Governance by regional bureaucrats destroys government as envisioned by our Founding Fathers.  The Nine-County Coalition seeks to offer solutions to challenges affecting the San Francisco Bay Area that do not weaken existing governmental jurisdictions.  Cities, counties, and states are government jurisdictions.  Regional agencies are not.  Voters have control over officials serving in government jurisdictions, but no control over those administering agencies. We thank you for visiting the NCC website.

Trump's 2018 Major Agency Budget Proposal: Cutting Up the Credit Cards

There is a White House 2018 agencies budget proposal on the table.  The Nine-County Coalition’s primary focus is on city, county, and state matters.  However, we also opine on federal issues that significantly influence local events.  Therefore, we list some points from the Major Agency Budget published by the Office of Management and Budget on March 16, along with our comments. 

Budget – Highlights:  “…the Budget eliminates and reduces hundreds of programs and focuses funding to redefine the proper role of the Federal Government.”

Comment:  Amendment X of the United States Constitution - “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”  What is not specifically enumerated is the responsibility of the States or the people.  Fiscal year 2016 federal budget $3.871 trillion; national debt $18 trillion; federal deficit $537 billion; 430 departments and agencies; 4,185,000 federal civilian and military employees.  Given these gargantuan figures, it would seem the federal government is tackling more than its enumerated duties.

Budget – Department of Agriculture:  “Reduces funding for lower priority activities in the National Forest System, such as major new Federal land acquisition; instead, the Budget focuses on maintaining existing forests and grasslands."   

Comment:  The Federal Government owns 46% of California land.  Most of us would not welcome building private homes on cattle grazing lands, given the economic contribution of ranchers to the state.  However, we need to choose between expensive transit-oriented development and reasonable reduction of protected areas.

Budget – Department of Commerce:  “Zeroes out over $250 million in targeted National Oceanic and Atmospheric Administration (NOAA) grants and programs supporting coastal and marine management, research, and education, including the Sea Grant, which primarily benefit industry and State and local stakeholders.”

Comment:  Although the 2016 Bay Area-wide Measure AA established a $12 parcel tax to help fund the Bay Area Restoration Authority, the Authority was certainly depending on federal grants. It is questionable whether there is a national interest in “restoring” the San Francisco Bay. The $12 parcel tax “benefits industry and State and local stakeholders,” especially the technology industry with its campuses bordering the South Bay.  The Budget will encourage NOAA to return to core functions such as surveying, charting, fisheries management, and providing forecasters with weather data.

Budget - Environmental Protection Agency:  "Eliminates funding for specific regional efforts such as the Great Lakes Restoration Initiative, the Chesapeake Bay, and other geographic programs...The Budget returns the responsibility for funding local environmental efforts and programs to State and local entities, allowing EPA to focus on its highest national priorities."

Comment:  The "specific regional efforts" would include continued funding for the Bay Restoration Authority.  Industry campuses that border the Bay would need to fend for themselves if they fear flooding.  Environmentalists would need to rely on private donations to save their favorite fish or seaweed.  Consumers would need to vote with their feet and refuse to do business with companies that harm the Bay.

Budget – Department of Housing and Urban Development:  "Eliminates funding for the Community Development Block Grant program"…"The Federal Government has spent over $150 billion on this block grant since its inception in 1974, but the program is not well-targeted to the poorest population and has not demonstrated results.  The Budget devolves community and economic development activities to the State and local level…"

Comment:  Cities and counties have come to depend of federal block grants, and these grants come with strings attached.  The NCC has discussed the drawbacks of the 2015 Executive Order “Affirmatively Funding Fair Housing.”  One of the requirements of receiving block grants is establishing the AFFH program in every neighborhood, and filling out reams of forms affirming that progress is being made in achieving neighborhoods wholly integrated by race and income.  AFFH and many other HUD programs are certainly far removed from HUD’s core mission of helping the poorest populations.  We note that AFFH was a Presidential Executive Order on which neighborhood residents of any race or income never voted on.

Budget – Department of the Interior:  “Eliminates unnecessary, lower priority, or duplicative programs, including…National Wildlife Refuge fund payments to local governments that are duplicative of other payment programs.” “Reduces funding for…new major acquisitions of Federal land.”

Comment:  The core responsibilities of the DOI are to protect and manage federally-owned land and waterways, provide information about natural resources, and meet national trust responsibilities to American Indians, Alaska Natives, and U.S.-affiliated island communities. Investing in maintenance of existing national parks, refuges and public lands is a good use of scarce resources.

Budget – Department of Transportation:  “Limits funding for the Federal Transit Administration’s Capital Investment Program (New Starts) to projects with existing full funding grant agreements only.  Future investments in new transit projects would be funded by the localities that use and benefit from these localized projects.” 

Comment:  Residents of Oklahoma and Kansas are helping to fund Bay Area’s BART and California’s High-Speed Rail.  Regarding the High-Speed Rail project, the Federal Railroad Administration is currently funding 69 HSR projects in 22 states totaling $8.6 billion; California’s share for initial planning, and construction of the initial Central Valley section is $2.6 billion or 30%.   

Loss of federal funding for many plans and projects, coupled with the financial strain placed upon Bay Area cities and counties intent on providing housing and a plethora of benefits for all, is not a pleasant prospect.  However, this might be a good time for voters to wrestle control back from profligate agencies, authorities, and irresponsible representatives, who seem to be doing everything in their power to either hoodwink voters or keep voters out of the decision-making process altogether. 


Caltrain Electrification

The Orange County Register of 02/17/17 reported that federal funding for Caltrain electrification was placed on hold in February, pending a new federal budget.  Caltrain spokesman Seamus Murphy called the delay a disappointment and added, “It really isn’t about the Caltrain project or any question about controversy surrounding our project. It’s about billions of dollars of projects that are already in the pipeline,” he said. “I think this is more a question about whether the administration is going to continue to invest in transit projects in the way that federal investment has occurred in the past.”  Probably not, since the proposed 2018 budget shifts responsibility for new capital investment to the localities that use and benefit from the investments.

Will Senate Bill 1 Fix California's Potholes?

The number of bills California legislators crank out each year is astounding.  One would think California residents were in need of guidance for every aspect of their lives.  Therefore, we at the Nine-County Coalition focus on bills that might carry the potential of fueling the kind of central planning exemplified by Plan Bay Area.  Most likely, such bills will include “housing” and/or “transportation” in their titles, and call for “sustainable communities,” “complete streets,” or other vocabulary of central planning.

Obviously, unless California chooses to administer its infrastructure exclusively with private funds – a heretical thought – provision for the collection and manner of collection of taxes to fund ports, state highways, roads, and streets is necessary.  However, residents might do well to keep an eye on what exactly their government representatives are enacting to accomplish funding objectives.

California Senate Bill 1, introduced by Senator Jim Beall and now pending in the Appropriations Committee, significantly revises California’s transportation funding system. Here are a few highlights that might be of interest. 

SB 1 Does the Following:

*  Creates the Road Maintenance and Rehabilitation Program, into whose funding account various funds would be deposited.

*  Requires the California Transportation Commission to adopt specified performance criteria.

*  Sets aside $200 million annually to be available to local jurisdictions that have passed or imposed transportation taxes orfees.

*  Allocates $80 million annually to the state Highway Account.

*  Allocates $2 million annually to the California State University for transportation research and education.

*  Removes the California Transportation Commission from the Transportation Agency, and established it an entity of state government required to perform an oversight role.

*  Creates the Office of the Transportation Inspector General as an entity of state government to ensure that all agencies spending state transportation funds operate efficiently. The Inspector General would be appointed by the Governor for a 6-year term subject to confirmation by the Senate.

*  Requires that the Department of Transportation “update the Highway Design Manual to incorporate the “complete streets” design concept by January 1, 2018.

 *  Establishes until January 1, 2023, the Advance Mitigation Program and the Advance Mitigation Fund in the Department of Transportation, which will receive $30 million annually from the Road Maintenance and Rehabilitation Program. The bill would authorize the Department of Transportation to undertake specified mitigation measures in advance of construction of planned transportation improvements.

*  Authorizes the Department of Transportation where a regional conservation framework has been approved by the Department of Fish and Wildlife to, “Acquire, restore, manage, monitor, and preserve lands, waterways, aquatic resources, or fisheries, or fund the acquisition, restoration, management, monitoring, and preservation of lands, waterways, aquatic resources, or fisheries that would measurably advance a conservation objective in the regional conservation investment strategy if the department concludes that the action or actions could conserve or create environmental values that are appropriate to mitigate the anticipated potential impacts of planned transportation improvements.”

SB1 Creates the Following Funding Sources:

*  $0.12 per gallon increase on sale of gasoline, staggered over three years.

*  4% increase in the sales and use tax on diesel fuel, to be adjusted by the rate of the CA CPI.

*  $38 increase in annual vehicle registration fees, adjusted by the CPI.

*  A new $100 annual vehicle registration fee, adjusted by the CPI, applicable to zero-emission motor vehicles.

Some Good Some Bad

California’s per capita spending on transportation could use improvement, and SB 1 is very specific on what it creates, what it will do, and where money is coming from.

The discouraging part is that the bill indicates that “a funding program will help address a portion of the maintenance backlog on the state’s road system.”  How small a portion one might ask. 

The cautionary part is the establishment of funding for mitigation of possible environmental degradation in anticipation of transportation projects.  The question might come to mind how far in advance of the initiation of projects are mitigation efforts to be made!  How much of these now funded mitigation efforts will include land purchases and easements? 

Although the bill says that increased revenues will be directed to “the state’s highest transportation needs,” transportation needs these days include a lot more than reliable buses and pothole-free highways, as exemplified by BART going into the  “transit villages” business.  Therefore, it behooves residents to remain vigilant to prevent special interests from unduly influencing where the money goes.

Proposition 13: Rethinking Sacred Cows

Plan Bay Area Housing Affordability Funding Gap.   

Plan Bay Area Housing Affordability Funding Gap.   

California Legislators have been trying to remove taxation limits for decades, especially limits imposed by Proposition 13, the 1978 voter initiative that placed a cap of 1% on property taxes and 2/3 supermajority vote for passage.  However, California seems determined to live in a state of perpetual crisis, which legislators say requires lots of money to cure.  Today’s crisis is housing.

The surprisingly candid Bay Area Council in its report, Closing the Bay Area’s Housing Gap, of December 2016, advises jurisdictions to,


Rethink sacred cows. Consider revisiting Proposition 13, CEQA, and local control over land use as part of a grand bargain on housing.

Win hearts and minds for housing. We need storytelling, not just data.  Building conviction for housing among major voting blocs—e.g., environmentalists and organized labor—is critical. ‘Never let a good crisis go to waste’. The state could reframe the conversation by declaring a housing crisis and the electorate would be receptive to action due to skyrocketing rents and home prices.

In spite of legislators’ Herculean efforts, so far, their only significant success has been Proposition 39, which amended Article XIII of the California Constitution called for by Proposition 13, by lowering the required supermajority vote necessary for voters to approve local school bonds, from 2/3 of the votes cast, 55% of the votes cast.  Voter-approved school bonds under Proposition 39 are paid off by raising property taxes above the 1% property tax rate limit established by Proposition 13 in 1978.  Unfortunately, Proposition 39 and the ensuring ability of school districts to spend more did not improve the overall quality of California public schools, as evidenced by the 2016 Wallethub list by state that gave California schools a rank of 40 out of 51.   But, that is viewed as a minor aside.

Now, California Assembly Member Cecilia Aguiar-Curry (D-Winters) has introduced Assembly Constitutional Amendment No. 4 (ACA-4), Local Government Financing:  Affordable Housing and Public infrastructure, which is pending referral and may be heard in committee on March 21, 2017.  ACA-4 would amend California Constitution Article XIIIA.  

Highlights of ACA-4:

*  At present the California Constitution prohibits the ad valorem tax rate on real property from exceeding 1% of the cash value of the property, subject to specific exceptions.  ACA-4 would create an additional exception to the 1% limit that “would authorize a city, county, or city and county to levy ad valorem taxes to bonded indebtedness incurred to fund construction, reconstruction, or replacement of public infrastructure or affordable housing, if the proposition proposing that tax is approved by 55% of the voters of the city, county, or city and county.”

*  At present the California Constitution “conditions the imposition of a special tax by a local government upon the approval of 2/3 of the voters of the local government voting on that tax, and prohibits these entities from imposing an ad valorem tax on real property or a transaction or sales tax on the sale of real property.”  ACA-4 “would authorize a local government to impose, extend, or increase a special tax for the purpose of funding the construction, rehabilitation or replacement of public infrastructure or affordable housing, if the proposition that the tax is proposing is approved by 55% of voters.”

*  At present the California Constitution prohibits local government agencies from incurring any indebtedness exceeding in any year the income and revenue provided in that year, without the assent of 2/3 of voters, with the exception of indebtedness to provide funds for school districts.  ACA-4 would lower the voter-approval threshold to 55%; if the indebtedness is for general obligation bonds issued to fund the construction, reconstruction, rehabilitation or replacement of public infrastructure or affordable housing projects.

*  For the purposes of this amendment, “affordable housing” is described as,

“Housing developments, or portions of housing developments, that provide workforce housing affordable to households earning up to 150 percent of countywide median income, and housing developments, or portions of housing developments, that provide housing affordable to lower, low, or very low income households, as those terms are defined in state law.”

*  For the purpose of this amendment, “public infrastructure” is described as:  water quality, sanitary sewer, treatment of wastewater, protection from sea level rise, open space and recreation facilities, improvements to transit and streets, and highways, flood control, broadband expansion in underserved areas, local hospital construction.

The Nine-County Coalition is not “anti-tax;” however, part of our mission is to encourage voters to be aware of legislation that will provide the funds for the implementation of central planning efforts which so many California residents oppose.  Awareness is especially recommended now that legislators have caught on to residents’ desire for “local control” of their cities and counties, and are introducing legislation that purports to support “local control,” while funds are directed toward further implementation of central planning. 

A report prepared by the Association of Bay Area Governments (ABAG), Affordable Housing Funding Gap Analysis, in April 2014, describes the funding shortfall of just one of the several elements of Plan Bay Area, subsidized housing. See the chart above illustrating the gap.

The Bay Area will need to produce 660,000 new housing units through 2040 to accommodate its projected population growth and future workforce. Over 371,000 or 56 percent of these housing units will need to be affordable to low and very low income Bay Area residents. Market rate development alone will not meet this demand; it must be complemented with affordable housing development. This requires subsidy.

Funding for Plan Bay Area’s projects would be greatly improved with passage of ACA-4.  However, as we have seen from the results of Proposition 39, more money does not necessarily translate into desired objectives.  Better outcomes might come from less grandiose central plans, specific city/county-centered proposals for basic services such as more frequent clean-fuel buses reaching even remote communities, and facilitation of local jobs that would not require residents to travel long distances.

Meet Your New Landlord: Bay Area Rapid Transit

TOD Fruitvale2.jpg

Bart is Going Into the Housing Business

Are you wondering about the disappearing parking spaces at BART stations?  Or how come all those look-alike “villages” are springing up along BART lines?  The answer is BART has been developing a housing plan since the late 1990’s, which has now come into full swing.  Why, you might ask would a transit system want to go into the housing business:  hope of steady revenue streams. 

BART owns roughly 250 acres within one-half mile of its existing and under-construction stations, most of which are in surface parking lots. In 2016, the BART Board adopted a new Transit-Oriented Development (TOD) policy establishing goals of supporting the implementation of Plan Bay Area and infill development near stations in partnership with cities, in order to increase ridership where the system has capacity to grow, reduce auto dependence, and lower regional greenhouse gas emissions.

To implement this policy, and to achieve the 2025 and 2040 TOD performance targets also adopted by the BART Board in December 2016, BART will be accelerating the pace at which TOD projects on BART property occur, and will be working with cities to expand tools and resources for TOD within the one-half mile station area. The Board aims to have a total of 7,000 housing units built on BART property by 2025.

TOD Basics

*  In addition to increased ridership, BART is also counting on revenue streams derived from lease agreements with developers, as well as from value capture-covenants.  Property closer to transit carries a higher value, so developers are willing to pay value fees to BART for the privilege of building on BART-owned land.

*  However, TOD projects are not intended to be self-supporting.  BART’s plan includes public financing and governance mechanisms, including joint powers authorities, assessment districts, improvement districts, and lease credits – all designed to capture a variety of taxpayer funds.
*  Current TOD projects include executed agreements at Fruitvale, MacArthur, Millbrae, Pleasant Hill, Richmond, San Leandro, South Hayward, Walnut Creek, and West Dublin/Pleasanton stations.  Future projects are envisioned at West Oakland, Balboa Park, El Cerrito Plaza, and Lake Merritt stations.

*  The District’s Affordable Housing Policy, adopted January 2016, calls for a minimum 20% developer-subsidized units, and aims for a District-wide target of 30 percent of all units to be affordable, with a priority to very low (<50% AMI), low (51-80% AMI) and/or transit-dependent populations.

The disease worsens with treatment

A rallying cry of the 1960’s was “Question Authority!” which remains an excellent suggestion.  We at the Nine-County Coalition would like to add another suggestion, question treatments designed to cure ills of the market:

Is the primary purpose of BART TODs to help lower regional greenhouse gas emissions, or to continue looking under the sofa cushions for money, rather than improve efficiency and cut costs?  Observation:  “Labor costs, including both wages and benefits, are the primary driver for BART’s operating uses, comprising about 72% of BART’s operating expense.”

Density near transit lines is mandated by Plan Bay Area.  Property near transportation commands higher prices.  As higher-priced development continues, and urban sprawl is discouraged, housing costs continue to rise. This merry-go-round is beneficial to established property owners who see their property values rise; but hardly facilitates local economic growth, when renters and new buyers need to spend a large chunk of their earnings on housing, leaving little to spend on local goods and service.

Luckily, the BART Board of Directors is elected by the votes of District residents. They can be disregarded on Election Day if investment in TODs do nothing but obliterate our parking spaces and provide overpriced housing; if it does not prevent BART from needing to raise fares significantly or come to voters hat in hand at every election; or if revenues go toward even higher labor costs and benefits.