HomeMy WebLinkAbout01/04/2005, COUNCIL LIAISON REPORT #1 - SAN LUIS OBISPO COUNCIL OF GOVERNMENTS DECEMBER 8, 2004 Y
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Uaison REpoRt
`city of Lan Luis osispo
December 20, 2004
To: Council Colleagues
From: Dave Romero, Mayor (��,e
Subject: San Luis Obispo Council of Governments
December 8,2004
Items of Special Interest to SLO City:
1. Executive.Director Reports
A. State AB3047, authorizing relinquishment of a portion of Route 227 to SLO, was
enacted.
B. The House and Senate has approved:
• 2005 Bill for Highways: (slightly up), Transit (slightly up) and Rail (AMTRAK)
(down).
• Reauthorizing TEA21 program: Highways (slightly up), Transit (probably at same
level).
C. Eight of twelve counties and cities in the state were successful in the past election in
raising sales taxes for transportation purposes by 1/2% (67% favorable vote in each case).
NOTE: 83% of California's population resides in counties with approved measures.
2. Federal Transportation Improvement Program (FTIP) was modified to include $358,000
for individual SLO City Transit projects and$394,000 for SLO Transit operations.
3. Regional Transportation Pian. Reviewed Chapters 4 (System Efficiency) and 5 (System
Development) of"Vision 2025 —A Regional Transportation Plan". Conclusion reached is
that even if Proposition 42 funds are fully restored by the State, this County will be 38%
($305 million) short of meeting its highways, streets and road needs by 2025.
4. Transportation Funding(Attachment A). In the past three years, the State has "borrowed"
$5.5 billion in earmarked transportation funds. This includes $15 million in SLO County
delaying every major road and transit improvement. In addition, there is a$3-5 billion
shortfall in funds needed to reconstruct the Bay Bridge. If this shortfall is allocated statewide
(instead of only to bridge users), SLO County's share would be an additional $30 million.
Lltuion Report SL0000-SLOR7A
5. Contra Costa Transportation Authority (Attachment B) is spearheading a statewide effort
to address the continuing diversion of Transportation Funds and CalTrans inefficiencies in
delivering projects..
6. Transit Ridership. In recent years, SLO Transit's rapidly declining ridership overcame
slightly increased ridership on other County transit systems, giving an overall downward
trend. With the changes made this past year in both routes and schedules, ridership on both
the City and county-wide systems has risen approximately 6%.
7. HCD Housim Allocations (Attachment Q. The Legislative Analyst's Office has prepared a
document regarding the ineffectiveness of the HCD mandate and questioning whether the
mandate is worth the cost.
CAk I -a
San Luis Ob.vo Council o Governments
Regional Transportation Planning Agency �A�ee
Metropolitan Planning Organization Memos
Census Data Affiliate Paso be l n
Service Authority for Freeways and Expressways son Luis Obispo
Ronald L:DeCarli-Executive Director `J Y San Luis Obispo Cowry
News Release
For further details contact:
Ron DeCarli
(805) 781-4219
http://www.slocog.org
December 3, 2004 FOR IMMEDIATE RELEASE
(Release no later than December 7, 2004)
SLOCOG & California Face Transportation Funding Crisis
At the December 8th SLOCOG Board meeting, an update will be presented on the status of the
continuing transportation funding crisis being faced by the San Luis Obispo Region and the State of
California. Simply stated, local and state highway projects will continue to see extensive delays, with
inflation adding to their ultimate cost.
Over the past three years, the Governor and State Legislature have borrowed over $5.5 billion dollars
from transportation accounts as a part of their attempts to balance the State budget. Due to the lack of
funding, the State Transportation Improvement Program (STIP) now consists of a backlog of projects
waiting for money to become available. The amount of State funding estimated by Caltrans to be
available in FY 04/05 is limited to $500 million. Of this amount, $180 million has been allocated for
right-of-way costs, leaving only $320 million available for actual transportation improvements for the
entire state. The available funding of $500 million is in stark contrast to the $11.7 billion needed
annually for transportation projects statewide.
As a direct result of the diversion of transportation funds by the State, SLOCOG was required to delay
the start date for approximately $43 million worth of projects programmed from Fiscal Years 2003-05
back to 2006-09, including progress on the following:
• Route 46 East Widening
• Route 46E/US 101 Interchange Improvements
• Route 46W/US 101 Interchange Improvements .
• US 101 Operational Improvements
• US 101/Price Street Extension
Ao4de4ckm E5'q-i
1
1150 Osos Street, Ste. 202,San Luis Obispo, CA 93401 ®Tel.(805)781-4219 ♦ Fax.(805) 781-5703
E-mail. slocog@slocog.org ® Internet. http://www.slocog.org
• Route 166E Operational Improvement
• Route 227 Improvements
• Price Canyon Road Improvements
• Santa Maria River Bridge Widening
Of more immediate concern is the continued suspension by the legislatur of Proposition 42 funding,
which was passed by the electorate to provide revenue for transpo 'on purposes in Cities and
Counties. This funding was intended to provide local agencies a dicated source of transportation
funding for street and road maintenance and rehabilitation, a to provide additional funding for
highway,transit and local road improvements.
The people of the San Luis Obispo region, like those th ghout the State, are strong supporters of
Proposition 42. It was overwhelmingly approved in 2002 y69.1% of all voters in California and 71.9%
of voters in San Luis Obispo County. Unfortunately, ' has been suspended twice by the Legislature
and the Governor to help address the General Fun deficit. Asa result, San Luis Obispo County and
the seven Cities have already lost over$10 milli in anticipated revenue..
The continuation of the State General Fund ficit will likely mean that Proposition 42 will be suspended
again in FY 05-06. If that happens, to agencies in San Luis Obispo County will lose another $5.2
million. Potential lost funding includes:
• $1.38 million to the County or road maintenance and rehabilitation.
• $606,000 to cities for roa maintenance and rehabilitation.
• $3 million to SLOCO in the Regional Transportation Improvement Program (RTIP).
• $228,000 to SLOC for allocation to transit operators.
The funding provided b Proposition 42 is needed by the County and the seven cities in the region to
pay for a backlog of cal road maintenance and rehabilitation projects with an estimated cost of$160
million. The lack f this funding will also cause a delay in a number of state highway improvement
projects. The ost important of these locally are the $18 million Route 101/Price Street Extension in
Pismo Beach nd the $17.2 million Route 41/101 Interchange reconstruction in Atascadero.
A numbe of actions need to be taken to address this funding crisis. The U.S. Congress needs to
reauth ze the federal highway bill at a funding level that recognizes California's critical importance in
movi goods from our ports to the rest of America. At the State level, action must be taken in the next
legi ative session to stop the diversion of funds designated by the electorate for local roads,transit and
hi way improvements. State Legislators and the Governor must be held accountable to uphold the
i tent of the electorate and ensure the $1.1 billion annual investment supported by California voters
goes where it was intended -to improve our transportation system and ease gridlock.
�4dolc�►a�uvn 8-�-�
• Route 166E Operational Improvement
• Route 227 Improvements
• Price Canyon Road Improvements
• Santa Maria River Bridge Widening
Of more immediate concern is the continued suspension by the legislature of Proposition 42 funding,
which was passed by the`electorate to provide revenue for transportation purposes in Cities and
Counties. This funding was intended to provide local agencies a dedicated source of transportation
funding for street and road maintenance and rehabilitation, and to provide additional funding for
highway,transit and local road improvements.
The people of the San Luis Obispo region, like those throughout the State, are strong supporters of
Proposition 42. It was overwhelmingly approved in 2002 by 69.1% of all voters in California and 71.9%
of voters in San Luis Obispo County. Unfortunately, it has been suspended twice by the Legislature
and the Governor to help address the General Fund deficit. As a result, San Luis Obispo County and
the seven Cities have already lost over$10 million in anticipated revenue.
The continuation of the State General Fund deficit will likely mean that Proposition 42 will be suspended
again in FY 05-06. If that happens, local agencies in San Luis Obispo County will lose another $5.2
million. Potential lost funding includes:
• $1.38 million to the County for road maintenance and rehabilitation.
• $606,000 to cities for road maintenance and rehabilitation.
• $3 million to SLOCOG in the Regional Transportation Improvement Program (RTIP).
• $228,000 to SLOCOG for allocation to transit operators.
The funding provided by Proposition 42 is needed by the County and the seven cities in the region to
pay for a backlog of local road maintenance and rehabilitation projects with an estimated cost of$160
million. The lack of this funding will also cause a delay in a number of state highway improvement
projects. The most important of these locally are the $18 million Route 101/Price Street Extension in
Pismo Beach and the $17.2 million Route 41/101 Interchange reconstruction in Atascadero.
A number of actions need to be taken to address this funding crisis. The U.S. Congress needs to
reauthorize the federal highway bill at a funding level that recognizes Cal
'rfomia's critical importance in
moving goods from our ports to the rest of America. At the State level, action must be taken in the next
legislative session to stop the diversion of funds designated by the electorate for local roads, transit and
highway improvements. State Legislators and the Governor must be held accountable to uphold the
intent of the electorate and ensure the $1.1 billion annual investment supported by California voters
goes where it was intended -to improve our transportation system and ease gridlock.
i
Transportation agencies and other transportation interests around the state are considering submittal of
a measure for the 2006 ballot entitled "Rescue Transportation" that consists of four major elements to
address the funding problem:
1. Prohibit the taking of dedicated transportation funds to assist the state general fund.
2. Provide institutional changes to the composition of the California Transportation Commission
(CTC)to provide greater autonomy.
3. Provide project delivery enhancements.
4. Require a biennial report of funding adequacy and authorize the California Transportation
Commission to adjust transportation tax and fee rates every two years within constraints.
In January 2005,further discussions will be held on the next steps toward implementation of some or all
of the components of Rescue Transportation. A draft of the proposal has been released for review and
comment and is available at www.slocog.org.
Attached is a copy of the staff report (Item B-4) that will be presented to the SLOCOG Board at its
December 8t' meeting, which begins at 8:30 AM.
CONTRA COSTA TRANSPORTATION AUTHORITY
COMMISSIONERS: Amy Worth, Chair Janet Abelson, Vice-Chair Charles Abrams Maria Alegria Donald P.Freitas
John Gioia Federal Glover Brad Nix Julie Pierce Karen Stepper Kris Valstad
MEMORANDUM
TO: Self-Help Coalition Members and Interested Parties
FROM: Bob McCleary,Executive Director on behalf of the Self-Help Counties Coalition
DATE: November 8, 2004
RE: "Rescue Transportation"Proposal
As requested at the October 2004 Self-Help Coalition meeting,this memorandum provides a synopsis of
the Rescue Transportation proposal for consideration as a constitutional amendment on the November
2006 statewide ballot, specifically: (l)the problems it is trying to solve;and(2)a summary of its
principal components,broken down into four categories. At this juncture,the Coalition is seeking the
comments and conceptual position of public transportation agencies and the comments and advice of the
private sector relative to each of the categories and their components,as detailed below.
Fundamental Transportation Problems Rescue Transportation Seeks to Address
Preservation of California's transportation system and the expansions necessary to accommodate growth
in population, employment and economic and social activity are essential toCalifornia's long-teim
economic viability and prosperity. To do otherwise would reduce the mobility of its inhabitants and
visitors. The twin goals of preservation and expansion are threatened by a confluence of factors:
Diversion of Transportation Revenues. Over$5.5 billion in transportation revenues have been
diverted to help offset the State's General Fund deficits over the past 3 years. This has resulted in
a dramatic reduction of funding,which first virtually eliminated new projects and operational
enhancements, and subsequently has shrunk funding for rehabilitation and safety to %<or less of
the levels warranted. The long-term impact on California's mobility and economy will be
significant if a correction is not found.
❖ Pr_oiect Delivery Takes a Lone Time and Involves Cumbersome Processes. Major new
capital projects can take at least 3 to 5 years to obtain environmental certification,and sometimes
longer. Often sequential environmental approval, design,right of way acquisition,and
construction processes can stretch completion of significant projects over a time period of ten or
more years.Tools that are commonly used elsewhere in the United States to expedite delivery are
not fully available in California.
❖ The State's Institutional Framework Creates Inefficiencies and Promotes Delay. Currently,
Caltrans is subject to annual legislative budgeting,and its budget and staffing plans are subject to
the review of the Department of Finance. Some of its contracts and purchasing are subject to the
statutory authority of the Department of General Services,and its personnel practices are subject
to regulation by the State Personnel Board and Department of Personnel Administration. This
framework makes Caltrans' administration more complex gnd jve and add is
to e rvery ofLnr =cls. Caltrans could benefit dramatically by streamlining the institutional
framework that it works within,and providing some of the benefits and autonomy enjoyed by the
Self-Help Counties. Caltrans is also no longer competitive in its compensation,resulting in an
exodus of high-quality staff to local agencies and the private sector.
Robert K. McCleary, Executive Director 3478 Buskirk Ave., Ste. 100 Pleasant Hill, CA 94523-7311
Phone: 925-407-0121 Fax: 915-407-0128 Website: http://Wwiv.ccia.net
$- 4-� A
Rescue Transportation Summary Paye 2
November 8, 2004
Growth in Travel Demand Exceeds Our Abilityto Sustain Reasonable Mobi It is a
well-acknowledged fact that growth in vehicle miles traveled in California has outpaced
growth in transportation revenues. Freeways,highways and arterials have gro more crowded,
and the state highway system, as well as local streets and roads,are in need significant repairs
and rehabilitation. Demand for transit,and rehabilitation needs, are growi at the same time as
the principal source of transit revenues—sales taxes-have experienced `down"cycle in the
economy. The traditional source of revenues for the state highway syst and local streets and
roads-the gasoline excise tax on a per gallon basis-has only been r i ed on two occasions in
the past 23 years,and in aggregate has grown at a much slower rate an travel demand.
_Rescue Transportation Components
To address key elements of the problems cited above,Rescue Transporta on can be sub-divided into four
major components as follows: - - -
❖ Firewall for Transportation Funds. This element,which ould constitutionally protect
transportation funds from diversion and thereby provide m re certainty and predictability,is the
most critical component. It would bar loans or diversion of transportation revenues by the State,
for example to the General Fund. It is somewhat simil to the recently passed Proposition IA.
:• Institutional Chances. The institutional framework ithin which Caltrans must work is fraught
with inefficiencies. A range of improvements is pos le here. The proposal suggests removing
Caltrans from legislative budgeting and placing it der the direction of the California
Transportation Commission(CTC),which would erve as a board of directors and provide a
model more similar to the Self-Help Counties. versight and authorit}�f thr T1Pnartmentc of
Finance,General Services,and Personnel
the tate ersonnel Board. Caltrans would b shifted to a biennial (every two years)budget that
would be synchronized with the adoption o the biennial State Transportation Improvement
Program(STIP). While provisions of the ivil.service system and PERS membership are
envisioned to be retained, salaries woul be set based on market conditions,probably including
geographic differentials,in order to re in high quality staff throughout the Department. The
CTC would appoint the C/and
ctor and Chief Legal Counsel,to provide a high level of
professionalism and contis changes in Administration.
Project DeliveryEnhancaltrans,and local agencies, would be provided with a
broader range of delivery mechanisms, including design-build authority,the ability to
pay for bids and proposalsropriate,toll road authority, assured contracting out authority
for a broad range of servicer mechanisms.
Trans ortation Financinal Re ort and Revenue Adjustments. Potentially the most
controversial provision o the proposal would require the CTC to conduct biennial reviews,in the
years between STIP an budget adoption,regarding the adequacy of transportation revenues to
preserve the existing stem and provide necessary expansion. The report would address the state
h/comments
and interc' rail system,preservation and critical expansion of the local streets and
rtem, and a capital needs to sustain and expand local transit systems. If the CTC
des that djustments are wan-anted, it would have the authority to adjust transportation tax
aates ce every two years,within constraints. The adjustment would take effect within
9unl s the Legislature enacted a bill,by'/<vote of each house and the bill received the
sthe Governor,that voided all or part of the rate adjustments.
The Coalks forward to receiving the comments and conceptual position of public transportation
agencies, comments and advice of the private sector, relative to each of the above categories and
their corn . We would appreciate your input by January 10,2005, so that we can decide on the
next step to take towards implementation of some or all of the components of Rescue Transportation.
Your comments can be sent to meat the address below,or emailed to me at rmccleary-7@ccta.net.
Robert K. McCleary. Executive Director 3478 Buskirk Ave.. Ste. 100 Pleasant Hill, CA 94523-7311
Phone: 925-407-0121 Fax: 925-407-0128 Website: http://www.ccia.net
Rescue Transportation Summary Page 2
November 8, 2004
❖ Growth in Travel Demand-Exceeds Our Ability to Sustain Reasonable Mobility. It is a >�
well-acknowledged fact that growth in vehicle miles traveled in California has far outpaced
growth in transportation revenues. Freeways,highways and arterials have grown more crowded,
and the state highway system,as well as local streets and roads,are in need of significant repairs
and rehabilitation. Demand for transit,and rehabilitation needs,are growing at the same time as
the principal source of transit revenues—sales taxes—have experienced a"down"cycle in the
economy. The traditional source of revenues for the state highway system and local streets and
roads—the gasoline excise tax on a per gallon basis—has only been raised on two occasions in
the past 23 years,and in aggregate has grown at a much slower rate than travel demand.
Rescue Transportation Components
To address key elements of the problems cited above,Rescue Transportation can be sub-divided into four
major components as follows:
❖ Firewall for Transportation Funds. This element,which would constitutionally protect
transportation funds from diversion and thereby provide more certainty and predictability,is the
most critical component. It would bar loans or diversions of transportation revenues by the State,
for example to the General Fund. It is somewhat similar to the recently passed Proposition 1A.
❖ Institutional Changes. The institutional framework within which Caltrans must work is fraught
with inefficiencies. A range of improvements is possible here. The proposal suggests removing
Caltrans from legislative budgeting and placing it under the direction of the California
Transportation Commission(CTC),which would serve as a board of directors and provide a
model more similar to the Self-Help Counties. Oversight and authority the nP,pamn�„rspf
Finance,General Services,and Personn dirimigtintinn
the tate eisonnel Board. Caltrans would be shifted to a biennial (every two years)budget that
would—be synchronized with the-adoption of the biennial State Transportation Improvement l
Program(STIP). While provisions of the civil service system and PERS membership are J
envisioned to be retained,salaries would be set based on market conditions,probably including
geographic differentials,in order to retain high quality staff throughout the Department. The
CTC would appoint the Caltrans Director and Chief Legal Counsel,to provide a high level of
professionalism and continuity across changes in Administration.
❖ Project Delivery Enhancements. Caltrans,and local agencies,would be provided with a
broader range of delivery and related mechanisms, including design-build authority,the ability to
pay for bids and proposals when appropriate,toll road authority, assured contracting out authority
for a broad range of services,and other mechanisms.
• Transportation Financing: Biennial Report and Revenue Adjustments. Potentially the most
j controversial provision of the proposal would require the CTC to conduct biennial reviews,in the
years between STIP and budget adoption,regarding the adequacy of transportation revenues to
preserve the existing system and provide necessary expansion. The report would address the state
highway and intercity rail system,preservation and critical expansion of the local streets and
roads system,and the capital needs to sustain and expand local transit systems. If the CTC
determines that adjustments are wan-anted,it would have the authority to adjust transportation tax
and fee rates once every two years,within constraints. The adjustment would take effect within
90 days unless the.Legislature enacted a bill,by'/<vote of each house and the bill received the
signature of the Governor,that voided all or part of the rate adjustments.
The Coalition looks forward to receiving the comments and conceptual position of public transportation
agencies,and the comments and advice of the private sector,relative to each of the above categories and
their components. We would appreciate your input by January 10,2005,so that we can decide on the
next steps to take towards implementation of some or all of the components of Rescue Transportation.
Your comments can be sent to me at the address below,or emailed to me at rmccleary-7@ccta.net.
Robert K. McCleary, Executive Director 3478 Buskirk Ave.,Ste. 100 Pleasant Hill, CA 94523-7311
Phone: 925-407-0121 Fax: 925-407-0128 Website: htip:llwww.ccia.net /1l
6- �-' g_,
GENERAL
GOVE ■
NMENT
` IIII ' II � III
LAO-�
3
all
60 YEARS OF SERVICE
2004-05 Analysis
A+"
F- 78 General Government
HOUSING AND COMMUNITY DEVELOPMENT
(2240)
The mission of the Department of Housing and Community Devel-
opment (HCD) is to help promote and expand housing opportunities for
all Californians.As part of this mission,the department is responsible for
implementing and enforcing building standards. It also administers a
variety of housing finance, economic development, and rehabilitation
programs. In addition,the department provides policy-advice and state-
wide guidance on housing issues.
The budget proposes expenditures of$619 million for 2004-05.Spend-
ing related to the Proposition 46 housing bond accounts for more than
$400 million of this amount.The proposed General Fund expenditures of
$14 million—largely for emergency shelter assistance and the operation
of migrant farmworker housing—is a 9 percent decrease from the cur-
rent year. Federal funds account for $147 million of the proposed bud-
get-year expenditures,primarily for the Community Development Block
Grant and Home Investment Partnership Act programs. Special funds
provide the remainder of the department's expenditures.The department
has a proposed staffing level of 481 personnel-years.
MANDATE FOR REGIONAL PLANNING
CONTINUES TO SUFFER FROM INEFFECTIVENESS
The regional planning mandate costs much more than the Legislature
expected and does not ensure the construction of affordable housing. We
recommend that the Legislature eliminate the mandate to save the
General Fund about$4 million in annual liabilities.
As part of its general plan, every city and county is required to pre-
pare a "housing element" which assesses the conditions of its housing
stock and outlines a five-year plan for housing development.Unlike other
components of a local government's general plan, the housing element
2004-05 Analysis
9
I 1 i
Housing and Community Development F-79
must be approved by the state—an activity performed by HCD. Despite
the legal requirement of having a housing element approved by HCD,
less than 60 percent of local governments currently meet this obligation.
Proposal to Continue Deferral of Costs
Reimbursable Mandate for Some Costs. The basic requirement for
cities and counties to develop a housing element(and to have it approved
by the state) predates the mandate reimbursement process. The state,
however, has since added reimbursable requirements—such as the re-
gional allocation of housing units. Specifically, the state is required to
pay regional councils of government(COGs),cities,and counties for these
more recent requirements:
• Regional COGS. Reimbursable costs include expenses related to
the administrative costs of distributing the region's total hous-
ing goals to individual communities, including public meetings
and any necessary.revisions.
• Cities and Counties.Reimbursable costs include expenses related
to reviewing the COG's allocation and examining a variety of
specialized housing factors in their housing element.
Governor Proposes Deferring Reimbursements Again.As with many
other mandates. the 2003-04 Budget Act appropriated only$1,000 for the
regional planning mandate—in effect deferring (with interest) the costs
of reimbursements to local governments.For 2004-05, the Governor pro-
poses to again defer these payments. During this deferment. local gov-
ernments are still required to follow the statutory requirements, and the
state continues to accumulate a financial liability for the mandated costs.
Mandate Ineffective.In the 2003-04 Analysis,we reviewed the regional
planning mandate's effectiveness(please see pages F-94 to F-97).We found
the following:
r Tremendous Variation in Claim Costs.The amounts of the claims
from local governments vary tremendously—even for claims from
similarly sized jurisdictions. Local governments have broad dis-
cretion as to what level of effort is appropriate under the man-
date.
• High Claims Do Not Lead to Compliance. Spending time and
money on mandated activities does not guarantee an increased
number of state-approved housing elements. Some jurisdictions
achieved HCD approval while seeking very little in reimburse-
ments. Other jurisdictions submitted sizable claims but never
obtained state approval.
Legislative Analysts Office
F-80 General Government
• Planning Exercise Not Tied to Results. The current process has
few incentives to encourage local government compliance and
accountability.Little follow-up effort is made to ensure that plans
are followed and affordable housing is actually built.
While the concept of state guidance and oversight an housing produc-
tion has merit, the mandate has not achieved its intended results.
Recent Developments Add to Case Against Mandate
Since our analysis last year, there have been three major develop-
ments related to the regional planning mandate, as we discuss below.
Mandate Makes No Difference in Housing Production.Last year, the
Public Policy Institute of California (PPIC) released a comprehensive re-
view of the state's housing element lay. The study compared the hous-
ing production during the 1990s of those jurisdictions which had received
HCD approval on their housing elements to those which had not. The
study found that there was no significant difference in housing production
between those cities in and out of compliance.
Costs Continue to Rise.Last year, in reviewing submitted claims for
the years 1998-99 through 2001-02,we found that local governments had
submitted claims totaling$9.9 million. In each of those years, the annual
budget bill provided less than$1 million for the reimbursements of local
governments.We were concerned that the mandate was costing the state
about three times more than the Legislature expected. Since last year,
local governments have amended and updated their claims.As a result,
for those same four years, total claims now total $13.7 million. In other
words,the costs for the mandated activities have risen to about four tilnes
the amount the Legislature expected.
Working Group Has Not Focused on Costs. In the summer of 2003,
the department convened a working group of local government, hous-
ing, and business representatives in order to address ongoing problems
with the overall housing element process. As a result of the working
group's meetings, the department has begun implementing changes in
its review process for housing elements to improve consistency. In addi-
tion,the department reports that the working group has reached concep-
tual agreement in several areas and hopes to sponsor legislation this year
implementing reforms. The department and the working group, how-
ever,have not dedicated much effort to addressing the rising costs of the
mandate.
2004-05 Analysis
CU (' l
Housing and Community Development F-81
Mandate Not Worth the Cost
Recommend Eliminating Mandate. The recent PPIC study and the
mandate's rising costs add further doubt to the mandate's effectiveness.
Based on this evidence.we conclude that the current process is not worth
the $4 million it will cost to continue in 2004-05. Consequently, we rec-
ommend that the Legislature eliminate the existing mandate. As noted
above, the mandate only applies to specific components of the housing
element process.Even with the repeal of the reimbursable components of
the process, the basic requirement to develop a housing element would
not change. Instead.the more recent requirements simply would become
advisory rather than required.
Better to Start From Scratch.If the Legislature wishes to impose cer-
tain mandated requirements, we believe the best approach would be to
"start from scratch." The broad discretion of the existing mandate would
make it difficult to simultaneously reduce costs and maintain existing
requirements.A new process for planning and building affordable hous-
ing in the state could be developed through the normal legislative pro-
cess.Any proposals from the department's working group could be inte-
grated into that process.
OTHER ISSUES
Transfer School Facilities Fund Balance
The state's school facilityfees reimbursement program has available
bond funds that will meet the program's needs throughout the decade.
We recommend that the Legislature transfer to the General Fund the
available $5.6 million in nonbond funding. (Transfer $5.6 million from
Item 2240-115-0101.)
History of General Fund Spending. The School Facility Fee Afford-
able Housing Assistance Program reimburses the purchasers of new
homes for some or all of the school facility fees paid on their homes.Al-
though the funds are in HCD's budget, the program is administered by
the California Housing Finance Agency. From 1998-99 through 2001-02.
the Legislature appropriated $27 million for this programs (net of vari-
ous transfers). Due to low demand for the program, concerns about the
program's design,and the state's worsening fiscal condition,Chapter 114,
Statutes of 2001 (AB 445, Cardenas), sunset the program at the end of
calendar year 2001. (Please see our January 2001 report evaluating the
program.) Chapter 114 returned the remaining program dollars to the
General Fund but authorized any subsequent payments from homebuy-
ers (for instance, if they sold their home before the required five years of
Legislative Analyst's Office