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LEGISLATION AND LEAGUE OF CALIFORNIA CITIES PRIORITY FOCUS Issue # 23 dated June 10, 2005.
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PRIORITY
FOCUS
Anal ysis, Corrmentary and Upoates on Legislative aid Polic y IssLes that Affect California Cities
June 10, 2005
Issue #23-2005
BUDGET UPDATE
The Budget Conference Committee is close to completing its work and
may shut down today At press time there had been no action to resolve the
difference between the Senate and Assembly on the $593 4 million appropria-
tion proposed by Gov Schwarzenegger and adopted in the Senate to provide
early repayment of about half of the $1 1 billion vehicle license fee (VLF) gap
loan that the state took from cities and counties in 2003 The Assembly did
not take this item up in the budget subcommittee which placed the item in
conference For more see Page 8
LOCAL OFFICIALS CONTINUE THE PUSH
FOR FULL PROP 42 FUNDING
City and county officials in San Diego Santa Barbara Modesto and
Monterey held press conferences with business and labor representatives
and other LOCAL ( Leave Our Community Assets Local ) Coalition partners
this week stressing the importance of preserving full funding of Proposition
42 transportation projects in the FY 2005-06 state budget For more see
Page 5
TELECOMMUNICATIONS REGULATORY CHANGES
IN CALIFORNIA'S FUTURE
Local regulation of telecommunications providers is about to face a major
change
This change is going to occur and arguably needs to occur because of
the phenomenal technological advances in the communications industry that
provides video voice and data services to our local communities In turn this
technological revolution is going to change the manner in which local commu-
nities regulate these services For more see Page 6
WANT MORE DETAILS
ON BILLS?
Visit the League of
California Cities
website at
www cactes org/
billsearch
IN THIS ISSUE:
Page 2
Page 3
Page 4
LEAGUE CLARIFIES SPENDING CAP INITIATIVE
• INTERESTED IN SERVING ON THE LEAGUE BOARD OF DIRECTORS?
U S SUPREME COURT JUST SAYS NO
• POLLING AND PUBLIC OPINION—A ONE TO ONE RELATIONSHIP?
LEGISLATIVE BILL SUMMARIESLEAGUE CLARIFIES REVIEW PROCESS ON PROPOSED SPENDING CAP INITIATIVE
League Executive Director Chris McKenzie
distributed a memo this week to all cities to clarify
that the League has not yet taken a position on
Gov Arnold Schwarzenegger s proposed spend-
ing cap initiative known as Live Within Your
Means
The memo was distributed following publica-
tion of a Los Angeles Times article entitled Cities
and Counties Balk at Plan for State Spending
Cap which stated that cities and counties have
serious concerns with the measure
The measure has not yet qualified for the
ballot Assuming that it does qualify it is expected
to be placed on the November 8 ballot - if the
governor calls a special election for this fall
County officials are quoted in the story but no
League representative or city official was quoted
as expressing concerns
We anticipated that the story might lead to
city officials being asked about the measure by
their own local media said McKenzie We
thought it would be helpful if city officials had
information on where the League was in analyzing
the proposal
The memo made the following points about
the measure and the League s review process
• The League the California State Associa-
tion of Counties and the LOCAL Coalition have
not taken positions on the Live Within Our Means
Act
• League attorneys our fiscal consultant and
other experts are carefully reviewing this initiative
and we re working with the various parties involved
to get answers to some questions and policy
issues We will not take a position until their
analysis is complete and after we have taken this
item through the League s policy process the
Revenue and Taxation Policy Committee for
recommendation and subsequently the board of
directors for its review of the policy committee
position and adoption of a final position We
cannot predict what our position will be on the
measure until this process runs its course
• Our analysis thus far has indicated that the
spending cap measure does not affect local Prop
172 funding (sales tax for public safety) We also
support provisions that would prevent the Legisla-
ture in future years from transferring Prop 42
funds (sales tax on gasoline) to the state general
fund — and away from transportation projects
including funds to cities and counties for local
street and road maintenance projects
• Gov Schwarzenegger has been a great
ally of local government in both the recent past
and in the present He helped push through the
historic landslide passage of Proposition 1A and
his May Budget Revise proposal (to fully fund Prop
42 and provide early repayment of half of the 2003
vehicle license fee loan) also reflects his commit-
ment to local governments and local services
We value this partnership and the governor's
ongoing support for local services
INTERESTED IN SERVING ON THE
LEAGUE BOARD OF DIRECTORS?
The League of California Cities welcomes
nominations from elected officials interested in
serving in five at-large positions (two-year term)
or Second Vice President (one-year term) All
nominees for Second Vice President must cur-
rently be serving or have previously served on the
board of directors
If you are interested in submitting your name
(or another elected official s name) for nomination
to the League board of directors please provide
the information requested on the Nomination
Form along with a bio and letter requesting
consideration to the League s Sacramento
headquarters on or before end of business on
Friday, July 8, 2005 Nomination materials can
be found on the League s Website at
wvvw cacities org in the board of directors sec-
tion or can be obtained by contacting League staff
member Mimi Sharpe at (916) 658 8232 or
sharpem©cacities org
PAGE 2/PRIORITY FOCUS Visit the League's Official Website www cacities orgU S SUPREME COURT JUST SAYS 'NO'
On June 6 2005 the United States Supreme
Court handed down its long-awaited decision in
Gonzales v Raich The Court held that those
using marijuana for medicinal purposes could be
prosecuted for violating federal drug laws While
expressing sympathy for the two seriously ill
California women who brought the lawsuit the
Court found that Congress has the authority to
prohibit the local cultivation and use of marijuana
California s Compassionate Use Act authorizes
limited marijuana use for medicinal purposes
After federal agents seized and destroyed all six of
Diane Monson s plants she and Angel Raich
brought an action seeking to prohibit the enforce
ment of the federal Controlled Substances Act to
the extent that it interfered with their use of man
Juana under California law Essentially they
argued that a locally grown product that is used
domestically rather than sold on the open market
is not subject to federal regulation
The Ninth Circuit Court of Appeals sided with
the women finding that Congress lacked the
power to regulate the intrastate noncommercial
cultivation and possession of marijuana pursuant
to valid California law But the Supreme Court
disagreed
In its 6-3 opinion the Court reiterated that
Congress has the power to regulate purely local
activities that are part of an economic class of
activities that have a substantial effect on inter
state commerce Congress may constitutionally
regulate the local production of marijuana be-
cause such production has a substantial effect on
the supply and demand for marijuana in the
national market Because of enforcement difficul
ties in distinguishing between locally grown man
Juana and that grown elsewhere along with con
cerns about diversion to illicit markets Congress
had a rational basis in believing that local regula
ton was an essential part of the larger regulatory
scheme set out in the Controlled Substances Act
In her dissent Justice Sandra Day 0 Connor
joined by Chief Justice William Rehnquist and
Justice Clarence Thomas stated that the Court
was overreaching in making it a federal crime to
grow small amounts of marijuana in one s home for
one s own medicinal use Justice Thomas added
that the majority s ruling was so broad the federal
government may now regulate quilting bees
clothes drives and potluck suppers throughout the
50 states
POLLING AND PUBLIC OPINION-A ONE-
TO-ONE RELATIONSHIP?
Public officials frequently look to public opin
ion polls as a reliable indicator of public senti-
ment But is it reliable'? Under what circum-
stances could polls be misleading'?
Come find out at the Institute for Local
Government s first ever luncheon symposium at
the upcoming League Annual Conference This
years symposium will feature Daniel
Yankelovich a leading interpreter of trends
shaping American society Mr Yankelovich is the
author of 10 books including Coming to Public
Judgment New Rules and The Magic of Dia-
logue Transforming Conflict into Cooperation
To learn more about Mr Yankelovich check out
his interview with Bill Moyers at www pbs org/
now/transcnpt/transcnpt_yankelovich html
The symposium will be from 12 30 p m to 2
p m on Thursday, October 6 at the Moscone
Convention Center West in San Francisco The
fee for attending this event is $40 which covers
the cost of the lunch For information about
buying a table for eight go to wvvw ilsg org/
symposium Your attendance also shows your
support for the Institute s work in service to local
officials in the areas of ethics civic engagement
fiscal stewardship and housing/land use League
alumni (former city officials) are invited as well,
To sign up visit www mates org/ac and
either check the ILG Luncheon box on the
regular League annual conference registration
form or take advantage of the online registration
process Please note that you do not have to
attend the entire conference to attend in this
event
Visit the League's Official Website www cacities org PRIORITY FOCUS/PAGE 3Legislative Bill 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
ENVIRONMENTAL
AB 771 (Saldana) Coastal Commission
Ex Parte Communication In its previous
version AB 771 would have prohibited virtually all
ex parte communication with members of the
Coastal Commission While the League ob-
served that this would prevent important two-way
communication with coastal commissioners
outside a public commission meeting the
author's office observed that the bill is in re-
sponse to alleged serious violations by coastal
commissioners of ex parte laws
As amended on June 2 AB 771 would in-
crease the penalty imposed on coastal commis
sioners for knowingly violating the ex parte laws
from $7 500 to $25 000 The authors office
indicates that they will be amending the bill in the
Senate to strengthen the notice provisions
related to disclosing ex parte communications
Staff Yvonne Hunter, Status Pending in
the Assembly, Position Neutral
SB 1059 (Escutia) Transmission Corridor
Zones Land Use Preemption In last weeks
Priority Focus we provided information on the
Senate Floor vote on SB 1059 which would
authorize the California Energy Commission to
designate transmission corridor zones and
override local land use authority of local govern
ments The actual final vote was 34-1 not 32-0
as we reported The lone No vote was cast by
Senator Dennis Hollingsworth The League
thanks Senator Hollingsworth for his vote
City officials are reminded that SB 1059 contin-
ues to move forward without any substantive
amendments to address the serious problems it
presents Cities are encouraged to send letters of
opposition unless amended to the Assembly Utilities
and Commerce Committee as well as to the
Assembly Local Government Committee which
has requested a hearing on the bill as well Staff
Yvonne Hunter, Status Pending in Assembly
Utilities and Commerce and Assembly Local
Government Committee (tentative), Position
Oppose Unless Amended
WANT TO SEND A LETTER IN SUPPORT
OF A LEAGUE POSITION ? HERE'S WHO
TO CALL
ASSEMBLY LOCAL GOVERNMENT (7)—
Salinas (Chair) Emmerson (Vice Chair) De La
Torre Houston Lieber Nation and Wolk 1020 N
Street Room 157 Phone (916) 319-3958
ASSEMBLY UTILITIES AND COMMERCE
(11)—Levine (Chair) Bogh (Vice–Chair) Baca
Blakeslee Cohn De La Torre J Horton Keene
Montaiiez Ridley–Thomas and Wyland Room
5136 Phone (916) 319-2083
Visit the League's Official Website www cacities org
PAGE 4/PRIORITY FOCUSSan Diego County Supervisor Ron Roberts along with
city officials and business leaders address the media
regarding their support for full restoration of Prop 42
transportation funds
PROP 42 from page 1
Mayors councilmembers and other local
officials spoke about transportation problems in
their respective cities ranging from road conditions
to traffic congestion and how restoration of Prop
42 funds would im
prove their communi-
ties
In San Diego
Stephen Finnegan the
Automobile Club of
Southern California s
manager for transpor-
tation policy analysis
and advocacy re-
vealed that a recent
federal study of the
nation s roads and
highways showed that
80 percent of the
roads in San Diego
County are in poor or
mediocre condition
If those roads
continue to deteriorate the cost of repairing them
goes up exponentially so in the end we will all
save dollars if we can use the money now he
said
Brad Barnum of the San Diego Regional
Chamber of Commerce agreed adding that a
reduction in traffic problems will also help bolster
the area economically
Less traffic congestion makes San Diego
more attractive to potential businesses and
employees he explained But we need adequate
transportation infrastructure to support a growing
population
City spokespersons at the press conferences
included Modesto Mayor Jim Ridenour and Turlock
Councilmember Billy Wallen at the Modesto press
conference the Mayor of Lemon Grove Mary
Sessom at the San Diego press conference
Seaside Mayor Ralph Rubio at the Monterey press
conference and Santa Barbara Councilmember
Roger Horton and Buellton Mayor Russ Hicks at
the Santa Barbara conference Thanks to all
these city officials for their help in getting the word
out about the importance of fully funding Prop 421
The Road Information
Program (TRIP) Report
released just over two
weeks ago reported that
five out of the top-10
worst metropolitan areas
are located in California —
illustrating the impact that
lack of adequate funding
for transportation im-
provements is having on
California s roadway
system
The press confer-
ences generated media
coverage from most
major outlets including
local ABC NBC CBS
and Univision television
of print newspaper and
The most recent statewide survey of city and
county needs for the local transportation system
was from the SR 8 (Burton) report in 1999 The
report found a backlog of $11 billion in needed
repairs — which due to maintenance deferrals is
estimated at approximately $13 billion today
Gov Schwarzenegger s May Revise budget
proposed full Prop 42 funding ($1 3 billion) for
transportation projects including funds including
$381 million that will go to local governments for
street road and transit projects Both the Assem-
bly and Senate budget subcommittees adopted
the governor's proposal However there are still
major differences on the budget between the
Democratic legislative leadership and the adminis-
tration While discussions ensue on these issues
city officials and their LOCAL partners believe that
it is imperative that legislators pass a budget that
includes full funding of Prop 42
affiliates and a variety
radio reporters
Visit the League s Official Website www cacities org PRIORITY FOCUS/PAGE 5TELECOM from page 1
City officials need to be ready for the change
The technological advances will potentially have
major implications for city revenues local authority
over these services and economic development
Telecommunications infrastructure is about to
become just as important as the infrastructure
provided for water sewer transportation and other
public facilities in the community
Background
Currently local governments are given authority
to regulate utilities that use city rights-of-way to
construct their infrastructure This includes most
utilities that deliver services to city residents such
as water electrical and cable television services
that are regulated through a franchise process
Telephone companies have traditionally been
outside of the city franchise process But armed
with business plans to develop the infrastructure to
provide video services telephone companies are
now poised to deliver a service that looks a lot like
the video services traditionally provided by cable
television companies Further complicating the
picture cable television companies are beginning
to provide the telephone services traditionally
provided by telephone companies and electrical
companies are assessing the opportunities for their
entry into this exploding communications market
Congress, California Legislature Debate Regu-
latory Issues
With all of these changes Congress is ex-
pected to begin debates as early as this fall and
into next year over a major rewrite of the 1996
Telecommunications Act This act defines the
authority and conditions under which local commu-
nities currently regulate the cable television Indus
try
This debate by Congress will undoubtedly have
implications for how cities regulate the communica
bons industry in California Meanwhile the debate
over a new regulatory scheme for California is
beginning to heat up as we move into the sum-
mer months of the legislative session
The debate in California started with a nar-
rower attempt by a member of the telephone
industry to change certain regulatory practices
Lloyd Levine chairman Assembly Public Utilities
Committee thought it was best to abandon this
narrow fix approach in favor of a broader discus-
sion about updating the state s current regulatory
scheme to better match the revolutionary
changes in communications technology
For the past three to four weeks
Assemblymember Levine has conducted work-
shops for interested parties under the
committee s direction The League has been a
participant in those meetings along with the cable
television industry the telephone companies
consumer groups and non profit organizations
seeking balanced and non discriminatory deploy-
ment of communications services Essentially all
interested parties are present in these discus-
sions
After the most recent workshop city repre-
sentatives were asked to meet with the chairman
and staff to talk about specific city issues in
these discussions The meeting was productive
in its exchange of ideas The League s Telecom
munication Subcommittee is working on fine-
tuning a policy document for the League League
policy committees will debate this in June while
the League Board will address the issue in July
Emerging Issues
After the working group under the Assembly
Public Utilities Committee met a number of
times some key questions emerged in the
discussions These questions promise to be a
part of a draft proposal that is likely to be circu-
lated in a couple of weeks Those key questions
include
Continued on Page 7
Visit the League s Official Website www cacities org
PAGE 6/PRIORITY FOCUSTELECOM from page 6 —
• • • • • • • • • • • •
o State Parameters for Local Franchises
One of the communications industry concerns
can be described in general as uniformity The
argument is that the more uniform the franchise
process is the better it is for industry It is a point
that is consistent with the industry goal of speed
to market The contention is that the faster the
industry gets to market the more sound the
industry business plan will be This issue has
both pros and cons from a local government
perspective It runs the potential of being preemp-
tory of local authority over the local franchise
process On the other hand it may speed nego
tiations which can easily become prolonged on
certain regulatory issues As with any legislation
the details are important in how this issue devel-
ops
o Local Franchise Fees
Local governments can currently collect a
franchise fee from most utilities It is a substantial
amount of money on a statewide basis Industry
is raising the same uniformity issues when it
comes to fees The argument is that it would be
easier to collect a fee at the state level and remit it
back to local government The local governments
experience with state collected and remitted fees/
taxes (remember Vehicle License Fees ?) is not a
good one Is there a compromise position on this
issue? Will a franchise fee or some other fee
apply to what are now the traditional telephone
companies'?
o Public, Education and Government
Channels (PEG)
The requirement of PEG channels for the
community is a critical concern to many commu-
nities and is one of the more difficult issues in
local franchise negotiations Sentiment in the
legislature is strong that PEG channels are
needed the questions become how much and
under what conditions'? Is there a way to place a
portion of the PEG requirements in state law but
allow local flexibility in negotiations'?
o Build-Out of Communications Systems
A key issue again with good support in the
legislature is the need to build out the communi-
cations infrastructure in a manner that does not
discriminate against one portion of the community
over another This is a consideration at the city
level as well as at a statewide or regional level
Politics/Timing
The politics of communications regulation or
re regulation are going to be complex The
industries are in a highly competitive environment
where time is an important element both to those
industry members who want to rush to market
and those who see delay as being on their side
Whatever the particular industry strategy the
regulation of the communications industry is going
to change
There has already been one very visible battle
in the Texas Legislature this year Two large phone
companies tried to bypass the local franchise
process through legislation pointing to the speed-
to-market issue The effort failed in a hard fought
battle where the cable industry lined up with local
governments to oppose the measure In New
Jersey a similar battle is shaping up in that
legislature
Chairman Levine has stated his intent to
produce a proposal for consideration of the
legislature during this session This means that a
proposal should begin to take a more definite
shape in the July/August timeframe State budget
negotiations will likely play into the timing for
development of the proposal
The chairman has indicated that local govern-
ment and some of the industry will not like the first
draft but has asked that all parties of interest stay
calm and continue to participate in the negotia-
tions The League has indicated to Chairman
Levine that we intend to engage in a fairly aggres-
Continued on Page 8
Visit the League's Official Website www cacities org PRIORITY FOCUS/PAGE 7BUDGET UPDATE from page 1 The League and city officials continued to work
this week with their LOCAL coalition partners to
stress to local media and their legislators the
importance of preserving full funding of Proposi-
tion 42 for transportation projects including local
street and road maintenance funding (see Local
Officials Continue the Push for Full Prop 42
Funding ) Both the Senate and the Assembly
budget committees have approved this item as
proposed in the governor s May Revise
We will post updated information on Budget
Conference Committee actions on the League s
website (www mates orq) as soon as informa-
tion is available
2005 ANNUAL CONFERENCE
OCTOBER 6-8, MOSCONE
CONVENTION CENTER,
SAN FRANCISCO
Participate in this important gathering of
several thousand California city officials
as they set policies, expand their knowl-
edge and sharpen their skills to better
serve their cities
Plan now to attend the 2005 Annual
Conference this fall - the first time it has
been in San Francisco since 1997
Make you reservations through our
online system at www cacities org/ac
TELECOM from page 7 sive education process for our members to try
and bring them up to speed as quickly as possible
on a complex subject
Meanwhile Congress continues to prepare for
its upcoming debates on this issue If California
can construct a regulatory scheme that makes
sense for the state it may play well in the con-
gressional debates on the issue On the other
hand Congress could exercise its authority to
entirely preempt state and local laws in this field
However it is too early to get any clear direction
on the intent of Congress
Action
The League strongly encourages cities to
begin to raise this issue on your local radar
screens This could be a major end-of-the-
session debate Begin the preparations needed to
deliver the message on the importance of local
authority over this emerging regulatory issue
including the importance of the revenues from
franchises for local municipal services
When the draft legislation emerges the
League will attempt to get the language into your
hands at city hall as soon as possible in order for
you to make a thorough analysis of its potential
impact Please put this on your schedule to
expect the language in late June and take the
opportunity to thoroughly examine the proposal
locally
The League plans to schedule conference call
information meetings for city officials once the
legislation begins to emerge Please look for
notices as to days and times for the conference
calls
PAGE 8/PRIORITY FOCUS
Visit the League s Official Website www cacities org