT STILL ON THE TABLE
Cities are encouraged to have their planners and city attorney review SB
1800 (Ducheny) and the recent amendments added to the bill on May 23.
While Proposition 1A may have protected local revenues, local land use
authority remains vulnerable to continuous legislative attack and erosion.
For more, see Page 4.
SB 1800 (DUCHENY): AMENDMENTS TO STATE HOUSING SB 1800 (DUCHENY): AMENDMENTS TO STATE HOUSING SB 1800 (DUCHENY): AMENDMENTS TO STATE HOUSING SB 1800 (DUCHENY): AMENDMENTS TO STATE HOUSING SB 1800 (DUCHENY): AMENDMENTS TO STATE HOUSING
PROPOSAL MERIT CITY REVIEW PROPOSAL MERIT CITY REVIEW PROPOSAL MERIT CITY REVIEW PROPOSAL MERIT CITY REVIEW PROPOSAL MERIT CITY REVIEW
Page 7 Page 7 Page 7 Page 7 Page 7Visit the League’s Official Website--www.cacities.org PAGE 2 - PRIORITY FOCUS
June 2, 2006 - Issue #22
The House is expected to vote next week on
H.R. 5252, the Community, Opportunity, Promo-
tion and Enhancement Act (COPE Act). The bill
aims to reform federal telecommunications law
and increase competition in the broadband and
video service markets, but local concerns regard-
ing what actual effect the proposed legislation will
have on residents in our communities remains
unknown.
On Wednesday, May 30, Congresswoman
Diane Watson (D-Calif.) wrote a “dear colleague”
letter (available for download at www.cacities.org/
telecom) expressing her concerns about keeping
the control of the local rights-of way local. The
League commends her for her leadership on the
issue and believes that we need more representa-
tives to understand the effects that this legislation
will have on their local communities.
The League is asking for amendments that
address the following two issues:
Rights-of-Way
While local governments would retain authority
to regulate the use of public rights-of-way, en-
forcement authority would rest with the Federal
Communications Commission (FCC) 3,000 miles
away in Washington, D.C. The bill is also silent on
the appropriate forum to resolve rights-of-way
disputes, leaving that authority again to the FCC –
an agency that most people have no idea even
how to contact!
• The ability to manage our rights-of-way
and related infrastructure is meaningless
without the ability to enforce actual activi-
ties occurring in our local streets and
related areas.
• When did it become appropriate for the
FCC to take charge of our local roads?
• Does the FCC have nationwide knowledge
of city streets, sidewalks, local safety and
traffic patterns/congestion?
• How will the FCC be able to handle all of
Continued on Page 4
LEAGUE URGES CITIES TO OPPOSE H.R. 5252 UNLESS AMENDED LEAGUE URGES CITIES TO OPPOSE H.R. 5252 UNLESS AMENDED LEAGUE URGES CITIES TO OPPOSE H.R. 5252 UNLESS AMENDED LEAGUE URGES CITIES TO OPPOSE H.R. 5252 UNLESS AMENDED LEAGUE URGES CITIES TO OPPOSE H.R. 5252 UNLESS AMENDED
RIGHTS-OF-WAY AND BUILD-OUT ISSUES OF KEY CONCERN
these local concerns in a timely fashion?
• What does a city do when, without the
city’s knowledge, a service provider cuts
into a local street, bursts a water main and
disrupts traffic? How long does the city
wait for the FCC to get back to them on
how to resolve this immediate safety
issue?
• Residents are not going to wait for a
response from the FCC. They are going to
call their elected officials, members of
Congress and demand answers. Are we
forced to tell them “sorry there is nothing
we can do, Congress gave away our
authority to control our streets to the
FCC?”
Build-Out
H.R. 5252 allows service providers to self-
select their service areas and contains NO build-
out requirement (not even goals!) to ensure that
local communities are served.
• Telecommunications providers contend
they have “every incentive” to expand their
coverage and therefore, should not have
any build out requirements or even any
build-out goals. If they truly have the
incentive, build out goals should be a non-
issue.
• Somehow the cable industry figured out
how to meet existing build out require-
ments and as a result many of our com-
munities and residents are served. How is
it that cable can do it and telecommunica-
tions providers can’t or shouldn’t?
• Clearly the federal government believes
build out requirements are fair and reason-
able as they require them when they give
out spectrum.
What Cities Can Do
The League is asking cities to call or write their
congressional representatives to oppose thePRIORITY FOCUS - PAGE 3 Visit the League’s Official Website--www.cacities.org
June 2, 2006 - Issue #22
PROP 42 PROP 42 PROP 42 PROP 42 PROP 42 from page 1 from page 1 from page 1 from page 1 from page 1
Background. As reported in Priority Focus last
week, differing actions by the Senate and Assembly
budget subcommittees mean that the joint legislative
Budget Conference Committee will make the ultimate
decision regarding Proposition 42 repayment funds
and allocation of those funds in the FY 2006-07
budget.
The committee’s deliberations are based around
two differing proposals:
• The Senate Budget Subcommittee #4
approved repayment at the level of $460 million
(half of the Governor’s proposal), with the re-
quested repayment allocation proportionally re-
duced (approximately $205 million to the Traffic
Congestion Relief Fund, $127.5 million to local
streets and roads and $127.5 million to the State-
wide Transportation Improvement Project [STIP]).
• The Assembly Budget Subcommittee #5
recommended repayment of the $920 million in the
Governor’s proposal, but shifted the allocations.
The repayment would be allocated as follows: $308
million to the Traffic Congestion Relief Program
(TCRP); $245 million to the STIP; $245 million to
local streets and roads; and $122 million to the
Public Transit Account.
The League supports the Assembly pro-
posal to provide repayment of local street and
road money consistent with the Governor’s
proposal.
Call to Action!
The Budget Conference Committee is currently
meeting to consider both the Senate and Assembly
recommendations for early repayment of Proposition
42 funds. Contact the members of the Budget
Conference Committee by phone or fax and
urge their support of the $920 million early
payback for local streets and roads ($245 million
would go to cities and counties.)
The Budget Conference Committee members
are:
Sen. Wesley Chesbro, Chair: (916) 651-
4002, Fax: (916) 323-6958
Sen. Dennis Hollingsworth: (916) 651-4036,
Fax: (916) 447-9008
Sen. Denise Moreno Ducheny: (916) 651-
4040, Fax: (916) 327-3522
Assemblymember John Laird: (916) 319-
2027, Fax: (916) 319-2127
Assemblymember Rick Keene: (916) 319-
2003, Fax: (916) 319-2103
Assemblymember Judy Chu: (916) 319-2049,
Fax: (916) 319-2149
Talking Points
Below are some talking points to use when
speaking with members of the Conference Com-
mittee:
• Cities and counties received $254 million
for fiscal year 2005-06 with the full funding of
Prop. 42. However, we are not slated to receive
any monies in FY 2006-07 and 2007-08, even if
Proposition 42 is fully funded. The early repay-
ment of $920 million as proposed by the Governor
and the Assembly will provide the only money for
local streets and roads for critical preservation
and storm damage projects.
• Cities can put this money to use immedi-
ately. It will enable us to continue repairing city
streets that are in disrepair, especially in light of
damage caused by recent storms.
• While SCA 7, if passed, will provide repay-
ment of borrowed Prop. 42 funds over 10 years, it
would be of greater benefit to make those repay-
ments now so that the money can be put to use
immediately. We pay now, or we pay much more
later to fix our streets and roads.
• Repayment of $920 million now will reduce
the state’s budget deficit and cut down interest
paid on continued debt.
• Even if the infrastructure bond package
passes in November, it is unclear when money will
actually start flowing. Providing payback of Prop.
42 funds now will ensure that cities have at least
some funding for the local road system.
?????? ?????????????????????????????????????????Visit the League’s Official Website--www.cacities.org PAGE 4 - PRIORITY FOCUS
June 2, 2006 - Issue #22
?????????????? ?????????????????????????????????
SB 1800 SB 1800 SB 1800 SB 1800 SB 1800 from page 1 from page 1 from page 1 from page 1 from page 1
Passage of SB 1800 would double the land
supply, which must be made available through the
controversial regional housing needs assessment
process (RHNA), and imposes many other restric-
tive requirements on local governments related to
planning and development approvals. The bill is
currently in the Senate Transportation and Housing
Committee.
Local governments and environmental groups
remain opposed to SB 1800. The author and the
bill’s homebuilder sponsors continue to pursue
rule waivers that would allow SB 1800 to be heard.
In addition, there is always the possibility of the
contents being dumped into another vehicle (bill)
later in the legislative session.
Among its many changes of concern, SB 1800
would:
• Expand the land supply for housing through
the RHNA process from a current five-year
allocation to a 10-year allocation, with
additional comprehensive planning required
for a 20-year period.
• Increase the scope review of local ele-
ments by the State Department of Housing
and Community Development to include
infrastructure planning, design guidelines,
property development standards, and the
goals and objectives of other elements of
the general plan.
• Require site-by-site reviews and exten-
sive planning and engineering to ensure
each residential parcel can be developed to
permit the maximum density allowed by the
density range.
• Require a market analysis of each site to
ensure that “market factors” will result in
development. (Many infill locations may not
meet these requirements as well as tradi-
tional greenfield developments.)
• Prohibit denial of a housing development
unless a stiff finding can be made accom-
panied by a four-fifths vote.
• Authorize fines of up to $10,000 per day
and the appointments of “special masters”
in communities that are unable to comply
with various requirements.
• Make numerous other changes which
diminish local land use authority.
Please have your city planner and attorney
review this legislation. Letters of opposition
continue to be encouraged. An expanded legal
analysis of the legislation prepared by the League
can be found by looking up SB 1800 using the
League’s bill search utility at www.cacities.org/
billsearch.
H.R. 5252 H.R. 5252 H.R. 5252 H.R. 5252 H.R. 5252 from page from page from page from page from page 2 2 2 2 2
????????? ????????????????
legislation unless it is amended to reflect our
concerns with rights-of-way and build out before
the bill goes to the floor for a vote.
Specifically, cities should ask their representa-
tive to:
• Support amendments that maintain
local government’s ability to enforce-
ment and resolve disputes over their
streets and rights-of-way.
• Support amendments that provide for
reasonable build out provisions.
• Oppose the bill if amendments are not
added that would address these
issues.
Visit (and bookmark!) the League’s
Legislative Resources page
(www.cacities.org/legresources). You’ll find
a roster and contact information for the
League’s legislative staff; the online Bill
Search program, background materials on
lobbying your legislators, and more.
FIND A BILL, LEGISLATORS, LEG FIND A BILL, LEGISLATORS, LEG FIND A BILL, LEGISLATORS, LEG FIND A BILL, LEGISLATORS, LEG FIND A BILL, LEGISLATORS, LEG
COMMITTEE - OR ASK LEG STAFF COMMITTEE - OR ASK LEG STAFF COMMITTEE - OR ASK LEG STAFF COMMITTEE - OR ASK LEG STAFF COMMITTEE - OR ASK LEG STAFFPRIORITY FOCUS - PAGE 5 Visit the League’s Official Website--www.cacities.org
June 2, 2006 - Issue #22
Continued on Page 6
Energy Deregulation Déjà vu! As the vote
was taken on the night of May 31, it brought back
memories from 10 years ago when electric
deregulation legislation was passed under very
similar circumstances. A small number of legisla-
tors, blessed by legislative leadership, convinced
virtually every member of the Legislature that
electric deregulation was the “right way to go.”
In that debate, the people of California were
promised competition and lower prices. Today,
AT&T and Verizon are promising competition and
lower prices for video services if AB 2987 is
passed. We all know what happened in 1996. Is
the Legislature forgetting the lesson it learned on
the electric deregulation debacle?
This is not the kind of bill that deserves 77
“YES” votes on the floor of the Assembly, much
less the majority needed for passage! While many
members have expressed concerns with the bill,
there was a rush to approve the Speaker-blessed
and -carried legislation.
SCHEDULE. So what’s next? The bill will be
heard in the Senate Energy, Utilities and Commu-
nications Committee. That committee is chaired
by Senator Martha Escutia. Members of the
committee also include Senators Alarcon, Battin,
Bowen, Cox (Vice-chair), Dunn, Dutton, Kehoe,
Murray and Simitian. While no date for a hearing
has been announced, it is likely that it will be heard
toward the end of June (possibly June 20). This
means that we have to take full advantage of
this time and make contacts with senators
immediately.
ACTION!! We CAN Do It! California cities
have already proven that when we act together,
we can change events in the State Capitol. Even
with the Assembly’s top-heavy vote – we CAN turn
this around. If you agree with this assessment of
the legislation, you need to take action on the
following items: (For sample letters and other
materials, visit www.cacities.org/ab2987.)
• Call Your Assemblymember. Please call
your Assemblymember and express how
disappointed you are with his or her vote.
Remember, the bill will have to come back
to the Assembly for concurrence in any
Senate amendments and there will likely
be many Senate amendments. Be sure
to thank Nation, Niello and Oropeza for
withholding their votes, if these are
your representatives!
• Call Your Senator. Immediately call your
Senator and tell him or her that it’s time to
save your city from the Assembly! Please
carefully outline the impacts on your
community and encourage the Senator not
to commit another electric deregulation
debacle.
• Call Local Press. Give your local newspa-
per, television or radio station a call and
point out the detrimental impact this bill will
have on your community. Remind them
that competition is good as long as it is
fair.
• Call Local Community Groups. The
League is working to build a coalition of
groups at the statewide level that can work
together with us to oppose AB 2987. You
can help, by talking to local community
groups that have an interest in this issue
and pointing out the problems with the bill.
Encourage them to join the “No on AB
2987” coalition.
Groups can include those interested in
digital divide issues and preventing dis-
crimination against lower income areas of
a community. Groups can also include
those with an interest in the public, educa-
tional and governmental channels, and
consumer protection.
• Check Out the League’s New AB 2987
Webpage (www.cacities.org/ab2987).
You’ll find a form to download and use to
AB 2987 AB 2987 AB 2987 AB 2987 AB 2987 from page 1 from page 1 from page 1 from page 1 from page 1
?????????????????? ????????????????????????????Visit the League’s Official Website--www.cacities.org PAGE 6 - PRIORITY FOCUS
June 2, 2006 - Issue #22
sign up to join the “No on AB 2987” coali-
tion, fact sheets, a statement of coalition
principles and other resources.
At the end of the day, we all want to achieve
expanded consumer choice and help lower
costs—not the illusion of reform or, worse still,
more expensive services and less choice. Let’s
take the time to do this right!
(See also, “What Will AB 2987 Mean for
Your City?”)
????? ???????????????????
AB 2987 AB 2987 AB 2987 AB 2987 AB 2987 from page 5 from page 5 from page 5 from page 5 from page 5
The May 26 amendments to AB 2987 only
address marginal concerns the League has
identified with the bill. The bill does little or nothing
to address the core issues for cities. This is
what the bill in its current form will do to your
city:
• Discriminatory. The bill permits video
service providers to pick and choose the areas in
a community that they will serve while ignoring
other neighborhoods. Cities support competition
services in telecommunications, but it has to be
FAIR TO ALL CALIFORNIANS! Under current
law, city officials decide the deployment of video
services and have a record with the cable indus-
try to prove that all areas of a community have
been served. Under this law, will AT&T and
Verizon be put in charge of protecting the
underserved?
• PEG Channels. Public access to broad-
casting is not protected. The bill fails to ad-
equately protect the community’s public, educa-
tion and governmental (PEG) channels. These
are important assets in a community that permit
the televising of community events, governmental
deliberations and educational opportunities. The
current language permits new video service
providers to ignore this commitment to the com-
munity.
• New State Bureaucracy Pre-empts
Local Franchises. The bill establishes a new
state bureaucracy that will grow to regulate what
are essentially local decisions about the deploy-
ment of new telecommunications services. In
short, the state is taking over local streets when it
comes to industries providing video services.
Have a problem on a local street? Go to Sacra-
mento and ask the state to correct it!
• State Takes Over Local Rights-of-Way.
This bill fails to adequately protect the taxpayers’
investment in public rights-of-way. New market
entrants, primarily telephone companies, want to
access local streets under rules they have
written.
• Revenue Loss. The local government
revenues from franchise fees are in jeopardy in the
current language in the bill. Serious legal flaws
remain. In its current form, the bill is a tax under
the constitution of the state. The language needs to
be amended to ensure that the traditional local
franchise fee for local government is maintained
and not taken over and pre-empted by the state tax
currently in the bill. Also, the bill narrows the
definition of “gross revenues” that is the basis for
calculating local government revenues, likely
resulting in a revenue loss.
WHAT WILL AB 2987 MEAN FOR YOUR CITY? WHAT WILL AB 2987 MEAN FOR YOUR CITY? WHAT WILL AB 2987 MEAN FOR YOUR CITY? WHAT WILL AB 2987 MEAN FOR YOUR CITY? WHAT WILL AB 2987 MEAN FOR YOUR CITY?
Stay Up-To-Date on Bills That
May Impact Your City
www.cacities.org/billsearch
Become a regular user of the League’s
online Legislative Tracking System. The
League’s website is your gateway to all the
information you need: bills sorted by subject
areas, showing the bill history, current
status, committee analyses, votes, and
much more. You can even view League
letters of support or opposition, and access
the League lobbyist working on the bill.PRIORITY FOCUS - PAGE 7 Visit the League’s Official Website--www.cacities.org
June 2, 2006 - Issue #22
ENVIRONMENTAL
AB 1899 (Wolk). Show Me the Flood Protec-
tion. The Assembly’s major flood protection bill, AB
1899, narrowly passed the Assembly this week. It
applies to areas within the Sacramento and San
Joaquin Rivers watershed.
Known as the “show me the flood protection”
bill, AB 1899 would establish a process to ensure
that new housing development that is not infill would
have verified 100-year flood protection before
being approved, and have a plan in place to
achieve 200-year protection within ten years. In the
interim, developers would be required to provide
home buyers notice that their home is at risk of
flooding and to provide flood insurance until the
200-year standard is reached.
The author has accepted numerous amend-
ments requested by the League and has committed
to working with interested stakeholders in the
Le Le Le Le Legisla gisla gisla gisla gislati ti ti ti tiv v v v ve Bill e Bill e Bill e Bill e Bill Action Action Action Action Action
The following are summaries of just a few of the legislative bills that are currently being acted upon
by the League of California Cities. For more information about these and other bills, please visit
the League website to access information about legislation, policy issues and related develop-
ments. You can track information on bills (www.cacities.org/billsearch), locate legislators and
legislative committees, send letters to legislators or the media through the online Advocacy Center
(www.cacities.org/advocacycenter), research League policy positions, access useful related
links, and much more.
Senate. While the League has no position on the
bill at this time, we have informed the author that
the basic issue that likely will determine the
League’s position will be the 200-year protection
standard.
The League has invited representatives from
cities impacted by this legislation to a meeting next
week to discuss the bill and to make a recommen-
dation on what position the League should take.
Representatives from the author’s office will attend
the meeting. Interested cities are encouraged to
review the newly amended version of the bill and
send their comments to the League and the author.
Staff: Yvonne Hunter; Status: Passed Assem-
bly; Pending in Senate; Position: Pending.
AB 3050 (Jones). Flood Control. Liability.
AB 3050 was not taken up by the author again this
week and thus the bill – but not the issue – is dead.
Continued on Page 8
Western City, the League’s monthly magazine,
recently won several awards. The magazine was
recognized by the International Association of
Business Communicators (IABC) Sacramento
Chapter, winning a Crystal Award for the Western
City Media Kit in the “Media Kit” category, and an
Award of Merit in the “Three-Color or More Maga-
zine” category.
In addition, the California Association of Public
Information Officers (CAPIO) awarded its highest
honor, the Award of Excellence, in its “Writing”
category to Western City for the article, “How the
WESTERN CITY WESTERN CITY WESTERN CITY WESTERN CITY WESTERN CITY MAGAZINE RECOGNIZED FOR EXCELLENCE IN COMMUNICATIONS MAGAZINE RECOGNIZED FOR EXCELLENCE IN COMMUNICATIONS MAGAZINE RECOGNIZED FOR EXCELLENCE IN COMMUNICATIONS MAGAZINE RECOGNIZED FOR EXCELLENCE IN COMMUNICATIONS MAGAZINE RECOGNIZED FOR EXCELLENCE IN COMMUNICATIONS
Telecommunications Revolution Will Affect Your
City.” The magazine also received an Award of
Merit from CAPIO for overall writing and design in
the “Special Publication” category.
Western City is an entirely self-supporting
project that is provided to League members as a
free membership benefit. It reaches more than
30,000 elected city officials and key staff. Subscrip-
tions are also available. To subscribe, visit
www.westerncity.com or call (916) 658-8223. For
advertising information, call (800) 262-1801 or visit
www.westerncity.com.Visit the League’s Official Website--www.cacities.org PAGE 8 - PRIORITY FOCUS
June 2, 2006 - Issue #22
Le Le Le Le Legisla gisla gisla gisla gislati ti ti ti tiv v v v ve Bill e Bill e Bill e Bill e Bill Action Action Action Action Action
AB 3050 would make cities and counties share in
the state’s liability for damages due to flooding for
areas that were once either open space or agricul-
tural land, but were rezoned for residential develop-
ment.
As a result of a court case (the 2003 Paterno v.
State of California decision, which held the state
responsible for paying nearly $500 million in dam-
ages for flooding caused by a breach in a levee for
which the state had responsibility), the state is
attempting to find ways to share its liability. It is
under the misguided perception that cities and
counties that approve housing development in
ways that are consistent with existing state and
federal law should somehow also liable be for
damages, even if the city or county does not own,
operate or have any other responsibility for the
levee.
Interestingly, AB 3050 was amended this week
to add the following statement: “Nothing in this
subdivision shall be construed to prevent a local
public entity from approving new housing develop-
ments in a previously undeveloped area.” “Noth-
ing,” perhaps, except the threat of a lawsuit and
financial exposure. Remember, while the bill may
be dead, the issue of requiring cities and counties
to share in the liability is very much alive.
Staff: Yvonne Hunter; Status: Failed in Assem-
bly; Position: Oppose.
AB 2951 (Goldberg). Municipal Utilities.
Capital Facilities Fees. AB 2951 passed the
Assembly this week. It would clarify existing law
regarding capital facilities fees for municipal water,
electric and waste water utilities and whether such
fees apply to other public agencies. AB 2951 is
drafted to protect all rate payers and would prevent
cost-shifting in monthly rates from public agencies
to residential and commercial customers. AB 2951
is the third attempt by Assemblymember Goldberg
to address this topic.
The League appreciates her willingness to
tackle this complicated subject and her leadership.
Cities with any type of municipal utility should be
sure to send letters of support to the author, their
Senator and to the Senate Local Government
Committee. Detailed information AB 2951 is avail-
able on the League’s website.
Staff: Yvonne Hunter; Status: Pending in
SenLGov; Position: Support.
ADMINISTRATIVE SERVICES
SB 1179 (Morrow). Skateboarding. City
Liability. SB 1179 passed the Senate unanimously
this week with no opposition. As amended, it would
change the age threshold from age 14 to age 12
that provides limited immunity to public agencies for
injuries to skateboarders performing a trick, stunt
or luge in a skatepark.
It would also extend the sunset date for this
limited liability by four years – from 2008 to 2012.
Since the Consumer Attorneys of California (the
Trial Lawyers) have removed their opposition and
are now neutral, it appears that SB 1179 will move
along smoothly. Cities with skateparks should
send letters of support to the author, their assembly
members and members of the Assembly Judiciary
Committee.
Staff: Yvonne Hunter; Status: Pending in
AsmJud; Position: Support.
WANT TO SEND A LETTER IN WANT TO SEND A LETTER IN WANT TO SEND A LETTER IN WANT TO SEND A LETTER IN WANT TO SEND A LETTER IN
SUPPORT OF A LEAGUE POSITION? SUPPORT OF A LEAGUE POSITION? SUPPORT OF A LEAGUE POSITION? SUPPORT OF A LEAGUE POSITION? SUPPORT OF A LEAGUE POSITION?
HERE’S WHO TO CALL: HERE’S WHO TO CALL: HERE’S WHO TO CALL: HERE’S WHO TO CALL: HERE’S WHO TO CALL:
ASSEMBLY JUDICIARY—(9)—Jones
(Chair), Harman (Vice Chair), Evans, Haynes,
Laird, Leslie, Levine, Lieber, and Montañez.
Chief Counsel: Drew Liebert. Counsel: Kevin
Baker, Leora Gershenzon, Manuel Valencia,
Tom Clark. Secretaries: Cindy Fischer, Saba
Hashmat. 1020 N Street, Room 104. Phone:
(916) 319–2334.
SENATE LOCAL GOVERNMENT—(5)—
Kehoe (Chair), Cox (Vice–Chair), Ackerman,
Machado, and Torlakson. Consultants: Peter
Detwiler and Brian Weinberger. Assistant: Elvia
Diaz. Phone: (916) 651–4115. Room: 410.