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Home My WebLink About12/06/96 BAKERSFIELD MEMORANDUM December 6, 1996 TO: HONORABLE MAYOR AND CITY C~OL~CIL SUBJECT: GENERAL INFORMATION f / \ 1. A committee has been formed to participate in the design of the Centennial Plaza Park. It is comprised of staff from Public Works and Economic and Community Development, as well as members of the community including water theme, history, and art representatives. 2. A report is enclosed from EDCD regarding current revenue distributions on new redevelopment projects is enclosed. 3. Mandatory refuse collection in County areas will be considered by the Board of Supervisors on December 17th. The service level and price have not been defined yet, so referral back to staff seems likely. The prospects for the transportation fees to pass there are brighter, we are told. 4. Several weeks ago we reported that the County had decided not to pursue two railroad grade separation projects on 7th Standard Road and Calloway Drive. The Board of Supervisors reversed County staffs recommendation and have approved the necessary Phase I studies for both locations. 5. As mentioned in the last Panorama landfill status report we gave you, the gas condensate well appears to be free of any groundwater contaminants. Correspondence regarding those results is enclosed from the California Regional Water Quality Control Board. 6. A memorandum from Public Works regarding the anti-graffiti billboards that will be placed throughout the City is enclosed. A copy of the billboard design is included. 7. There is a memo enclosed on another proposed CBDG amendment which would deal with requests for more first time homebuyers' money and money to create a redevelopment agency in the southeast. It needs to go to the Budget & Finance Committee to start deliberations. Honorable Mayor and City Council December 6, 1996 Page 2 8. We have agreed to provide office space for the employee of the Centennial Foundation. It is in the Risk Management area. 9. An updated and more extensive study on arena costs/revenues is enclosed. It would appear that a conservative estimate would put a cost over revenue projection annually at $300,000. We would hope to do better, as several of the "comparables" do, but that number should be safe. 10. Responses to Council referrals are enclosed, as follows: · request regarding removal of warning sign adjacent to 3512 LaCosta St.; · stop sign request at 8th and T Streets. AT:rs cc: Department Heads Pamela McCarthy, Acting City Clerk Trudy Slater, Administrative Analyst BAKERSFIELD PUBLIC WORKS DEPARTMENT MEMORANDUM TO: ALAN TANDY, CITY MANAGER FROM: RAUL M. ROJAS, PUBLIC WORKS DIRECTOR~ DATE: NOVEMBER 26, 1996 REF: CENTENNIAL PLAZA PARK COMMITTEE The following people have agreed to participate on the above referenced committee: 1. Dave Milazzo - Architect 2. Shirlyn Davenport - Historic Preservation Committee 3. Chris Frank - Chamber of Commerce 4. George Gonzales - Community Development 5. DeWayne Starnes - Public Works 6. Don Hoggatt - Public Works 7. Tom Heath - President, Bakersfield Art Foundation We will proceed with establishing our first meeting date with your approval of the above committee members. Please let me know if there is anyone else you feel should be involved with this process. pc: Jacques LaRochelle File - !'.--,9 P:WIEMO$ RAUL37 OEO 2 r' BAKERSFIELD Economic and Community Development Department MEMO UM December 4, 1996 TO: AlanTandy, City Manager ~ ~ FROM: Jake Wager, Economic Develb,pmen~ Director SUBJECT: Redevelopment AB 1290 Increment Requirements ~ AB1290 Increment Requirements Prior to January 1, 1994 redevelopment agencies were required to notify affected taxing entities of the intent to establish a redevelopment project area. If as a result of the fiscal review a conclusion was reached that the redevelopment plan would cause fiscal burden then the redevelopment agency would negotiate separately with each taxing entity as to what portion of the tax increment they would receive. The affected taxing entities were then authorized to call for the formation of fiscal review committees and negotiate agreements under which redevelopment agencies could pay a taxing entity a portion of tax increment to alleviate a financial burden or detriment caused by the establishment of a project area. In addition to any negotiated tax increment agreement, affected taxing entities were also given the right to receive their share of revenues produced by the 2 percent inflation adjustment to the base year assessed value allowed by Proposition 13. AB1290 eliminates fiscal review committees, negotiated agreements and the 2 percent payments. Instead, it directs agencies to pay affected taxing entities specified amounts at specific times during the life of the plan. Agencies are still required to consult with each taxing entity, but tax sharing negotiations are not a part of the process. Payments are allocated among the taxing entities in proportion to the percentage share of the property taxes each affected taxing entity receives during the fiscal year the funds are allocated. (In other words, if the percentage shares of the taxing entities are changed in any given year, the payments are adjusted in accordance with the changes in percentage.) The amounts to be paid to the affected taxing entities, except basic aid school districts, are as follows: · From the fa'st fiscal year in which the agency receives tax increment until the last fiscal year in which the agency receives increments, 25 percent of the tax increment received by the agency after deducting the amount required to be deposited into the Low and Moderate Income Housing Fund (20 percent). Years I - 10 [] Redevelopment Agency []' Affected Taxing Agencies [] Housing Setaside · From the eleventh fiscal year in which the agency receives tax increment until the last fiscal year in which the agency receives tax increments ( in addition to the amount paid under the preceding paragraph, and after deducting the amount allocated to the Low and Moderate Housing Fund), 21 percent of the portion of tax increments received by the agency, which is calculated by applying the tax rate against the amount of assessed adjusted base year assessed value. The first adjusted base year assessed value is the value of the project area in the tenth fiscal year in which the agency receives tax increment. Years 11-30 20% I [] Affected Taxing Agencies Redevelopment Agency [] Affected Taxing Agencies [] Housing Setaside · From the thirty-first year in which the agency receives tax increments until the last fiscal year in which it receives increments (in addition to the amounts paid under the preceding two paragraphs and after deducting the amount allocated to the Low and Moderate Income Housing Fund), 14 percent of the portion of tax increments the agency receives, which is calculated by applying the tax rate against the amount of assessed value by which the current year assessed value exceeds the second adjusted base year value. The second adjusted base year assessed value is the value of the project area in the thirtieth fiscal year in which the agency receives tax increment. Years 30 - ? 20% Affected Taxing Agencies Redevelopment Agency Affected Taxing Agencies Housing Setaside The additional payments which begin in the eleventh and thirty-first years described above are calculated against artificially created base years so that in the year increased payments begin, the amount of tax increment received by an agency and available for its use is not lower than the amount received during the prior year. The mechanism should assist agencies in selling bOnds. The community which adopted the redevelopment plan may elect to receive an amount equal to 25 percent of the tax increments received by the agency in any fiscal year that the agency receives tax increment. However, the community is not entitled to share in the two increases paid to other affected taxing entities commencing in the llth and 31st fiscal years. If the community elects not to receive this payment, the funds not allocated to the community are allocated to the agency and not the other taxing entities. The agency's Housing Fund set-aside obligation remains equal to 20% of the gross tax increment revenue allocated to the agency, and is not affected by the AB1290 statutory pass-through payments. Thus each year the agency receives tax increment, the agency must pay the affected taxing entities 25 % of the net tax increment. In addition to this payment, beginning in the eleventh fiscal year that the agency receives tax increment and continuing so long as the agency receives tax increment, the agency is required to pay affected taxing agencies 21 percent of the net tax increment generated by increases in the project area assessed value. In addition to these payments, beginning in the thirty-first fiscal year that the agency receives tax increment and continuing so long as the agency receives tax increment, the agency will be required to pay the affected taxing agencies 14 percent of the net tax increment generated by increases in the project area assessed value. An agency may subordinate its payments to the taxing entities to loans, bonds or other indebtedness (except loans or advances from the community) upon obtaining the approval of the affected taxing entities. The agency must provide the taxing entity with substantial evidence that it will have sufficient funds to pay both the debt service and the amount reqUired to be paid to the taxing entity. Shobi Khan of the f'u'm Katz Hollis said that due to the adoption of AB1290 it was believed that the creation, amendment or merger of redevelopment project areas would slow down. However, a slow down has not occurred and, instead, project area activities have increased. The firm is currently working on redevelopment project areas in Sacramento, San Bernardino, Seaside, Redding, Halfmoon Bay, Commerce, Los Angeles, and Ventura. According to Mr. Khan, reactions from affected taxing entities to the AB1290 tax sharing apportionment has been neutral, because the formula is set and there are no negotiations. He recommends maintaining a good relationship with the taxing entities and keeping them apprised of the project adoption process. His suggestion was to get taxing entities involved early in the process and to provide as much information as necessary concerning the agency's plans for the redevelopment project. We surveyed several California redevelopment agencies about their experiences with the new AB1290 tax sharing formula. Comments received varied from the project areas being too new and not having collected enough tax increment to get an accurate reaction from the tax entities; to the process went very smoothly since there was nothing to negotiate; and suggestions to establish a positive relationship with taxing entities to promote favorable alliances. In conclusion, it appears that while taxing entities may not agree with AB1290 tax apportionment, statutory pass-throughs do not allow for negotiations. Taxing entities are entitled only to their designated percentage of generated tax increment. Developing a positive relationship with the taxing entities was emphasized as an important aspect of creating a new project area. dlt:P:\JWS\AB 1290.MEM · _ BAKERSFIELD PUBLIC WORKS DEPARTMENT MEMORANDUM TO: Alan Tandy, City Manager FROM: Raul Rojas, Public Works Director ~ DATE: December 3, 1996 SUBJECT: MANDATORY REFUSE COLLECTION IN COUNTY AREAS County Waste Management staff has informed us that a proposal for mandatory collection will be considered December 17 at the Board of Supervisors. The service level and price have yet to be defined, and thus the proposal will be to endorse the concept only. Since the Board will change members after that meeting, it is anybody's guess whether mandatory collection will be approved next year. ,~ KB:stop S:\WPDATA\KC_IVlNCOL.MEM ~Eg -- 3 IgO-J6 } PUBLIC WORKS DEPARTMENT MEMORANDUM DATE: NOVEMBER 27, 1996 TO: ALAN TANDY, CITY MANAGER FROM: RAUL M. ROJAS, PUBLIC WORKS DIRECTOR~'~'~'Ln--.-~ SUBJECT: CALLOWAY DRIVE GRADE SEPARATION Good news! The County Board of Supervisor's reversed staff's recommendation and approved the necessary "Phase 1" studies for both the Seventh Standard Road @ Southern Pacific and Calloway Drive @ Sante Fe grade separations. It appears the letter by the Mayor was helpful in making this decision. cc Jack LaRochelle :"--:~- ~'~ ::i OEO - STATE OF CALIFORNIA - Environmental Protection Agency PETE VV1LSON, Governor CALIFORNIA REGIONAL WATER QUALITY CONTROL BOARD CENTRAL VALLEY REGION .~_~._ 3614 East Ashlan Ave. Fresno, CA 93726 PHONE: (209) 445-5116 F~x: (209),~5-59~0 18 November 1996 Mr. Kevin Barnes Solid Waste Director -Ci~ of Bakersfield Public_Works Dep .artm_ e_m 4101 Truxtun Avenue Bakersfield? CA 93309 ASSESSMENT OF LANDFILL GAS CONDENSATE DISCHARGE AT THE CITY OF BAKERSFIELD SANITARY LANDFILL, KERN COUNTY We have reviewed the subject report submitted on your behalf by Kleinfelder. Our comments are contained in the enclosed memorandum. Based upon the results of the assessment, condensate previously discharged to the gravel-packed column appears to have left no residual waste constituents that pose a threat to groundwater quality. If you have any questions, please call Richard C. Stewart at (209) 445-6186. DANE S. JOB2q'SOiN Senior Engineering Geologist .,. CRG No. 4239 DSJ:rcs Enclosure cc: Mr. Peter Janicki, California Integrated Waste Management Department, Sacramento Ms. Daphne Washington, Kern County Waste Management Department, Bakersfield Mr. William O'Rullian, Kem County Environmental Health Services Department, Bakersfield ¢,,~Mr. Alan Tandy, City of Bakersfield Manager, Bakersfield Ms. Judy Skousen, City of Bakersfield Attorney, Bakersfield MEMORANDUM CALIFORNIA REGIONAL WATER QUALITY CONTROL BOARD · CENTRAL VALLEY REGION 3614 East Ashlan Ave. Phone: (209) 445-511t5 Fresno, CA 93726 CALNET: 8-421-5116 To: Dane S. Johnson From: Richard C. Stewart Senior Engineering Geologist Associate Engineering Geologist DATE: 18 November 1996 SIGNATURE: Subject: ASSESSMENT OF LANDFILL GAS CONDENSATE DISCHARGE AT THE CITY OF BAKERSFIELD SANITARY LANDFILL, KERN COUNTY In July 1996, Kleinfelder conducted an assessment at the Bakersfield Sanitary Landfill to determine if condensate discharged to a gravel-packed column (dry well) had impacted subsurface soils. The assessment consisted off · Drilling one 77-foot deep boring next to the gravel-packed column. · Collecting split-spoon soil samples at five foot intervals for the preparation of lithologic logs and headspace screening for volatile organic compounds via a flame ionization detector. · Selecting two soil samples (20 and 77 feet below ground surface) for analysis of total concentrations of heavy metals and purgeable halocarbons and aromatic compounds. Chemical analysis of the soil sampl_es_d~id ngt_d_et~ect_cgncentratio~pf anyheavy__me~tal 0b~oye~..the total threshold limit conc~ati°n (TTLC), or at a concentrations ten times th~ soluble threshold limit concentration. Analysis for organic compounds did not detect waste constituent above the laboratory detection limits. CONCLUSION Waste constituents associated with landfill gas condensate were not detected in soil samples collected adjacent to the gravel-packed column. Condensate previously discharged to the gravel-packed colunm appears to have left no residual that threatens groundwater quality. BAKERSFIELD Public Works Department MEMORANDUM November 25, 1996 TO: · Alan Tandy, City Manager Z 7 · · //:t / ,,~,.4~./.,) FROM: Raul Rajas, Public Works Direc ~ - t-7/~ SUBJECT: Anti-Graffiti Billboards Enclosed, and for your final approval, is a copy of the design to be used in the anti-graffiti billboards throughout the City. The design has been reviewed by the Police and Pubic Works Department Heads. Mr. Todd Hansen, Martin Outdoor Advertising's General Manager, has offered the City to advertise the graffiti program on their billboards. Martin Outdoor Advertising will do this service free of charge, on a continuous basis, and tbr as long as the City desires as part of their local public service campaign. (At the present time, Martin Outdoor Advertising's monthly charge is $633 per billboard; therefore, this oft~r constitutes a substantial savings to the City). Within Martin's public service announcement regulations, it shall be understood that: · Place~nent will be according to space availability. Space availability may vary anywhere from 10 to 60 billboards throughout the City and County. · Placement will be also according to time "windows". Time "windows" may vary ,., anywhere from 5 to 60 days. · City may designate target areas. The production cost of the billboards is about $50 per unit. It is estimated that the City will need to produce an average orS0 billboards per year, which translates into $2,500. This cost will be covered by Texaco, who will sponsor the City's anti-graffiti billboards. .. In you have any comments or suggestions, please contact me. BAKERSFIELD "Frae Graffiti Removal B A K E R $ F I E L D Economic and Community Development Department MEMORANDUM December 6, 1996 TO: Alan Tandy, City Manager t~ FROM: Jake Wager, Economic Development Direc SUBJECT: Proposed Re-Programming of HOME and CDBG Funds for First Time Homebuyers, Single Family Rehab Loan Programs, Southeast Redevelopment Project Area and Other Projects H)ENTIFIED NEEDS HOME PROGRAM Single Family Rehabilitation Loan Progra_m In the City's FY 96-97 Action Plan to HUD (CDBG/HOME), approved by the City Council, $216,505 of HOME funds was designated for the Single Family/Owner-Occupied Rehabilitation Program. As a result of an aggressive marketing program, loans totaling $185,380 have been approved in the last four months. The available balance for Single Family Rehabilitation is now $31,125. At best, that balance is enough to fund two additional rehabilitation projects. We · estimate this amount will be exhausted by the end of December 1996. We have a backlog of 18 applicants whose homes need rehabilitation, and who qualify for the loan program. Unless additional funds are made available, under current circumstances, 16 of these applicants will be suspended for six months or more. In addition to the 18 backlogged applications, we receive approximately eight new applications each month. That number may increase when the Panama #10 Sewer Connection Fee Loan Program is launched. To encourage residents in the Panama #10 area to rehabilitate their substandard housing, the plan is to forgive the sewer connection fee loan, if the homeowner qualifies for and obtains a rehabilitation loan. Our current lack of funds takes away the ability to offer such an incentive; it probably means that we will not be able to offer the rehabilitation program to citizens in that area for at least six months. · December 5, 1996 Alan Tandy The First Time I-Iomebuyer Mortgage Assistance Program The First Time Homebuyer Mortgage Assistance Program shares a similar challenge. The City Council approved our Action Plan funding level of $283,245 for down payment assistance. Successful promotion of this program has resulted in $240,445 in down payment assistance to low income first time homebuyers. This leaves a balance of $42,800 to fund approximately 16 additional First Time Homebuyer loans (10 applications totaling $24,835 are now pending). We receive an average of five applications each week in this program. Based on the demand for this program, all available funds will be depleted by the end of December 1996. Restoration Commnnity Projects~ Inc. (RCP1) The RCPI project began initially as a Rental-Rehabilitation only for improvements to the former Friese House. Subsequently, RCPI requested additional funds to acquire an adjacent property as well as the rehabilitation work proposed for Friese House. Rental-Rehab funds of $133,650 from CDBG were identified for the rehabilitation and $55,000 in HOME funds were tagged for the acquisition. RCPI proposes to use the facility as a transitional housing site for alcohol and/or substance abusers who may be pregnant or have children. The total amount of City funds requested by RCPI was $188,650. Affordable Homes~ Inc. (AHI) Affordable Homes, Inc. has been negotiating with the Golden Empire Gleaners for acquisition of the Gleaner's Haven project for several months. The Haven was established as a transitional housing program aimed at families in crisis whose goal is financial independence through education and employment. The object of the program was to provide the services, training and supportive environment needed for these families to succeed while living in an affordable housing complex. While the Gleaners and AHI have reached a purchase agreement, discussions are still underway with the major lenders of the project to reduce the pay-off of the outstanding debt. AHI has approached the County .about funding a portion of this project. AHI has requested $520,000 of HOME funds for acquisition assistance. CDBG Southeast Redevelopment Pro,iect Area We have examined both the availability and eligibility of the use of CDBG and/or HOME funds for the costs associated with the creation of the Southeast Redevelopment Project Area. This is not a HOME eligible activity thus our only option is to consider utilizing CDBG funds. The following are two options available to the City of Bakersfield to fund the proposed project: S:XJAN,S~REPROO$.MEM 2 · December 5, 1996 Alan Tandy Option A: Shift $100,000 of CDBG Multi. Family funds for the RCPl project to the HOME program. RCPI would receive funding, only the funding source would shif~ from CDBG to the HOME program. CDBG funds are then freed up to pay for the creation of the Southeast Redevelopment Project Area. Option B: Shift $100,000 of CDBG Economic Development funds directly to the Southeast Redevelopment Project. These funds are currently committed to assisting prospective businesses to locate in Bakersfield. The current balance of $401,550, less $100,000 moved to Southwest Redevelopment, would leave a balance remaining of $301,550 for economic development assistance. Since CDBG funds are used in both options and the project is considered an administration and planning activity by HUD, the entire project costs would be counted towards the 20% planning and administration cap. For FY 96-97 the budget for administration is 18% of the total CDBG budget. An increase orS100,000 in the CDBG administration budget in FY 96-97 could push us beyond the 20% cap. A more detailed financial analysis will need to be made to determine the maximum amount allowable under the 20% cap during the current fiscal year. SOURCES Staff is recommending a strategy to support the popular on-going housing programs provided by this department, fund thc development of the Redevelopment Project Area as well as a more conservative contribution to the two nonprofit affordable housing projects, Affordable Homes Inc. and Restoration Community Project, Inc. The following table outlines the proposed funding levels and sources of funds. S :~JAN'S~ILEPROG$.MEM 3 December 5, 1996 Alan Tandy . riior~,,,, sxI~-PROGRAMMF~D FUNDS PROJECT AMOUNT PRoPOsED SOURCES AMOUNTS TOTALS NAME REQUEST FUNDING LEVEL HOME Single $225,000 $225,000 Multi-Family $183,550 Family Rehab Rehab Loans New $41,450 Construction $225,000 HOME First Time $225,000 $225,000 New $198,825 Homebuyers Construction Allocated $20,500 Carryover Unappropriat $15,675 ed Fund $225,000 Balance HOME RCPI $188,650 $100,000' Acquisition $55,000 Multi-Family $45,000 Rehab $100,000 HOME Al-ti $520,000 $200,000* CF]DO $178,865 * Multi-Family $21,135 $200,000 Rehab HOME SUMMARY $1,179,785 $750,000 HOME $750,000 $750,000 4 Proiects CDBG Southeast $100,000 $100,000 Multi-Family $100,000 $100,000 Redevel. or Economic Project Area Devel. CDBG SUMMARY $100,000 $100,000 CDBG $100,000 $100,000 1 Project * Subject to County participation in funding ** Subject to the build-out of 8 additional units and County participation in funding S:UAN'S~REPROG$.MEM 4 December 5, 1996 Alan Tandy While this proposed "re-shuffling" of funds does not fully address the needs of the 2 non-profit housing agencies, it does fund 2 very popular and productive on-going City affordable housing activities. Conversely, staff has received preliminary indications that the County will be willing to participate in funding the two nonprofits, allowing the projects to go forward. Based on the these calculations, this re-programming would provide housing assistance for a minimum of 75 households benefiting from the Single Family Rehab and First Time Homebuyers programs over the balance of the year in addition to more that 40 families receiving housing and services with RCPI and AHI. The two nonprofits have been advised to approach the County for funding a portion of their projects. Attached are three possible time lines for affecting the Consolidated Plan amendment necessary to re-program the HOME and CDBG funds involved in these proposed changes. S:XJAN'S~EPROG$.MEM 5 · TENTATIVE TIMELINE FOR AMENDMENT PROCESS Plan A 12/16/96 Budget & Finance Committee to Review Amendment. Authorize Publication of Public Notice 12/17/96 Publish Public Notice (30 Day Review) 1/22/97 City Council Meeting. Approve Amendment and Submit to HUD. 1/23/97 Funds Available. Plan B 12/16/96 Budget & Finance Committee to Review Amendment. Refer to City Council to Authorize Publication of Public Notice. 1/8/97 City Council Meeting to Authorize Publication of Public Notice. 1/9/97 Publish Public Notice (30 Day Review). 2/19/97 City Council Meeting to Approve Amendment. Submit to HUD. 2/20/97 Funds Available. Plan C I 1/8/97 City Council Meeting to Refer Amendment to Budget & Finance Committee. 2/10/97 Budget & Finance Committee to Review Amendment. Refer to City Council to Authorize Publication of Public Notice. 2/19/97 City Council Meeting to Authorize Publication of Public Notice. 2/20/97 Publish Public Notice (30 Day Review). 3/26//97 City Council Meeting to Approve Amendment. Submit to HUD. 3/27/97 Funds Available. MEMORANDUM December 3, 1996 To: Alan Tandy, City Manager From~,~nk, Convention Center Superintendent Subject: Proposed Arena Operation and Maintenance Cost Estimates Design criteria for an additional arena to compliment our existing facilities is underway. As such, staff' reviewed data pertaining to arena operating and maintenance costs. The International Association of Assembly Managers (IAAM) 1994 Industry Profile Survey ([PS) provided the basis for our cost analysis in conjunction with the 1996 [PS Update. The IAAM Arena survey provided initial information from 24 facilities followed by 21 facilities in the updated calculations. IPS information was assembled from facilities within a 7,500 - 12,000 seating capacity. We were able to more closely scrutinize information from the [PS study regarding facilities, excepting Fresno, that were within a closer range (7,500 - 9,700 seats) of our proposed arena. Fresno (11,300 maximum seats) was included in our report due to its proximity to Bakersfield. To remain consistent with previously reported revenue figures, staff continued to utilize "average" range responses from IAAM's surveys. As with all surveys, reporting accuracy is limited to the interpretation of questions by the respondent. Another factor to consider is that most facilities sited were in regions where labor and utilities are at a lesser rate than our locale. The [PS Survey average number of employees is 12.9 regular and 25.7 temporary. Our more specific reviews of comparably sized arenas reference an average employee count of 13.6 regular and 2.0 temporary. Certain facilities utilize outside service providers rather than hiring their own temporary staff. This may explain the significant difference in temporary employee numbers. Upon review of available information, staff estimates an initial operating budget of $1,300,000 in 1996 dollars. Excluding debt service, the two largest budgetary expenses are typically labor and utilities. Included are 8 regular and 10 temporary new employee positions. To minimize labor expenses, this plan anticipates using existing supervisory and management personnel. Staff estimates that revenues will be approximately $1,000,000. Our proposed budget is based upon a full years operation. First years revenues may be less dependant upon the actual opening date of the facility. Also, revenues may vary due to such factors as routing of concert and theatrical performances or commitments for convention bookings. Securing additional principal clients such as a basketball team or other franchises would provide an opportunity for significantly increasing revenues. We believe the above projections are an achievable goal. When the new Arena is approved, an aggressive marketing effort will not only increase projected revenues but provide greater opportunities in the community for entertainmem, convention and business growth. Attached please find copies of data compiled from arenas, complexes, and a proposed organizational chart. cc. Lee Andersen ARENA OPERATION & MAINTENANCE NEW CONVENTION CENTER ARENA - OPERATING COMPARISON DATA COLLECTED FROM IAAM 1994 - INDUSTRY PROFILE SURVEY ARENA ARENA TOTAL DIRECT TOTAL DIRECT NUMBER OF NUMBER OF CITY, STATE SEATING OPERATING OPERATING FULL-TIME PART-TIME MARKET POPULATION CAPACITY EXPENSES INCOME EMPLOYEES EMPLOYEES 1) EL PASO COUNTY COLISEUM 7,680 $545,195 $470,564 14 0 EL PASO, TEXAS 2,100,000 2) FIVE SEASONS CENTER 8,311 $2,153,886 $2,302,411 14 4 CEDAR RAPIDS, IOWA 300,000 3) FRESNO CC (SELLAND ARENA) 11,300 $1,500,000 $1,210,000 19 3 FRESNO, CALIFORNIA 600,000 4) GEORGE M. SULLIVAN ARENA 8,837 $2,297,758 $2,463,300 17 2 ANCHORAGE, ALASKA 250,000 5) LAKEFRONTARENA 9,700 $1,100,000 $900,000 11 0 NEW ORLEANS, LOUISIANA 1,000,000 6) NASHVILLE MUNI. AUDTIORlUM 9,475 $1,199,420 $777,492 10 1 NASHVILLE, TENNESSEE 1,000,000 7) WHEELING CIVIC CENTER 7,628 $1,273,867 $1,422,027 10 4 WHEELING, WEST VIRGINIA 260,000 AVERAGE TOTALS 8,934 $1,438,589 $1,363,685 13.6 2 NEW-CONVENTION CENTER ARENA - OPERATING COMPARISON DATA COLLECTED FROM IAAM 1994- INDUSTRY PROFILE SURVEY SEATING TOTAL DIRECT TOTAL DIRECT NUMBER OF NUMBER OF COMPLEX CAPACrrY OPERATING OPERATING FULL-TIME PART-TIME CITY THEATRE / ARENA EXPENSES INCOME EMPLOYEES EMPLOYEES MARKET POPULATION EXHIBIT AREA 1) AMARILLO CIVIC CENTER 2,300 17,850 $999,000 $713,000 20 15 AMARILLO, TEXAS 28,000 SQ. FT. 300,000 2) DANE COUNTY EXPO CENTER N/A / 10,250 $2,924,948 $401,700 30 1 MADISON, WISCONSIN 100,000 SQ. FT. 5O0,00O , 3) DULUTH CONVENTION CENTER 2,400 17,750 $3,905,995 $4,103,371 30 15 DULUTH, MINNESOTA 50,000 SQ. FT. 250,000 4) ERIE CIVIC CENTER 2,506 / 7,500 $943,000 $788,000 11 5 ERIE, PENNSYLVANNIA 30,000 SQ. FT. 350,000 5) FRESNO CONVENTION CENTER 2,359 1 11,300 $3,589,600 $2,077,900 38 5 FRESNO, CALIFORNIA 32,000 SQ. FT. 600,000 6) ONCENTER COMPLEX 2,129 (2) / 8,500 $3,085,914 $1,260,324 56 12 SYRACUSE, NEW YORK 82,250 SQ. FT. 745,000 7) PINE BLUFF CONVENTION CENTER 1,901 / 8,300 $807,162 $286,750 29 2 PINE BLUFF, ARKANSAS 90,000 SQ. FT. 500,000 8) ROANOKE CIVIC CENTER 2,458 / 11,000 $1,900,000 $1,495,000 23 1 ROANOKE, VIRGINIA 14,000 SQ. FT. 750,000 NF.W CONVENTION CENTER ARENA - OPERATING COMPARISON 9) SAVANNAH CIVIC CENTER 2,566 / 9,600 $1,332,47-5 $1,149,200 13 1 SAVANNAH, GEORGIA 25,000 SQ. FT. 250,000 10) TUCSON CONVENTION CENTER 550 1 9,700 $4,219,913 $1,788,256 33 20 TUCSON, ARIZONA 90,000 SQ. FT. 600,000 11) TULSA CONVENTION CENTER 1,300 /9,138 $2,557,977 $1,142,890 39 35 TULSA, OKLAHOMA 102,600 SQ. FT. 750,000 12) VON BRAUN CiViC CENTER 2,171 / 8,738 $4,552,102 $3,509,821 52 70 HUNTSVILLE, ALABAMA 50,000 SQ. FT. 500,000 AVERAGE TOTALS 2,058 / 9,136 $2,568,174 $1,559,684 31.2 15.2 56,154 SQ. FT. CONVENTION CENTER DIVISION PROPOSED ORGANIZATIONAL CHART (INCLUDES CURI~NT STAFFING) DECEMBER 2, 1996 EXISTING PROPOSED TOTAL BAKERSFIELD PUBLIC WORKS DEPARTMENT MEMORANDUM TO: Alan Tandy, City Manager FROM: Raul Rojas, Public Works Director DATE: December 6, 1996 SUBJECT: RESPONSES TO COUNCIL REFERRALS Enclosed please find responses to the following Council referrals: Referral Response to letter from Robert Small regarding removal of warning sign. (Smith) Investigation of the situation showed that the warning sign installed adjacent to Mr. Small's residence at 3512 LaCosta Street was optional per the CalTrans Traffic Manual. Therefore, Mr. Small has been informed that the sign would be removed. A work order is being processed to remove the sign. Referral Stop Sign request at the intersection of 8th and T Streets. (Carson) A traffic study for 4 way stop control will be performed. Data is being collected at this time. It has been noted that an elementary school is located in the vicinity and stop control is desired because of the heavy school traffic crossing 8th Street. The traffic study is expected to be completed in the next 10 working days and a recommendation will be made at that time. BAKERSFIELD PUBLIC WORKS DEPARTMENT Traffic Engineering Memorandum DATE: December 3, 1996 TO: RAUL M. ROJAS, PUBLIC WORKS DIRECTOR FROM: STEPHEN L. WALKER, TRAFFIC ENGINEER.~ SUBJECT: RESPONSE TO LETTER BY ROBERT SMALL, REFERRED BY COUNCILMEMBER SMITH (WARD3), REGARDING REMOVAL OF WARNING SIGN(S). I have reviewed the situation outlined in a letter to Councilmember Smith regarding a request to have a warning sign removed from the sidewalk area adjacent to the writer's residence. The residence is located at 3512 La Costa Street. The sign was recently installed as part of the 4-way stop installation at La Costa and University. The sign was installed as per normal practice by the General Services traffic sign crews. Placement of the sign is optional per the CalTrans Traffic Manual and was not required on the work order issued by Traffic Engineering. I contacted Mr. Robert Small, ph. 835-4542 @ KIA Insurance, and informed him that since the sign was optional and not part of our work order, I would direct the sign crew to remove the sign from the street near his residence. Mr. Small thank me for our prompt response to his request and said he was satisfied with the information that the sign would be removed. A work order is being processed to remove the sign. No further action or response is required. cc: Jacques LaRochelle, Engineering Services Manager Bruce Deeter, CE III, Traffic Engineering Brad Underwood, CE III, Traffic Engineering PW Memo Files Traffic Engineering File - Lacosta/University file. slw: P:\DATA\VVP\1996\Mr_SrnalI.Ref v , ~ David R. Doig, CPCU, ARM 1601 New Stine, Suite 230 ;;' Stephen R. £amirand John P. Moorhouse, CIC Bakersfield Marvin E, Olson California, 93309 Thomas A. Olson, MI Phone (805) 835-4542 John G. Pryog CPCU, ARM, AAI KIA Insurance Associates, Inc. RobertJ. Small, CPCU, CLU, ChFC FAX (805)835-4500 November 18, 1996 COUNCILWOMAN PAT SMITH BAKERSFIELD CITY HALL 1501 TRUXTUN AVENUE BAKERSFIELD, CA 93301 RE: STOP SIGN (WARNING SIGN) 3512 LA COSTA STREET. The decision to make the intersection of University Avenu~ -an*d~La--C~st-a--S.tr~t~-a--4-~fi~-~top was~a----~d~.-~ -~ needed for everyone's safety. However, I would like to ask that the sign in front of my home which warns (alerts) drivers that a stop sign will be encountered at the corner be removed. I know that it increases driver alert- ness, but I feel I have valid reasons for its removal. 1. This section of La Costa street is only one block long. It is not a thoroughfare. 2. I already have a steet light pole on the north boundary line' of my home. It isn't fair to have another pole on the other ~<. property line. 3. Potential graffiti will reduce the value of my home. 4. Large warning printed on the street. If you are not able to have this removed, please tell me where my next effort should be made. Perhaps the City Attorney can give me legal advice, etc. Thank you for whatever you can do. , We make your insurance make sense. ~,,~Q ........ · INSURANCE CONGRESS CHARTER . . MEMBER BAKERSFIELD PUBLIC WORKS DEPARTMENT Traffic Engineering Memorandum DATE: December 2, 1996 TO: RAUL M. ROJAS, PUBLIC WORKS DIRECTOR FROM: STEPHEN L. WALKER,' TRAFFIC ENGINEER./~~ SUBJECT: STOP SIGN REQUEST, INTERSECTION OF 8TH AND T STREETS, WARD1. As requested by Councilmember Carson, a traffic study for 4 way stop control will be performed at the intersection of 8th and T Streets. Data is being collected for traffic volume and pedestrian crossings. An elementary school is located in the vicinity. Per former Councilman Edwards, the stop control is desired because of the heavy school traffic crossing 8th Street. The traffic study is expected to be completed in the next 10 working days. A recommendation will be made at that time and an update to this request provided. cc: Jacques LaRochelle, Engineering Services Manager Bruce Deeter, CE III, Traffic Engineering Brad Underwood, CE III, Traffic Engineering PW M~mo Files Traffic Engineering File - 8th and T intersection file, referral ward1 slw: P:\DATA\WP\I gg6\8@T_Stop.Ref ,nnnn' lnnn' League of Californi,a Cities ~[~~t~ 1400 K STREW. SACRAMENTO, CA 955~4 (91~) ~5~-8200 Ca/ifomia Cities ~ork Together November 1996 TO: CITY MANAGERS - FOR THE ATTENTION OF MAYORS, COUNCIL MEMBERS, CITY ATTORNEYS, AND OTHER APPROPRIATE CITY OFFICIALS Attached are the resolutions adopted at the 98th League Annual Conference held in Anaheim, October 13-15, 1996. These resolutions represent the culmination of a year- long development and review process by the policy committees, individual cities, and League divisions and departments throughout the state. Th& process was open, affording literally hundreds of city officials the opportunity to participate directly. We genuinely appreciate your involvement. The resolutions process becomes meaningless unless every effort is made to implement the resolutions in the spirit in which they were approved. The League's Board of Directors, divisions, departments, policy committees, and individual city officials will be asked throughout the coming year to develop and support federal, state, and local actions to implement these policies. For your information, a summary is enclosed that updates the status of resolutions adopted at the 1995 Annual Conference in San Francisco. Thank you for your continued support. Jim Worthen Don Benninghoven President, League of California Cities Executive Director Council Member, Eureka I L[ACU[ 01: C~,LII:OI~I'II:~ CITI[S RESOLUTIONS ADOPTED 98th ANNUAL CONFERENCE ANAHEIM, CA OCTOBER 15, 1996 FINAL REPORT ON RESOLUTIONS The Annual Conference was held in Anaheim on October 13-15, 1996. The General Resolutions Committee met on Monday, October 14, in Anaheim and considered 16 resolutions, including two petitioned resolutions, numbered 15 and 16. Of the 16 resolutions, 12 were forwarded to the General Assembly for adoption. Two were referred to the Board of Directors of the League for assignment to appropriate committees for further study. Resolutions were referred to the Board in those cases in which there was insufficient information available to enable the committee to approve or disapprove the resolutions on their merit, or for which further, study and review was felt appropriate. Failure of the General Resolutions committee to recommend adoption of these resolutions by the General Assembly does not mean that they will not receive further consideration or be approved at a later date. The General Assembly approved the recommendations of the General Resolutions Committee on all resolutions. The resolutions adopted and reproduced here represent the policy direction that the organization will take for 1997 and beyond. Many positions were overwhelming majorities, others were not. However, a consensus was achieved through a deliberate and open process. We wish to sincerely thank all city officials who served as members of policy committees, the General Resolutions Committee, and the official voting delegates of the member cities who participated in the development of these policies. Number Key Word Index Reviewing Body Action COMMITTEE ON ADMINISTRATIVE SERVICES 1 2 3 4 1 Presidential Appointments to Policy Committees ** D A A 2 Appointment of Policy Committee Chairs and Vice Chairs D D D D 3 Composition of the Board of Directors (Bylaws Amendment) D D D D 4 Businesg Confidentiality and Customer Privacy for Municipal Utilities A A A A 5 Open Meetings of Governmental Agencies A A A A COMMITTEE ON COMMUNITY SERVICES 1 2 3 4 Media Literacy Aa Aaa A A Human Dignity and a Zero Tolerance for Hate Crimes Aa Aaa Aa A COMMITTEE ON ENVIRONMENTAL QUALITY 1 2 3 4 8 Electric Industry Restructuring Aa Aa A A 9 Air Quality Funds Aa Aaa A A 10 Urban Forestry Programs ** A A A ,11 Brownfield Development *** Aa Aa A COMMITTEE ON HOUSING, COMMUNITY AND ECONOMIC DEVELOPMENT 1 2 3 4 I[ *11 ] Brownfield Development [ ** [ Aa A [ A COMMITTEE ON PUBLIC SAFETY 1 2 3 4 ,7 Human Dignity and a Zero Tolerance for Hate Crimes Aa Aaa A A 12 Criminal Alien Impacts on Local Government Aa Aaa R .R 13 Fire Extinguishers A Aa A A Number Key Word Index Reviewing Body Action COMMITTEE ON ADMINISTRATIVE SERVICES 1 2 3 4 1 Presidential Appointments to Policy Committees ** D A A 2 Appointment of Policy Committee Chairs and Vice Chairs D D D D 3 Composition of the Board of Directors (Bylaws Amendment) D D D D 4 Business Confidentiality and Customer Privacy for Municipal Utilities A A A A 5 Open Meetings of Governmental Agencies A A A A COMMITTEE ON COMMUNITY SERVICES 1 2 3 4 Media Literacy Aa Aaa A A Human Dignity and a Zero Tolerance for Hate Crimes Aa Aaa Aa A COMMITTEE ON ENVIRONMENTAL QUALITY 1 2 3 4 Electric Industry Restructuring Aa Aa A A Air Quality Funds Aa Aaa A A Urban Forestry Programs ** A A A Brownfield Development *** Aa Aa A COMMITTEE ON HOUSING. COMMUNITY AND ECONOMIC DEVELOPMENT 1 2 3 4 · '11 [ Brownfield Development I ** [ Aa A [ A ]1 COMMITTEE ON PUBLIC SAFETY 1 2 3 4 · 7 Human Dignity and a Zero Tolerance for Hate Crimes Aa Aaa A A 12 Criminal Alien Impacts on Local Government Aa Aaa R .R 13 Fire Extinguishers A Aa A A Number Key Word Index Reviewing Body Actioi~ COMMITTEE ON REVENUE AND TAXATION 1 2 3 4 Voter Approval for Revenue Measures N R R R [NOTE: No resolutions were' assigned to Employee Relations or Transportation, Communications, and Public Works policy committees.] RESOLUTIONS INITIATED BY PETITION Resolution General Committee Assembly Recommendation Action I 15 I Rest°rati°n °fL°cal Pr°perty Tax Revenues A I A Il 16 ,, Disaster.Assistance A A ADOPTED 1996 ANNUAL CONFERENCE RESOLUTIONS Resolutions Referred 1[o Committee on Administrative Services 1. RESOLUTION RELATING TO PRESIDENTIAL APPOINTMENTS TO POLICY COMMITTEES Source: City of Carson Referred to: Administrative Services Policy Committee WHEREAS, the League of California Cities is organized to assist its members in accomplishing the policies of the collective elected membership; and WHEREAS, the League of California Cities has established through its Bylaws an organizational structure that includes a President, Board of Directors, Regional Divisions, Departments and committees; and WHEREAS, the President has the authority to appoint representatives to policy committees in addition to the division and department appointments; and WHEREAS, by action of the General Assembly at the League's Annual Conference in San Francisco, October 24, 1995, the President's authority to appoint representatives to policy committees was reduced to seven (7) per committee; and WHEREAS, this action denied many elected officials the opportunity to serve on these policy committees; and WHEREAS, the League of California Cities encourages active participation by its members, provides training oppommities through involvement in committees and task forces, which in turn develops our future leaders; now, therefore, be it RESOLVED, by the General Assembly of the League of California Cities assembled in Annual Conference in Anaheim, October 15, 1996, that the League amend its policy to state that the President of the League of California Cities shall be permitted fourteen (14) appointments per policy committee, and those members term shall mn concurrently with the President's tenn. 4. RESOLUTION RELATING TO BUSINESS CONFIDENTIALITY AND CUSTOMER PRIVACY FOR MUNICIPAL UTILITIES Source: City of Palo Alto Referred to: Administrative Services Policy Committee WHEREAS, dozens of California cities own and operate municipal water, gas, electric, and/or other utility enterprises; and 5 WHEREAS, the Califomia Public Utilities Commission (CPUC) substantially deregulated the gas industry beginning in 1986, thus allowing, municipally-owned gas utilities to compete with investor- owned Utilities in seeking favorable gas supply and transportation contracts; and WHEREAS, the CPUC has initiated proceedings which will deregulate and restructure the electric industry in order to create a more competitive and cost efficient'market; and WHEREAS, investor-owned utilities, such as Pacific Gas & Electric and Southern California Edison, carefully protect the confidentiality of proprietary business and customer information in order to remain competitiw~ in the marketplace and to protect customer privacy interests; and WHEREAS, in order to provide fair opportunities for business competition by municipally- owned utilities,~ the confidentiality of certain business-related utilities information contained in public records must be protected; and WHEREAS, the Califomia Constitution requires that personal information about municiPal utility customers must be protected from unwarranted disclosure; and WHEREAS, the Califomia Public Records Act, having been enacted before deregulation of the utility industry, does not contain adequate provisions to allow municipal utilities to protect the confiden~tiality of proprietary business information and customer privacy; and WHEREAS, in order to remain viable and competitive, municipal utilities can and must have the same degree of business confidentiality protection as investor-owned utilities; and WHEREAS;, in order t° protect the privacy interests of municipal utility customers, personal customer information held by municipally-owned utilities must be protected from unwarranted disclosUre; now, therefore, be it RESOLVED, by the General Assembly of the League of Califomia Cities aSsembled in Annual Conference in Anaheim, October 15, 1996, that the League support legislation that will provide municipal utilities and their customers with business confidentiality and personal customer information privacy protection that is equivalent to that which is currently enjoyed by investor-owned utilities and their customers. 5. RESOLUTION RELATING TO OPEN MEETINGS OF GOVERNMENTAL AGENCIES Source: Desert/Mountain Division Referred to: Administrative Services Policy Committee WHEREAS, the public has placed their trust in goverrLrnent to govern ethically; and WHEREAS, government sometimes takes actions that: bring their ethics into question; and 6 WHEREAS, government needs to set the highest ethical standards and adhere io them; now, therefore, be it RESOLVED, by the General Assembly of the League of California Cities assembled in Annual Conference in Anaheim, October 15, 1996, that the League support legislation that requires: 1. All governmental agencies to conduct their activities with the highest level of ethical standards; 2. The State Legislature conduct all legislative deliberation under the open meeting laws of the Ralph M. Brown Act, specifically that the State Budget deliberations be held in open meetings to allow citizens to fully understand the significance of legislative decisions on their local governments; 3. No governmental agency shall pass laws exempting itself or any other governmental body from the requirements of the law. Resolutions Referred to Committee on Community Services 6. RESOLUTION RELATING TO MEDIA LITERACY Source: Community Services Policy Committee Referred to: Community Services Policy Committee WHEREAS, violent crime is a major concem and cost to cities in California; and WHEREAS, studies have established that consistent and repetitive exposure to violence on screen and in prim increases the acceptance of violence in our cities and predisposes some persons to actual violence, leading to a higher incidence of violent crime, especially among youth; and WHEREAS, graphic violence ignores the human cost of making violence acceptable by imitation; and WHEREAS, despite these facts, materials depicting graphic violence continue to be created and viewed and are pervasive in our society, and result in collective abdication of responsibility for the extent of violence in the media and the consequences of such violence on our cities; and WHEREAS, censorship and technological restrictions are no substitme for individuals' and families' learning the skills of critical viewing, making informed choices, and managing time spent with all forms of media, particularly in relation to parental responsibility for children's television viewing; now, therefore, be it RESOLVED, by the General Assembly of the League of California Cities assembled in Annual Conference in Anaheim, October 15, 1996, that the League take a position in opposition to the overuse of violence in the media and actively promote and encourage community education programs which teach the skills of critical viewing. 7 RESOLUTION RELATING TO HUMAN DIGNITY AND A ZERO TOLERANCE FOR HATE CRIMES Source: Orange County Division Referred to: Community Services Policy Committee and Public Safety Policy Committee WHEREAS, within the cities of California there are residents who represent every walk of life, many nations, varied lifestyles, and different religious beliefs, and this diversity brings to our state a rich and varied cultural iheritage; and ~WHEREAS, our citizens honor and respect the diversity that exists in the state and when acts of hate are committed against any citizen, it is considered an act against the entire community; and WHEREAS, the cities of California declare that everyone should be treated with courtesy and respect, regardless of their racial background, nation of origin, religion practiced, sexual orientation, gender, age, or disability status, and it is the right of all citizens to pursue their daily lives with the knoWledge that they will not be physically harmed or verbally abused; and WHEREAS,, a hate crime is any criminal or attempted criminal act that is motivated by the victim's race, ethnic:ity, religion, sexual orientation, gender, age, or disability status, which may involve a verbal, written, or physical action that is intended to create emotional suffering, physical harm, or property damage; now, therefore be it RESOLVED, by the General Assembly of the League of California Cities assembled in Annual Conference in Anaheim, October 15, 1996, that the League support a policy that affirms human dignity and strives to permanently eliminate all hate crimes, and has a zero tolerance for any hate crimes within our respective cities and that the cities of California agree in the strongest terms that they will vigorously fight criminal activity known as "hate crime" with all of the resources at their disposal; and be it further REsoLVED, in support of this declaration, that the cities of California send these messages: To our communities we say, "Believe in the interdependence of all people. Participate at your places of ~Vorship artd community meetings, and lend your voice in opposing hate"; To our schools we say, "Continue your programs and curricula which promote respect towards those who are different. Call on resources of your city, county, state, and the nation as you engage in the educational process to battle hate"; To the parents we say, "Act as positive role models for your children by demonstrating tolerance towards those whose race, nationality, religion, sexual orientation, gender, age, or disability status may be different from yours. You are the most powerful influence on your children's behavior"; TO the young people we say, "Educate yourselves to the ways of the world and the lessons of history. Develop sensitivity toward the feelings of others. -Thus, as you grow into adulthood and become society's leaders, you will be more effective in the fight to preserve man's humanity toward man"; and be it further 8 RESOLVED, that since silence and apathy are the greatest allies of those committing hate crimes, if you are a victim or a witness of a hate crime, go to the nearest telephone, call the police and say "I want to report a hate crime"; with those seven words, you will instantly have as an ally the full resources of the cities of California; you are not alone!; and be it further RESOLVED, that the cities of Califomia warn those who advocate or perpetrate hate, not to test the cities' resolve to oppose them as each city is encouraged to vigorously pursue a course of investigation, apprehension, prosecution, conviction, and incarceration of all those who participate in hate crimes. Resolutions Referred to Committee on Environmental Quality Resolution #I 1 Referred also to Committee on Housing, Community, and Economic Development 8. RESOLUTION RELATING TO ELECTRIC INDUSTRY RESTRUCTURING Source: Council Member Mike Siminski, City of Lompoc Referred to: Environmental Quality Policy Committee WHEREAS, California's Constitution specifically grants the authority to local government to provide electricity service, resulting in more than 30 percent of California residents and businesses being served by electric service from local government-operated electric utilities; and WHEREAS, municipal utilities are governed by either directly-elected or appointed governing bodies, and their consumers, who are the owners of the municipal electric utility, participate in the rate- making decisions of the utility; and WHEREAS, the League of California Cities historically has opposed CPUC intrusion into the activities of municipal utilities and has adopted policy guidelines regarding electricity restructuring that state, "No restructuring proposal should abridge the existing authority of municipal utilities to operate or abridge the ability of cities to form municipal utilities in the future;" now, therefore, be it RESOLVED, by the General Assembly of the League of California Cities assembled in Annual Conference in Anaheim, October 15, 1996, that the League reaffirm its support of electric service by consumer-owned public power municipal utilities and encourage the continuation of the "home rule" authority vested in California's cities; and be it further RESOLVED, that the League continue to participate in the electric industry restructuring debate to ensure that no erosion of local government authority occurs; and be it further RESOLVED, that the League oppose all legislation that erodes the ability and authority of municipal utilities to operate. 9. RESOLUTION RELATING TO AIR QUALITY FUNDS Source: Los Angeles County Division Referred to: Environmental Quality Policy Committee WHEREAS,, local governments have an important role to play in California's efforts to achieve ciean air for its citizens; and WHEREAS,. air districts that are designated as nonattainment are entitled to levy fees to fund programs to reduce air pollution from motor vehicles under {}4.4223 of the Health and Safety Code (AB 2766 and AB 4.34); and WHEREAS,. local governments receive a portion of these funds to implement local programs to reduce emissions from motor vehicles; and WHEREAS:. local governments use these funds to meet their obligations under the California and the federal Clean Air Acts; and WHEREAS, the local government air quality programs that have been implemented using these funds have resulted in the cost-effective reduction of air pollutant emissions; and WHEREAS, the Legislature has sought to use these funds to pay for new air quality programs; now, therefore, be it RESOLVED, by the General Assembly of the League of California Cities assembled in Annual Conference in Anaheim, October 15, 1996, that the League continue to oppose legislation redirecting the funds authorized by section 44223 of the Health and Safety Code, which are currently used by local governments for locally-based air quality programs. 10. RESOLUTION RELATING TO URBAN FORESTRY PROGRAMS Source: Los Angeles County Division Referred to: Environmental Quality Policy Committee WHEREAS, the urban forest is a vital infrastrUcture system, essential to the quality of life in the urban environment; and WHEREAS, appropriate urban forest planting provides areas of natural environment, cleans the air and water, reduces the "heat-island effect," and abates storrnwater runoff and erosion; and WHEREAS, the urban forest safeguards and enhances property values, securing and encouraging public and private investment; and 10 '- WHEREAS, local governments have successfully leveraged local and state funds, such as those available through the Environmental Enhancement and Mitigation Program, to promote urban forestry, enhance urban neighborhoods, support community organizations, and provide jobs and job training; now, therefore, be it RESOLVED, by the General Assembly of the League of California Cities assembled in Annual Conference in Anaheim, October 15, 1996, that the League strongly support community urban forestry programs and continued state funding mechanisms, such as the Environmental Enhancement and Mitigation Program, to ensure that the urban forest is properly maintained and enhanced. · 11. RESOLUTION RELATING TO BROWNFIELD DEVELOPMENT Source: Los Angeles County Division Referred to: Environmental Quality Policy Committee and Housing, Community, and Economic Development Policy Committee WHEREAS, the development of abandoned industrial and commercial areas is critical to increasing municipal revenues and improving the quality of life for many communities; and WHEREAS, brownfields, which are abandoned, idled, or under-used industrial and commercial facilities wherever located where expansion or redevelopment is complicated by real or perceived environmental contamination, are impediments to fully utilizing these areas; and WHEREAS, local governments have limited fiscal ability to encourage private industry and public entities to fund environmental assessment and clean-up activities at these brownfields; and WHEREAS, in 1994 the League adopted Annual Conference Resolution #20 relating to recycling inner city property brownfields, which dealt primarily with federal solutions; now therefore, be it RESOLVED, by the General Assembly of the League of California Cities assembled in Annual Conference in Anaheim, October 15, 1996, that the League continue to support state and federal legislation that would create additional fiscal resources, including, but not limited to, local governmental authority, grant programs, revolving loan funds, and tax relief to encourage private industry to invest in brownfield development. 11 Resolutions Referred to Committee On Public Safety Resolution #7 Referred also to COmmittee on Public Safe!~y (See Community Services section). 13. RESOLUTION RELATING TO FIRE EXTINGUISHERS Source: Los Angeles County Division Referred tO: Public Safety Policy Committee WHEREAS, stored pressure dry chemical fire extinguis, hers are required to be serviced and recharged on an annual basis; and WHEREAS, forty-eight states, acknowledge six years as the standard frequency for servicing and recharging stored pressure dry chemical fire extinguishers; and WHEREAS, fire inspectors and businesses would save time and money if stored pressure dry chemical fire extinguishers were serviced and .recharged ona less frequent but still adequate schedule; now, therefore, be it RESOLVED,, by the General Assembly of the League of Cali'fomia Cities assembled in Annual Conference in Anaheim, October 15, 1996, that the League support legislation that would amend the State Fire Code to require stored pressure dry chemical fire extinguishers to be serviced and recharged every six years or after each use, whichever occurs first. Petitioned ReSolutions 15. INITIATIVE RESOLUTION RELATING TO RESTORATION OF LOCAL PROPERTY TAX REVENUES Source: Cit¥of San Jose WHEREAS, local government is the level of government that is clOsest to the people--providing services that are essential to maintain safe, healthy communities and a strong local economY; and WHEREAS, i[n 1992 and 1993, the Governor and Legislature balanced the state budget by diverting $3.6 billion in property taxes from local governments through the Educational Revenue Augmentation . Fund (ERAF); and WHEREAS, these transfers recur every year, draining $3.6 billion from cities~ counties, and special districts annually, plus any growth these revenues accrue over time; and WHEREAS, both the California economy and state revenue streams are now showing rapid growth, yet the Governor and the Legislature once again balanced the state budget for FY 1996-97 by taking over $3.6 billion from local governments; and WHEREAS, the loss of property tax revenues has a severe impact on vital local services such as law enforcement, fire protection, infrastructure maintenance, libraries, and safety net programs; and WHEREAS, the property tax losses diminish local govemments' ability to support and sustain new development, because the revenues generated often cannot cover the costs of new services and infrastructure; and WHEREAS, the ERAF transfers impair economic growth by draining funds away from local economic development strategies, infrastructure improvements, and other essential services that help to attract and retain businesses and highly-trained workers in California's communities; and WHEREAS, local govemments supported AB 2797, AB 1934, and other bills in the 1995-96 Legislative Session that would have returned property tax dollars back to local communities, and while AB 2797 and AB 1934 were approved by the Legislature with overwhelming bipartisan support, the Governor recently vetoed both bills; and WHEREAS, immediate action of this issue is critical to sustain strong economic growth and to halt the further deterioration of our communities; now, therefore, be it RESOLVED, by the General Assembly of the League of Califomia Cities assembled in Annual Conference in Anaheim, October 15, 1996, that the League support legislation that will: 1. Completely reverse the ERAF property tax shifts on a gradual, annual basis, and return these property taxes back to all local governments in proportion to their losses; 2. Freeze the amount of the ERAF property tax shifts to allow local governments to keep the revenue growth that accrues over time, and prohibit the use of ERAF dollars to fund the state's obligation to special education programs; 3. Restore local property taxes while recognizing the state's constitutional obligation to schools under Proposition 98. 16. INITIATIVE RESOLUTION RELATING TO DISASTER ASSISTANCE Source: City of Fort Bragg WHEREAS, the Robert T. Stafford Disaster Relief and Emergency Assistance Act (PL 93-288) provides for federal assistance to local government for the repair or replacement of roads, streets, bridges and other public facilities following a presidential declaration of a major disaster; and WHEREAS, the Stafford Act also provides for assistance to local government tbr projects which may protect public facilities from the effects of similar disaster events; and WHEREAS, California cities and counties have experienced damage from natural disaster occurrences including earthquakes, fire and severe storms; and 13 WHEREAS, because of the geologic configuration of California, much of the transportation system within and serving C. alifomia cities are located adjacent to geologic features that are susceptible to major earth movement as a result of major natural disaster occurrences; and WHEREAS, the California Office of Emergency Services (OES) and the Federal Emergency Management Agency (FEMA) are responsible for the administration of state and federal disaster relief programs; and WHEREAS, following the 1994 and 1995 major storm disasters affecting Califomia, OES and FEMA approved projects for the repair and replacement of public roads, streets, bridges and railroads damaged as the result of flooding and earth movement; and ~WHEREAS, in November, 1995, FEMA issued a new Landslide Policy that prohibits the use of federal disaster ~sistance funds for the repair or replacement of public facilities damaged by a landslide unless the site is first stabilized at local government expense; and WHEREAS, this new policy has been applied retroactively to projects undertaken to repair damage from the 1'994 and 1995 storm disasters, resulting in deobligation of funds already expended or committed and the halting of needed repair and mitigation work; and WHEREAS, such practice by FEMA has resulted in significant economic harm to local agencies and communities afflicted by the disaster events, and to private businesses contracted to undertake repair and restoration work: and WHEREAS, the development of said Landslide Policy could form the basis for establishing additional'.exclusions from federal disaster assistance, and said policy is discriminatory to Califomia in that it does no~ address disaster events that result in recurring damage to public facilities in other states (i.e., hurriCanes; tornadoes, etc.); now, therefore, be it RESOLVED, by the General Assembly of the League of California Cities assembled in Annual Conference in Anaheim, October 15, 1996, that the League call upon FEMA Director James Lee Witt and President Bill Clinton to withdraw the Landslide Policy, restore deobligated funds for repair to public facilities d~amaged in the 1994 and 1995 storm disasters, and authorize additional funding to complete repairs, replacement and construction o'f mitigation measures associated with public facilities damaged in said disasters. Policy\acres\final96 14 1995 Annual Conference Resolutions Implementation Report November 1996 Res. # Title Required Action Status 2 Land Movement Liability SuppOrt legislation that will severely limit the financial recovery No legislation was introduced this year. available for geologic incidents and statutorily protect the validity of Geologic/Coils Hold Harmless Agreements. 3 Judicial Elections Develop policy or legislative direction to support the efforts of the Completed preliminary discussions Secretary of State to provide background information in judicial with Secretary of State's office. Will elections, and through policy committee further address the issue of continue to monitor as Secty. of State requiring either a ballot statement or other qualifying information implements program. relative to incumbents' biographical, professional, or legal background in addition to the year or administration of appointment or elevation. 4 Policy Development Modify League policy development process as follows: (1) Adopt Worked with Parliamentarian to Procedures procedural changes ensuring that Annual Conference Resolutions are implement quorum procedures at determined by a majority of a quorum of voting delegates representing Annual Conference, consistent with the member cities attending the conference. A quorum shall be defined rules for conducting bUsiness session. as a simple majority of delegates representing the total number of Packets for policy committees continue member cities attending the conference. (2) When it appears that a on earliest possible mail schedule. quorum does not exist, the chair may be required to enshre that appropriate representation of cities is present before business is conducted. (3) Take all reasonable steps necessary to ensure that League policy committee members receive agendas and background information on general policy issues in a timely manner to enable department and division representatives to seek and receive feedback from their respective members prior to committee meetings. 6. Creation of New Divisions; Amend bylaws to dissolve the current Inland Empire Division and create New division, "Riverside County" Bylaws Amendment two separate divisions, namely the Inland Empire Division and the created at 1995 Annual Conference. Riverside County Division. Res. # Title Required Action Status 7 Gang Suppression Funding Sponsor legislation to amend Calif. Penal Code, Chapter 3.5 Gang League-sponsored AB 3365, signed Violence Suppression, Section 13826.6 to include the role of public into law, Chapter 561, Statutes of parks, recreation, libraries, and community services departments, 1996. allowing these agencies to be eligible to seek financial and technical assistance to support gang suppression activities. 8 PERS Part-Time Employee Oppose'efforts to unreasonably restrict the home rule authority 0fcities AB 2400 signed into law. Chapter Policies to hire, classify and compensate part-time employees.and ~to mandate 1164, Statutes of 1996. that cities enroll such employees in PERS benefit programs. 9 Employment Training Support: Development and implementation of coordinated strategy to No action. Congress working on improve employer and job seeker to federal, state and local employment federal legislation. Will continue training resources; federal and state initiatives augmenting local work to work on issue in 1997. force development; capitalize on existing job training systems by designating Private Industry Councils and Chief Elected Officials to be leading mechanism for development and delivery of training services to youths and adults; development of "one-stop-shopping" for employer and .job seekers; broaden definition of eligibility. 11 Residential Care Facilities Sponsor and support, individually and with NLC, federal legislation and League has actively supported seek administrative guidance from the Department of Justice to permit SB 1690 (Kopp) and HR 2927 cities to exercise review and land use regulation of residential care (Bilbray) regarding land use facilities, Specifically the number of facilities located within a specifiedregulation of residential care distance from one another, and the maximum occupancy load based on facilities and encouraged California existing zoning and density standards, cities to support this measure. Governor vetoed SB 1690 and HR 2927 failed passage. 2 Res. # Title Required Action Status 13 Community Development Support full funding of the CDBG at $4.5 billion and the HOME League supported NLC efforts to Block Grant and Home program at $1.4 billion, which will help support the families in our maintain CDBG funding. Program Funding communities towards self-sufficiency, continue affordable housing that is safe for our children, and promote a better economy for our cities. 15 . Redevelopment Authority Support legislation that broadens and makes uniform existing authority Supported AB 2736 - Signed by to create new redevelopment project area encompassing (a) closed Govemor, Chapter 221, Statutes of military bases, (b) materially downsized military bases, (c) federally- 1996. AB 3002 - died in owned defense manufacturing facilities, (d) privately-owned committee. AB 3060 - died in manufacturing facilities primarily used for defense manufacturing over committee. SB 1640 signed by an extended period that have been vacated; (e) other privately-owned Governor, Chapter 627, Statutes of support and service facilities devoted to defense industry, and (f) 1996. ~ adjacent vacant or underutilized lands. 16 Use of Photo-Radar Support legislation to authorize traffic enforcement agencies to issue No legislation on this issue Equipment speeding ticket citations by mailed notice when using photo-radar introduced. enforcement equipment. 19 Parole of Violent Offenders Support legislation to accomplish the following: (1) Amend Penal Code Supported AB 2868 (Kuykendall), to extend and require a period of parole for violent offenders. Parole which failed passage. period shall be the remainder of inmate's life. However, if person has been on parole continuously for seven years since release from confinement, Board of Prison Terms can discharge person from parole unless there is good cause to retain person on parole. (2) Amend Penal Code to require violent offenders undergo psychological evaluation prior to release to determine extent of counseling that may be mandated as condition of parole. (3) Amend Penal Code to require all violent offenders to register as violent offender with law enforcement agency in city where they live. Requirement shall be in effect for remainder of inmate's life, so long as inmate resides in California. (4) Amend Penal Code to make it a felony to willfully fail to register as violent offender with local law enforcement agency. (5) Provide funding for any costs to local governments associated with proposed amendments. Amendments shall not be applied retroactively. Res. # Title Required Action Status 22 Possessory Interest Tax Support legislation to exempt from possessory interest taxation public SB 1737 (Alquist) signed by .use facility clients who occupy convention and cultural facilities where Governor, Chapter 570, S_tatutes~_of_ .................. the assessed v~du~' 6f their 156sSe~;ion 6f'~;hch facility'is $50~000-0r [e~ .... 1996." - per twelve'month Period. 24 Reallocation 0fTraffic Fines Sponsor legislation that will repeal AB 544 (Isenbere~. and reallocate Adontecl h~, h,,d.~t ~.,.~C fines generated through traffic enforcement efforts to the respective committee and included in AB 2553 municipalities whose enforcement efforts generated those fines by the (Isenberg), whiCh failed passage. distribution formula existing prior to 1991. Will seek legislation again next year. 27 Tax on Gasoline and Urge State Legislature to reevaluate the Current level of tax on Copy of resolution sent to Petroleum Products for gasoline and petroleum products for transportation purposes. Urge appropriate state officials. Met with Transportation Purposes Legislature to consider a graduated increase to the gas tax levels to legislative staff to support a address the increases in population and costs faced by local graduated increase of gas taxes to governments since the last increase to maintain a proportional level of address proportional needs. tax collections was originally established in 1963. Send copies of this resolution to Governor Wilson and ali members of the State Legislature. 30 Protecting Transportation Oppose any legislation that would divert TDA funds for non- Successfully defeated AB 2084 Development Act Funds transportation purposes. (Richter), which would have allowed for the diversion of TDA funding to county general fund. 4 Res. # Title Required Action Status 31 Homeowners and Support legislation and regulatory action that advances the following Legislation passed enacting Earthquake Insurance principles: (1) The delinkage of earthquake and homeowners insurance California Earthquake Authority; should only occur after state and/or federal natural disaster insurance pools Signed by Governor, Chapters 967, are established to provide affordable and adequate earthquake coverage. 968, and 969, Statutes of 1996. (2) Basic catastrophic coverage should be provided to restore a home's habitability, and that such basic coverage should be available with minimal deductible and without any cap on insured value. (3) All insurance companies offering any type of insurance in California should be required to pay an assessment to the statewide catastrophic insurance pool to ensure its continued viability. (4) When setting rates and determining risk, insurance companies should be required to take into account the existence of local programs to upgrade emergency infrastructure and/or to reduce fire fuels such as wildland brush in public open space and overgrown vegetation within household perimeters in compliance with local and state fire codes. (5). Non-renewals of insurance should be subject to the same restrictions as cancellations, and that these principles should be clearly outlined in the legislation and that insurance companies should be required to maintain existing homeowners' policies as long as policyholders meet the underwriting guidelines specified in the legislation. Work on negotiations with The League is to call upon the State Legislature and Insurance insurance companies postponed. Commissioner to resolve the crisis in the availability and affordability of homeowners insurance in order to protect the state economy and the safety and well-being of all California property owners. Create a task force of the Public Safety Policy Committee to work with cities, the Insurance Commissioner and the industry to develop standards for eligibility for risk reduction credits in the homeowners insurance rate, and to develop and promote model risk reduction programs for cities that will qualify their homeowners for the reduced rate structure. League, through NLC, to support enactment of these principles in federal natural disaster insurance pool legislation currently before Congress. 5 Res. # Title Required Action Status 32 Limiting thc Number of League policy be amended so that the President of the League should be Resolution implemented folloWing presidential limited to seven (7) appointments per committee, their term shall run 1995 Annual Conference. Appointments to League concurrently with the President's term, and the Division appointments to Committees committees should be increased to two (2) per Division to provide greater divisional representation. 33 Government Financing Support legislation that prohibits the state or any county from keeping, Supported AB 2379 (Margett), which redirecting, withholding, or in any other manner augmenting its own addressed these issues. Failed revenues by taking tax or other revenues from another jurisdiction without passage. the consent of the other jurisdiction. And all such loans must be repaid with interest by the actual borrower. 34 Children, Youth, and The League and ILSG be the catalysts to mobilize like-minded The Community Services policy Families organizations and resources to share experiences, enhance the capacity of committee held a training session, cities and others to support positive youth development, and support the had speakers from successful efforts leadership in cities to find creative ways to build the best possible future for at collaboration, and distributed children and society, write-ups of multiple examples. Professional training on critical viewing of the media provided to committee and Executive Forum and Annual Conference 1996. Resolution developed on critical viewing, adopted by 1996 General Assembly. AB 3365 (Campbell) enacted making community services programs eligible for gang suppression funds. 35 Vector Control Boards Support and sponsor legislation permitting city council or other public Legislation enacted. Chapter 115 - officials to also serve as Trustees for mosquito and vector districts. Statutes of 1996. Policy\95resimp ==mw League of Californi,a Cities ~l/~. / 1400 K STREET · SACRAMENTO, CA 95814 (916) 658-8200 California Cities Work Together RESTRUCTURING THE ELECTRICITY SERVICES INDUSTRY Status Report and Summary of AB 1890 (Brulte) November 1996 'INTRODUCTION On September 23, 1996, California enacted landmark, legislation to restructure the electricity services industry when Governor Pete Wilson signed AB 1890 (Brulte -- Chapter 854, Statutes of 1996). The signature of AB 1890, which passed the Legislature unanimously, culminated over 100 hours of hearings of the joint Senate-Assembly conference committee during the last two weeks of the legislative session in August. The open hearing process permitted all parties interested in electricity restructuring issues, to participate directly in the hearings, comment on proposed language, and recommend changes. The League participated in those hearings and testified as appropriate. AB 1890 generally meets the policy guidelines and subsequent policy positions adopted by the League to guide its participation in the ongoing restructuring debate. In general, the provisions of AB 1890 are consistent with the basic structure contained in the December 1995 ruling issued by the California Public Utilities Commission (PUC) proposing to restructure the California electricity services industry. However, AB 1890 contains detailed technical and policy elements not covered in the PUC's ruling, and provides direction to the PUC in a number of areas. (A previous League publication summarized the December 1995 PUC ruling. It is available from the League upon request.) WHAT IS ELECTRICITY RESTRUCTURING? Although the League has prepared and distributed prior publications describing electricit3' restructuring in detail, a brief summary is provided here. The concept of electricity restructuring is based upon the goal of reducing electricity prices in California. While the transmission and distribution segments of the system generally will remain owned and operated by the existing investor owned utilities (IOU) and regulated by the PUC, the existing monopolistic generation segment will be opened to competition. Individual users will no longer be required to purchase their electricity from their current IOU. Rather, users will have the option of staying with their existing IOU or buying power from an outside generator tbr a price negotiated 'between the seller and riser. If a user stays with his or her existing investor owned utility, the utility's price will be [he price resulting ti'om a "pool arrangement". That is, the IOU will purchase its electricity from power pool into which electricity is bought and sold in a manner like a commodities market. If a user buys from an outside seller, through "direct access", he or she will by- pass the power pool and negotiate the price directly with the seller. Restructuring also envisions the opportunity for individuals or organizations, such as cities, to act as "aggregators" or "brokers" who xvould combine multiple electric loads and buy power through "direct access" transactions on behalf of a group of users. For example, a city could be an aggregator for its own municipal facilities, or on behalf of all or some of its citizens. The premise behind aggregation is that an aggregator can negotiate a better price than an individual residential customer or small business owner acting alone. A city could be an aggregator for its own facilities or the entire community, or join with a group of cities within a region to aggregate diverse municipal or community loads. The decision of whether or not to be an aggregator and whether or not to participate in an aggregated pool would be voluntary. Currently, a number of cities, individUally and collectively, are exploring aggregation options for their municipal facilities and operations and/or businesses and residents. Similarly, various statewide groups are exploring aggregation for specific municipal systems, sucla as streetlights or water agencies. Another key element of restructuring is the ability to send electricity over existing power lines (called "wheeling") from one place to another in an unrestricted manner. For example, a clity that generates electricity at its sewage treatment plant may wish to' wheel the excess power beyond that used to run the treatment plant to city halI. Or, a City may wish to buy cogenerated electricity from a manufacturing plant within (or outside) the city and wheel the power from the plant to city hall, the library, and the community. center. The impacts of electricity restructuring on cities will depend upon the type of city. For example, whether the city is small, large, rural, urban, with orwithout existing alternative generation capacity, or with or without a municipal utility will greatly impact how restructuring impacts that city. SUMMARY OF AB 1890 AB 1890 moves Calif0mia to a completely competitive e. lectricity generation market, through a phase-in of direct access, beginning no later than January l, 1998 and concluding with all customers having a direct access option by December 31, 2001. Daring this transition period, investor owned utilities will be permitted to recover their stranded inw.~stments or costs through the imposition of a non-bypassable "competition transition charge" (CTC) that will be applied to all electricity customers. During the transition, the CTC will be included within a rate freeze imposed by the measure. At the end of the transition period, the CTC will nc) longer be included in the rates and electric rates are anticipated to decrease. Because the CTC is non-bypassable, a city cannot avoid paying the CTC through ann.?xation, incorPoration or l'brming a municipal utility. Rates ibr industrial, agricultural, and large commercial customers will be frozen at their June 1996 levels until IOUs recover their stranded costs, or until March 31, 2002, whichever comes first. The new law prohibits rate shilling among customer classes and xvithin generation, distribution and transmission segments of the rates. It should be noted that after the transition to a competitive market is complete in 2002, generation rates will not be regulated. During and after the transition, distribution and transmission rates will continue to be regulated by the PUC. AB 1890~ establishes a "fire wall" between residential and small commercial (RSC) customers and other electricity users (i.e., industrial and larger commercial). Residential and small commercial customers are defined as those with less than 20kw of peak power demand. Like other users, their rates will be frozen at their June 1996 levels until January I, 1998, when they will be reduced by 10 percent. RSC rates are expected to decline by another 10 percent in 2002. The first 10 percent rate reduction will be achieved by financing a portion of the RSC customer's share of the CTC paid to the IOU through 10 year bonds issued by the State Infrastructure and Economic Development Bank. Thus, the RCS share of the CTC will be spread over a longer period ot:' time than the CTC paid by other users. AB 1890 provides a limited number of CTC exemptions, including certain self'- ' generation projects, some irrigation districts and others. Municipal utilities, which are covered in AB 1890.,. but remain outside the PUC's regulatory authority, also are provided the authority to recover their stranded investment costs through a CTC, if they meet certain conditions. (The effects of AB i St)0 onmunicipal utilities is discussed below.) AB 1890 establishes an Independent System Opermor (ISO) and Power Exchange (PX). The ISO is intended to ensure system reliability. Language creating the ISO was drafted for AB 1890 subsequent to the August 1996 power blackout which underscored the importance of system reliability in any restructuring proposal. The PX will operate like an open and transparent commodities market where power producers will compete to sell their generation. The ISO xvill provide all market participants non-discriminatory access to the transmission system, while maintaining system security and reliability. AB 1890 includes provisions to continue funding tbr public benefit and environmental ' programs through a non-bypassable rate component of distribution services during the transition period ending December 31,200 l. AB 1890 includes specific authorization for individuals, businesses and local governments to participate in a competitive m,'u'ket through phased-in direct access. The law also contains very strict consnmer protection provisions to educate consumers and protect them l:rom %lamming" or being switched to . another provider without their consent. SPECIFIC ]ELEMENTS OF INTEREST TO CITIES Aggregation: AB 1890 clearly and unambiguously authorizes cities to become aggregators for their own municipal loads or for the residential and business customers within their jurisdictions who wish to join the aggregation pool. The new law defines an aggregator as "... any marketer, broker, public agency, city, county, or special district, that combines the loads of multiple end-use customers in facilitating the sale and purchase of electric energy, transmission, and other services on behalf of these customers." The measure states that "Aggregation of cUstomer electrical loads shall be authoriZed by the commission [PUC]for all customer classes, including, but not limited to small commercial or residential customers. Aggregation may be accomplished by private mi~rket aggregators, cities, counties, special districts or on any other basis made a~ailable by market opportunities and agreeable by positive written declaration by individual customers." Customers who wish to participate in aggregation must do so by a positive written declaration. If no such positive declaration is made, the existing utility shall be the provider of service. (See Consumer Protection section for more information.) The bill also states that "Ifa public agency seeks' to serve as a community aggregator on behalf of residential customers, it shall be obligated to offer the opportunity to purchase electricity to all residential customers within its jurisdiction." Thus, if a city wishes to a~gregate the residential customers within its boundaries, it may not only offer the'service to,one portion of the residential community, but must offer it to all residential cUstomers. H~wever, the same requirement does not apply to cities that wish to offer aggregation to the commercial or industrial sectors of the community. Many cities are exploring the aggregation potential of working initially With several large industrial users, with the hqpe of expmnding the aggregation opportunities to other users in the future. The League made the po/int during the AB t 890 conference committee process that legislation that requires potential city-aggregators to immediately offer aggregation citywide and to all customers would restrict the ability and number of cities capable of becoming aggregators. Direct Access:' Like the PUC's December 1995' ruling, AB 1890 provides for a phase-in of direct access opportunities, beginning no later than January 1, 1998, and efiding no later than January 1, 2002. A direct transaction is defined in the law as: "..'.a contract berween any one or more electric generators, marketers, or brokers of electric power and one or more retail customers providing for the purchase and sale.of electric· pOwer or any ancillary services." Direct access is to begin simultaneously with the start of the Independent' SYstem Operator and the Power Exchange. The PUC is directed to develop a phase-in schedule 4 at the conclusion of which all customers shall have the right to direct access. The phase- in is to be "equitable to all customer class and accomplished as soon as practicable, consistent with operation and other technological considerations. "A customers will be eligible for direct access regardless of any phase-in schedule if at least one-half of his or her electrical load is supplied by energy from a renewable energy provider. If any customer does not designate another provider, the existing electricity provider (i.e., the IOU) will continue to provide the service. While the PUC's December 1995 ruling proposed a five year direct access phase-in, AB 1890 requires a/bur year phase-in. The criteria and requirements for customer class phase-in eligibility, such as the total load capacity or individual load capacity, have not yet been determined. It is expected that the ongoing 'PUC working group process will provide input to the phase-in criteria adopted by the PUC. Consumer Protection: AB 1890 includes very strict consumer protection standards designed to educate consumers about their options in a restructured system and protect residential and small commercial customers fi'om slamming and fraud. For small commercial customers, no change in electric service provider may be made by a utility, person, firm or governmental agency until one of four types of verification actions have ' been completed (i.e., independent third-party verification, receipt 'of written confirmation, etc.). For residential customers, no change in the aggregator or provider of electric service may be made xvithout confirmation by an independent third-party verification company that meets specified criteria. As a whole, these procedures are based upon consumer protection statutes applicable to the telecommunications industry. The law also requires limited but important oversight of electricity marketers and others who sell power to consumers. Any person or entity that wishes to' sell power to retail customers but is not regulated by the PUC, such as any power broker or local government acting as a power broker, must register with the PUC, provide specific customer infbrmation and education services as part. of offering its service, and'be subject to specific claims and damages procedures. Municipal Utilities: Under existing law, municipal utilities are not regulated by the California Public Utilities Commission. Rather, they are regulated by their individual governing boards, which in the case of a city municipal utility, is the city council. AB 1890 maintains this separate regulatory structure. The law establishes a procedure municipal utilities must fbllo~v to decide whether or not to offer direct access options to customers within their service boundaries. Municipal utilities must decide by the year 2000 whether to offer direct access, and it' they decide to do so, must complete any phase- in by 2010. Under the terms of the legislation, municipal utilities are also authorized to collect a competition transition charge from customers who leave their system to recover their stranded investment costs. However, for a municipal utility to be eligible to coilect its CTC for customers who leave the system, it must open its electric markets to competition (i.e., direct access). Doing so Would provide opportunities for other power suppliers to provide electricity to customers within the municipal utility's jurisdiction. In addition, AB 1890 includes provisions that allow municipal utilities to fully participate in developing the terms of the ISO and Power Exchange. While IOUs are required to provide an immediate 10 percent rate reduction for residential and small commercial customers and to freeze customer rates, the same requirements do not apply to municipal utilities. However, the rates of municipal utilities traditionally have been lower than those offinvestor owned utilities. WHAT AB 11890 DOES. NOT INCLUDE From a local government perspective, AB 1890 is notable for what it does not do. It does not place municipal utilities or municipal aggregators under PUC jurisdiction. It does not restrict~ the ability of new municipal utilities to form or existing municipal utilities to operate. It does not restrict the ability of cities to become aggregators and sets the same .criteria for cities to serve as aggregators as other potential aggregators. 'Finally, although the issue was raised several times during the conference committee hearings, AB 1890 does not resu'ict the ability of municipal utilities or cities that'become aggregators to transfer revenue to their general funds. AB 1890 does require municipally oWned electric utilities to annually report on the customer's bill the amount of revenue to be transferred to the city's general fund. OTHER RESTRUCTURING ISSUES OF INTEREST TO CITIES ' AB 1890 does not cover several issues of interest to cities. These local government issues are addressed, in existing law or agreements and were not appropriate for incluSion in AB 1890. Because the League continues to receive questions about these issues, we are rePeating information included in prior League pnblications on electricity restructuring. ~ Fram:hise Fees and Utility_ Users' Taxes: Neither the PUC December ruling nor AB 1890 directly impact the ability of cities to charge and collect franchise fees and uti!ity users' taxes. Some cities have inquired about the ability of cities to capture these revenues under a "deregulated" or "competitive" market, in which users may no longer pul'chase their power from the existing investor owned utility. For franchise fees, this sh6uld not be a probleTM, due to enactment in 1993 of SB 278 (Chapter. 233, Statutes of 1993). SB 2578 addresses the '.'unbundling" of natural gas prices by adding a surcharge that all gas suppliers must pay to local governments that is eqUivalent to a local government fi'anchise fee. The' legislation includes electricity suppliers as well, thus providing a level playing field for all gas and electricity suppliers and. a continued revenue source ~br local governments. Section 1 of SB 278 states the Legislature's intent very clearly. "In enacting this chaPter, the Legislature finds and declares that changes in the public utility regulatory environment .have inadvertently provided for the potential erosion of the fi'anchise fee ba~e upon which local government has become quite dependent~/br its financial stability. Further, the Legislature has determined that there existx the possibili.ly that these same regulatory changes may not ensure equitable treatment between customers purchasing gas or electricity from a utili(y and customers purchasing gas or electricity.from other sources. Therefore, the purpose o. f this act is'lo provide protection.for the financial integrity of local government and to ensure that all customers purchasing gas or electricity who transport gas or eleclriciO, on transmission systems that are s,th/ect to a ./kanchise agreement share equitably i~ the burden o./'compensating local government ]br the private use of public lands" City attorneys who have examined the issue of utility users' taxes suggest that the ability of a city to a collect utility users' tax in a restructured or competitive market, should not be negatively impacted, as long as the city's utility users' tax ordinance is properly drafted to reflect the new competitive market. They suggest reviewing local ordinances and making changes as appropriate. It is important to remember that the existing investor owned utilities will continue to own and operate the electricity 'distribution systems within cities they serve. And, it is anticipated that they will continue to provide billing services'to users, even if an individual user purchases electricity from a non-lOU provider. This process should enable cities to monitor and collect fi'anchise tees or surcharges and utility users' taxes. (It should be noted that the PUC has already received some requests to "unbundle". distributions services. Consequently, at some time in the future, billing services may be provided by companies other than the existing investor owned utility.) Based upon the information available to date, it appears that electricit3, restructuring should not directly impact franchise fee and utility users' tax revenue received by cities. However, in reality at the end of the transition period, when.the CTC is no longer included within electrical rates, total revenue ma3, indirectly be impacted, if the goal of : restructuring, to lower energy costs in California, is realized. Specifically, if electricity prices do drop significantly a~er the end of 2001, total city revenue from franchise tees utility users' taxes could decline when the impact of'competition ('lower prices) and the end of CTC come into play. Because of the cmnpleXity of the issue, the League will continue to study this issue carefhlly. Utility_ Undergrounding: AB 1890 does not address the issue' of utility undergrounding, a subject of significant interest and importance to local governments. However, as noted in a prior League publication, the PUC's December 1995 ruling contains a straight/brward statement about its intent to retain the utility undergrounding program within its regulatory authority. The PUC ruling states that if undergrounding becomes "...discretional.. [iii co~dd be expected to be eliminatedji'o~n the t.ttilities' planned expenditztres in a competitive ~arketplace. It is also a program that the cities and counties ~?i"Cal~fornia rely ~pon ~s ?art OiQheir'locat itnprovement ~/Jbrlx. '['his undergrounding activity remains an appropriate acliviO, O['the regulated tttilio.,, m)t xubiect to competition, and therq[i~re xhottM be collected thro~tgh ceg~tlated ulilio, rate.s'. " The League will continue to monitor this issue and work with the PUC and investor- owned utilities as necessary to_ensure the continuation of the Rule 20A .undergrounding program. .. Who's Doing What?: In March 1996, the League prepared a summary of efforts by 'cities and other municipal groups to evaluate potential aggregation options. We are attaching that summary to this document. Since its distribution, a number of other cities, acting individually or collectively, have begun to evaluate aggregation opportunities. Cities that are,' not included in the March report, but are evaluating their options, are encouraged to contact the League so: that we may include a description of their efforts in the revised version of "Who's Doing What in the Local Government Aggregation Arena?" ~ Future League Activities: The League will continue to monitor the evolving. restructuring debate and participate as appropriate. In particular, we anticipate clean-up legislation during the 1997 legislative session. In addition, the League will continue to prepare and distribute written information as significant restructuring milestones occur and will continue to offer training and educational workshops:at League meetings. Note: This report was prepared by th'e League of California Cities. It benefited, in part, from Written' documents summarizing AB 1890 prepared by the Northern California Power Agency, New Energy Ventures, Pacific Gas and Electric Company, and Southern California Edison Company. "' 1890sum.doc 8 League of Californi,a Cities ~~.. ~' 1400 K STREET · SACRAMENTO, CA 95814 (916) 658-8200 California Cities ~ Work Together WHO'S DOING WHAT IN THE LOCAL GOVERNMENT AGGREGATION ARENA? An Incomplete Summary of Statewide Activity March 1996 The Calitbrnia electricity restructuring debate has stimulated interest by a variety of public and private groups that want to pursue the concept of aggregation. While 'it is not possible to provide an inclusive list, this summary is an attempt to provide intbrmation on various local government activities underway. It is not intended to be a complete list and no guarantee of its accuracy is implied. Readers are encouraged to contact representatiVes of the various cities or groups referenced to obtain more detailed information. For the purposes of this summary, aggregation is defined as the ability of an end user of electricity to combine his or her electrical loads with the goal of negotiating the best purchase price fur electricity service. Under an aggregated load, a'supplier could be the existing utility or another provider who supplies the electricity through a bilateral contract. Municipal aggregation refers to aggregating the local government loads (i.e., local government operations such as city · hall, street lights, water, sewer systems). Community aggregation refers to aggregating the municipal loads, as well as the residential and business loads within a city. In some cases, at this time it is not known which type of aggregation the ci~ or group is exploring. The League plans to update this summary periodically. If your city i~nows of other local. governntents or organizations exploring municipal restructuring options, please let Its know so we may add them to our list. MUNICIPAL AGGREGATION Statewide Municipal Aggregation A number of state;vide local government orgmfizations and associations are moving ahead to provide opportunities fbr their members to participate in statewide municipal aggregation. programs. Participation in such programs would be voluntary. ,, Califbrnia Streetlight Association (CAL-SLA): CAL-SLA is exploring the possibility.a statewide aggregated purchasing pool to purchase electricity to run streetlights. Since streetlights use energy in the off-peak period, they may have a bm'gaining position for receiving reduced rates. · School Districts: School districts in Califomia are exploring the possibility ofa statewide purchasing arrangement to aggregate the K-12 schools in California. · Association of California Water Agencies (ACWA): ACWA is forming a JPA for those water districts and agencies that wish to participate in an aggregated system. Since ACWA members include not only city water agencies, but water districts that provide municipal and irrigation services as well, the JPA could be a municipal aggregator that consists of a large number of participants. Regional Municipal Aggregation · Association of Bay Area Governments (ABAG): ABAG is exploring the.potential Of aggregating the municipal loads of the city and county members within the ABAG area. Participation in the ABAG system would be voluntary. · Coachella Valley A~sociation of Governments (CVAG): CVAC, which consists of the nine cities of Desert Hot Springs, Palm Springs, Cathedral'City, Rancho Mirage, Palm Desert, Indian Well:i, La Quinta, Indio, Coachella and the County of'Riverside, are exploring municipal aggregation for the short term. For the long term, they are interested in community aggregation tbr rdsidential and small business customers. Single Ci_ty Municipal Aggregation · A;number of cities have expressed interest in aggregating their municipal loads. These include San Jose, Oxnard, and Santa Barbara. Other cities may also be exploring their options. ' · Northern Orange County: Several cities in northern Orange County are exPloring the options that restructuring may provide. It is unknown whether they are interested in municipal Or community aggregation or both' or whether they are interested in aCting individually or collectively. COMMUNITY' AGGREGATION · palm Spring~: The City of Palm Springs has been involved developing a community aggregation program within its city, both for municipal loads and its citizens, for a long time. It is interested in pursuing communitY aggregation by working through the Federal Energy Regulatory Commission processi · Southern California Cities Consortium: The Consortium, which includes the cities of C~trson, Culver City, E1 Segundo, Gardena, Hawthorne, Inglewood, Lawndale, Lomita, Redondo Beach and West Hollywood, has been active in exploring the'possibilities of community aggregation for many months. The goal would be an aggregated community load for the ten member cities. HYBRID AGGREGATION Watsonville: The City of Watsonville is in the early stages of exploring the possibility of joining their municipal load with the aggregated loads of the major industrial businesses in their city. This would make them the largest aggregated electrical load in their area of the state, thus putting them, and their bUsinesses, in an excellent bargaining position to negotiate an electricity price. DON'T ~;IGN-UP UNTIL YOU'VE EVALUATED YOUR OPTIONS ~ Depending upon how electricity restructuring is finalized through action by the PUC and the Legislature, local governments will have a variety of options available to them. They may wish to stay with their existing electricity service provider. Or, they may wish 'to explore other options, such as those described above. One message is very clear: don't sign up with the first company or consultant that approaches your city. This includes your existing utility, restructuring consultants that promise a great deal, or outside electricity suppliers that promise the best price. While the first proposal may ultimately be the best deal, you'll never know until you seriously examine the other options available. For example, if your city has no interest in aggregating its municipal load and negotiating a bilateral agreement with an electricity supPlier, then participating in one of the statewide municipal aggregation options may be a good idea for your streetlight or water system. However, if your city decides to explore municipal aggregation for its city operations, you may want to include the streetlights and water system as part of your aggregated municipal load, rather than spin off those systems to the statewide load. Other municipal options can take various forms, such as the following., city/County Aggregation: If your county consists of a variety of small cities, why not consider-aggregating the municipal loads of these small cities, plus the county's municipal load? How about inviting the schools and water/sewer agencies to participate? Public/Private: If yours is a small or medium sized city with a strong surrounding industrial base, you might .want to' consider approaching your business community to combine their aggregated loads with your municipal load. This would put you and the business community in a better negotiating position. If Your city or a city that you know of is involved in community or municipal aggregation, we'd · like to know. Please forward this information to the League's Sacramento Office, c/o Yvonne Hunter. elecopt.doc