We are pleased to report significant progress was made on the County’s legislative priorities during the 2009 Congressional session. As you will recall, we started the year with a new President and much of the federal budget operating on a Continuing Resolution. So while we were preparing our appropriations requests for FFY 2010 funding, our federal advocates from the firm Alcalde & Fay were also working the FFY 2009 appropriations projects to ensure funding was retained for County projects as the measures moved to the House and Senate floors.   
  
Also early in 2010, Congress deliberated upon and passed the American Recovery and Reinvestment Act (ARRA) of 2009, which was signed into law by President Obama on February 17, 2009. This unprecedented economic stimulus package provided $787 billion in federal tax cuts, expansion of unemployment benefits and other social welfare provisions, with increased domestic spending in education, health care, transportation and infrastructure, including the energy sector. Throughout the year, we were advised by Alcalde & Fay on opportunities to participate in the incremental funding opportunities presented by the ARRA.  
  
Returning to the federal budget issues, on March 6, 2009 Congress passed another Continuing Resolution to continuing funding for programs at then-current levels while it continued to debate the FFY 2009 appropriations measures. The House of Representatives had passed the FFY 2009 Omnibus Appropriations bill on February 25, 2009, but the Senate did not pass it until March 10, and it was subsequently signed into law on March 11, 2009. The legislation included earmarks for a number of important projects for Contra Costa County:  
  
• Safe and Bright Futures for Children Exposed to Domestic Violence- $428,000  
• Mount Diablo Mercury Mine Clean-Up– $670,000 (for a nationwide program with Mt. Diablo being the sole project that was singled out by name in any congressional reporting on the legislation)  
• Lower Walnut Creek- $287,000  
• Grayson & Murderer's Creeks- $478,000  
• Pinole Shoal Management (Delta LTMS)- $235,000  
• San Francisco to Stockton Channel Deepening- $1.34 million  
• Suisan Bay Channel/NY Slough Maintenance Dredging- $2.768 million  
• San Pablo Bay/Mare Island Strait Pinole Shoal Maintenance Dredging- $1.058 million  
  
For FFY 2009, the County was able to secure a total of $6,594,000 in earmarks for the County. The two projects that did not receive funding for FFY 2009 were the Mokelumne Trail Overcrossing and the ARIES Integrated Justice Systems.  
  
For FFY 2010 funds, the Administration was very late in presenting its budget to Congress. The Energy and Water Appropriations bill passed the House on July 17, 2009 with the Senate approving the measure on July 29, 2009. Several months were spent reconciling the differences between the respective bills, and the appropriations act was finally signed into law on October 28, 2009. Contra Costa County was successful in having a number of earmarks included in the final FFY 2010 bill:  
  
• Pinole Shoal Management- $100,000  
• Grayson & Murderer’s Creeks- $90,000  
• Calfed Levee Stability Program- $4.844 M   
• San Pablo Bay/Mare Island Strait Pinole Shoal Maintenance Dredging- $2.518 M   
• Suisan Bay Channel/NY Slough Maintenance Dredging- $3.819 M  
  
The County's other requested projects were included in the Transportation/HUD Consolidated Appropriations Act, which passed the House on July 23, 2009. The bill passed the Senate on September 17, 2009 and was signed into law on December 16, 2009. This bill included appropriations for Transportation, Housing and Urban Development, as well as Commerce, Justice & Science, and Labor/Heath and Human Services. This bill included funding for two projects requested by the County:  
  
• Safe and Bright Futures- $550,000  
• Methamphetamine Eradication and Suppression Program- $200,000  
  
Total funding secured for FFY 2010 was $12,121,000. Combined with FFY 2009 funding, the County secured $18,715,000 in federal funding during 2009.  
  
Advocacy for the County's projects is a joint effort of our lobbying firm, Alcalde & Fay, and the efforts of our Board of Supervisors and staff. Each year, it is customary for the Chair and Vice Chair of the Board of Supervisors travel to Washington, D.C., along with the County's Legislative Coordinator, to advocate for projects included in the County’s Federal Legislative Platform. In 2009, the trip was planned to coincide with the National Association of Counties (NACo) Legislative Conference in March. The Vice Chair, however, was unable to attend due to prior commitments. Fortunately for the County, because Supervisor Glover and Dr. Walker were scheduled to be in Washington, D.C. for NACo and other association meetings, they were able to attend some of the advocacy meetings scheduled with our congressional delegation.   
  
Alcalde & Fay arranged and accompanied our County delegation to meetings with the following:

Throughout the year, Alcalde & Fay also worked with Board members and County staff on a variety of other issues and priorities including the following:  
  
• Identification and submission of High Priority Projects for the Surface Transportation reauthorization bill;  
• Identification of projects for the Water Resources Development Act (WRDA) reauthorization bill;  
• HR 1618 regarding limits on size of commercial trucks  
• FEMA/Flood management issues  
• Flood Plain Management Executive Order  
• House hearings on Levee safety  
• HR 2442, Congressman George Miller’s water bill  
• Letter on Disproportionate Share Hospital (DSH) funding  
• Indian gaming issues  
• Introduction to newly-elected Congressman Garamendi  
• Health Care Demonstration project  
• Delta water issues, including the federal MOU between Department of Interior, EPA and other agencies.  
  
Much activity during the last two months of 2009 was focused on the Delta water issues and working with the Delta Counties Coalition. Meetings were scheduled for representatives of the Delta Counties Coalition with the Congressional delegations and other federal agencies during the first week of December with the goal of:  
  
• Establishing a process for the Delta Counties Coalition to engage with the administration and California’s congressional delegation;   
• Securing flood management, water resources environmental, and engineering funding support in the 2010-2011 federal budget and appropriations process;   
• Securing federal support for the local and regional habitat management plans in the five Delta counties;   
• Accelerating federal studies associated with developing fresh water flow standards, storage options and implementing water conservation, recycling, re-use and regional self-sufficiency; and   
• Seeking additional resources for critical infrastructure projects and emergency response projects.  
  
In 2009, there were two major federal initiatives in Congress that had implications for the County with respect to transportation: the American Recovery and Reinvestment Act (ARRA), and the next multi-year transportation reauthorization bill (as yet unnamed). ARRA provided funds for a variety of infrastructure areas including transportation. The County, working through the Metropolitan Transportation Commission, received $10 million in ARRA funds to help finance the first phase of the Vasco Road Safety Improvement Project, which includes construction of a hard median, road widening and extension of a passing lane on a 2.6-mile stretch of Vasco Road where the greatest number of serious accidents has occurred in recent years.  
  
The multi-year transportation reauthorization bill was deferred by Congress until 2010. Early discussions indicated substantial differences of opinion within Congress on how the new transportation bill should be structured, what the funding levels should be, and how to pay for it, given the limitations of the current funding structure (federal gasoline taxes paid by motorists at the pump). The County’s Federal Platform for 2010 includes particular funding requests to be submitted to our delegation for inclusion in the multi-year reauthorization bill, when Congress is ready to resume work on it.  
  
Alcalde & Fay and County staff are currently in the process of preparing appropriations requests submittals for FFY 2011, the deadlines for which are in early February. A trip is also being scheduled for some time in February for the Chair and Vice Chair to advocate for our FFY 2011 projects with our Congressional delegation.

  
Each year, the Board of Supervisors adopts a Federal legislative platform that establishes priorities and policy positions with regard to potential federal legislation and regulation. The 2010 Federal Legislative Platform includes 13 requests for appropriations; 5 requests for the reauthorization of the federal transportation act; and 4 requests for the reauthorization of the Water Resources Development Act.   
  
The proposed 2010 Federal Legislative Platform is included as Attachment A.  
  
Notable changes from the FY 2009 platform include the following:  

3. The ARIES Integrated Justice Systems project was removed from the FFY 2011 list and replaced by the Methamphetamine Eradication and Suppression Program.  
  
4. The list of projects for the reauthorization of the Water Resources Development Act (WRDA) has been revised to add an authorization for the Mt. Diablo Mercury Mine project as well as a multi-county, Delta Counties Coalition project authorization for the Army Corps of Engineers to upgrade the Levees in the Delta as part of an overall system, rather than on a county-by-county or island-by-island basis.  

5. The Policy Positions have been revised to reflect current information from staff. Notable changes include alterations to the section on "Designation of Indian Tribal Lands and Indian Gaming" (p.13-14).

  
Review of the 2009 Legislative Budget, Water Policy and Transportation Issues  
  
BUDGET. When the Legislature convened in January 2009, the State faced a budget that was seriously out of balance, in part because the Legislature failed to make mid-year budget cuts during the months of November and December to address a then $40 billion deficit.   
  
In February, the Legislature finally passed and the Governor signed a revised FY 2009-10 budget deal that included $41.6 billion in “solutions” - $30.3 billion to balance the 2009-10 budget and $11.3 billion to close the gap projected for the remainder of 2008-09. The budget agreement contained a “trigger” mechanism linked to California’s receipt of funds from the federal economic recovery bill. Cuts totaling $94.7 million and a $1.8 billion tax increase would be “triggered off” only if California received at least $10 billion in federal funds that could offset state General Fund expenditures by June 30, 2010. Also included in the spending plan were measures that would go before the voters in a statewide special election on May 19, 2009: spending cap/rainy day fund; Proposition 98 (Education) changes; lottery modernization; Proposition 10 modifications (First 5 Commission); Proposition 63 modifications (Mental Health Services Act) and restrictions on legislative pay.  
  
Despite the passage of the spending plan, the State continued to experience fiscal problems. Treasurer Bill Lockyer and Finance Director Mike Genest determined that California would only receive $8.17 billion in federal funds to offset General Fund expenditures and thus did not pull the budget “trigger,” which had the effect of allowing the additional cuts and taxes to be implemented. The Legislative Analyst’s Office also reported that lower than expected revenues were coming into the State’s coffers. Due to the state’s cash-flow crisis, State Controller John Chiang began delaying payments to counties for the operation of health and human services programs. And all ballot measures at the May 19th election, with the exception of the legislative pay proposal, failed by significant margins.   
  
By May 2009, California’s economy had weakened substantially and the budget gap had again grown to an estimated $21 billion. Governor Schwarzenegger released his May revision to the budget (which he updated at several points in the process and issued two revisions in July) to address the current (2008-09) and budget (2009-10) years. The Legislature was forced to reconvene the Budget Conference Committee again to consider modifications to the 2009-10 budget bill, signed into law in February, as well as reductions to 2008-09 spending and other proposals to bridge the new budget gap.   
  
The Controller predicted the State would run out of cash as early as July 22 and major banks stated that they would not accept IOUs past July 10th. The Governor then declared a fiscal emergency on July 1 and called a special session of the Legislature to address the deficit. On July 2, Controller John Chiang began issuing IOU’s to businesses, local governments, and taxpayers receiving income tax refunds. The State issued 450,000 IOUs totaling $2.6 billion between July 2 and September 4.  
  
As lawmakers searched for solutions to the budget crisis, deliberations included discussions about suspending local government Proposition 1A revenues, suspending Proposition 42 transportation funding, suspending Highway User Tax Act (HUTA) revenues to counties and cities, elimination of the Healthy Families and CalWORKs programs, reductions to child welfare services, deferring AB 3632 (county mental health services for children with special needs) payments for one year, and reduction of funding for the Early and Periodic Screening, Diagnosis, and Treatment Services.   
  
On July 28, the Governor signed a package of budget revisions aimed at closing the $23.2 billion shortfall that included $24.2 billion in “solutions” - $16.1 billion through spending reductions, $3.5 billion from new revenues and revenue accelerations; $2.2 billion from borrowing, which included $1.9 billion from local government property tax revenues; $1.0 billion from fund shifts; and $1.4 billion from other “solutions.” The agreement includes a diversion of $1.9 billion of local government property tax revenues to schools and requires the state to repay the amount shifted, with interest, no later than June 30, 2013.   
  
The budget “solutions” agreed to again did not forestall a growing deficit. At the end of November, the Legislative Analyst Office (LAO) projected that California faces a $20.7 billion deficit between now and the time the Legislature enacts a 2010-11 state budget plan. The total includes $6.3 billion projected deficit for the 2009-10 fiscal year and a $14.4 billion gap between projected revenues and spending in 2010-11. The LAO is predicting annual budget deficits of $20 billion through 2014-15. When the Legislature returns in January, they will once again be faced with a massive budget shortfall.  
  
WATER AND THE DELTA. Unable to come to an agreement on a plan to address the State’s water problems when the Legislature adjourned in September, the Governor called a special session in October. There were several competing plans that attempted to address several key issues: regional interests, the Democrats desire for policies acceptable to environmentalists and the Republicans demand that the bond money go to dams and other storage projects. In the end, the compromise plan to fix the environmentally damaged Sacramento-San Joaquin Delta and improve the state’s water management systems was split into two parts – policy bills that required a majority vote and a water bond that required a two-thirds vote.   
  
The Delta Counties fought long and hard to ensure that the Delta and its communities were included in the major decisions that will be made affecting the Delta, but by and large, the demand for water in the Central Valley and Southern California trumped the interests of the Delta and Northern California communities. At the Governor’s signing ceremony, he called the comprehensive water package an “historic achievement.” The water policy package includes delta governance and a mandate to create a plan to restore the ecosystem; groundwater monitoring requirements; statewide water conservation; water division reporting requirements and water rights enforcement. The water bond, Safe, Clean and Reliable Drinking Water Supply Act of 2010, proposes an $11.14 billion general obligation bond for the November 2010 ballot.   
  
Just weeks prior to the passage of the water bond, the Treasurer Bill Lockyer released his “2009 Debt Affordability Report.” The report shows the General Fund debt service will double from $6 billion (6.7 percent) this year to more than $12 billion (10.5 percent) in the 2016-17 state fiscal year. Most of that higher level of debt service is the result of already issued bonds, and the Treasurer warned that the State is not in a position to take on additional debt and needs a master plan to set priorities for infrastructure development and how to pay for it.   
  
The water bond stipulates that no more than 50 percent of the $11 billion can be sold during the next five years, which only reduces the increase in debt service in the short term. All of this is contingent upon the voters’ approval next November.  
  
TRANSPORTATION. Most of the transportation legislation activity in 2009 was focused on budget-related transportation funds. There were relatively few non-budget transportation bills that were passed, unlike most years in which a large number of detailed transportation bills are passed or at least debated on a variety of transportation issues.  
  
During the spring and summer there was serious discussion in Sacramento about the possibility of discontinuing all state transportation funding programs for cities, counties and public transit agencies. This would have had a devastating impact on Contra Costa County and jurisdictions throughout California.  
  
Fortunately, the final budget package only deferred distribution of these transportation funds, rather than discontinuing them altogether. The state transportation funds that we would have received in July through December 2009 will be paid to the County and other jurisdictions in January through April 2010.  
  
The budget debate has led to the creation of a League of California Cities-sponsored ballot measure that would prohibit the State from raiding local transportation funds, local redevelopment funds or property tax revenue. Currently the State is allowed to do so with certain limitations and payback requirements. If enough signatures are gathered, the ballot measure will appear on the November 2010 ballot. (Another ballot measure that would call for a State Constitutional Convention is also circulating for signatures, and is supported by the Board of Supervisors).  
  
  
Review of 2009 Contra Costa County Legislative Activity  
  
We were successful in the first half of the 2009-10 legislative session in obtaining the Governor’s signature on legislation of importance to Contra Costa County. AB 166 gave counties additional tools to address abandoned vessels on public waterways; AB 1383 will help stabilize the hospital safety net by establishing a hospital provider fee; AB 1422 provides that Medi-Cal managed plans are subject to the gross premium tax in order to address the funding shortfall in the Healthy Families Program; two budget bills, SB 65 and SB 67, allow local governments to securitize the State’s repayment obligation for the property taxes it borrowed, made changes to bonding requirements and provided for additional deferrals of state payments to address the cash crisis.  
  
In addition to the legislative efforts described above, Attachment C lists all bills on which the County took a position and that Nielsen Merksamer monitored and assisted, as appropriate, to advance the County’s position.The first section shows the final action of 2009 legislation that the County took a position on or watched and the second section lists the bills that are pending in the 2010 session.  
  
Attachment D is a table showing the final disposition of the few relevant transportation bills that were discussed in the legislature in 2009. As the table shows, most bills either died in committee or were vetoed by the Governor. A few were changed to two-year bills and deferred to 2010. Three of the bills passed the Legislature -- AB 166 dealing with abandoned vessels in public waterways, and supported by the Board; AB 1175 dealing with bridge tolls and seismic retrofit for the Antioch and Dumbarton Bridges; and SB 65, which was the repayment of deferred transportation funds described above.  
  
With the assistance of our transportation lobbyist, California Strategies, and staff of the Public Works and Department of Conservation and Development Departments, the County will soon resume its legislative efforts to seek revision of the Subdivision Map Act to provide more flexibility in how jurisdictions can use the transportation impact fees paid by developers on new construction. As reported to the Board on previous occasions, state law currently restricts the use of these impact fee revenues to major road and bridge improvements; the funds may not be used for public transit improvements, or pedestrian or bicycle improvements. As the County and other jurisdictions increasingly pursue infill development in already-urbanized areas, more and more of the transportation impacts will have to be mitigated through pedestrian, bicycle and public-transit improvements rather than new roads or bridges. The County’s legislative initiative would provide this flexibility in the use of the impact fee revenues.  
  
The County pursued this issue with the Legislature in 2008 and nearly succeeded until last-minute objections from the southern California building industry led then-sponsor Senator Mark DeSaulnier (D-Concord) to drop the bill until he had more time to discuss it with the building industry. The bill was not pursued in 2009 because the Legislature’s focus was entirely on budget matters. This effort is included in the transportation component of the County’s State Platform for 2010. 2010 also will see continued focus on the State budget. Staff will work with CSAC and the County’s advocates to monitor any budget developments that could impact the County’s transportation funding.  
  

PROPOSED 2010 STATE LEGISLATIVE PLATFORM  

Each year, the Board of Supervisors adopts a State legislative platform that establishes priorities and policy positions with regard to potential State legislation and regulation. The State Legislative Platform includes policy issues that provide direction and guidance for identification of bills which would affect the services, programs or finances of Contra Costa County; County-sponsored bill proposals; and issues regarding the State budget and state-local relationships.

  
The proposed 2010 State Legislative Platform is included as Attachment B.  
  
Notable changes from the 2009 State Legislative Platform include the following:  
  
1. Given the anticipated focus on State Budget and Delta water issues in 2010, the number of County-sponsored bills has been reduced from three to two. Through the efforts of our transportation lobbyist, the County will seek to advance its Subdivision Map Act Amendment bill. In conjunction with the Urban Counties Caucus (UCC), the County will also seek to promote and partner with other counties on a bill to allow "All Mail Ballots" for special elections. The two bill proposals from 2009 dealing with CEQA exemptions for affordable housing lending and infill development in unincorporated areas have been reconfigured as Policy Positions (p. 17). Should there be an opportunity to include these bill concepts in any SB 375 clean-up or similar legislation, County staff and our advocate will endeavor to advance their legislative intents.  
  
2. Illegal Dumpinghas been removed as a Legislative Advocacy Priority. Again, given the number and complexity of the legislative priorities of the County, staff recommends that the list be pared down to the most essential items.  
  
3. Various Policy Positions have been amended. Changes are highlighted and italicized in Attachment B. Notable changes include the addition of two policies related to funding for First 5 Commissions (p. 15), a policy to support legislation to establish an advance disposal fee program (p. 15), and alterations to Indian Gaming issues (p. 16).