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Report No: Meeting Date:

Alameda-Contra Costa Transit District

STAFF REPORT TO: External Affairs Committee

AC Transit Board of Directors

FROM:

SUBJECT:

David J. Armijo, General Manager

Monthly Legislative Report

BRIEFING ITEM

RECOMMENDED ACTION(S):

Consider recommending receipt of the monthly legislative report.

EXECUTIVE SUMMARY:

15-018 January 28, 2015

The 114th Congress has convened, some committee assignments have been announced.

A $1.1 trillion continuing resolution omnibus appropriations bill was passed on December 19, 2014 for FY'15.

Governor Brown released his proposed state budget for FY 1015-16 which generally maintains transportation spending at its current levels.

BUDGETARY/FISCAL IMPACT:

There is no budgetary or fiscal impact associated with this report.

BACKGROUND/RATIONALE:

Federal Legislation Update

1} The 114th Congress convened on January 6, 2014.

Speaker John Boehner was relected as Speaker of the House of Representatives as expected and Kevin McCarthy (R-CA) will be the Majority Leader. Congresswoman Nancy Pelosi (D-CA) was reelected as the Minority Leader as was Steny Hoyer (D-MD) to be the continuing Minority Whip. The House Transportation and Infrastructure Committee will continue to be chaired by Bill Shuster (R-PA) and the ranking member is Peter Defazio (D-Or). The Senate Banking Committee will be chaired by Richard Selby (R- AL) and the ranking member is Sherrod Brown (D-OH). The Senate Environment and Public Works Committee will be chaired by Jim lnhofe (R­OK) and the ranking member will be Barbara Boxer (D-CA).

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Report No. 15-018 Page 2 of 2

2) A $1.1 trillion FY'15 continuing resolution appropriations package passed on December 29, 2014.

The spending bill will fund most federal government departments through September 30, 2015. A notable exception is the Department of Homeland Security which is only funded through February 28, 2015. The Department of Transportation was funded at the same levels as last year.

State Update

1) Governor Brown released his proposed FY 2015-16 budget proposal

Transportation spending is flat as is the projected State Transit Assistance allocation. The Governor has made it a point to focus on highway spending as opposed to local streets, roads and transit.

ADVANTAGES/DISADVANTAGES:

This report is being provided to inform the Board of monthly legislative activities and to seek its approval to support or oppose legislation affecting AC Transit. This provides clear direction to legislators, and other bodies of AC Transit's positions.

ALTERNATIVE ANALYSIS:

This report provides an update of monthly legislative activities. AC Transit could opt to defer from legislative positions and operate without making its positions known, leaving the District vulnerable to unfavorable legislation.

PRIOR RELEVANT BOARD ACTIONS/POLICIES:

Staff Report 12-253: 2013 Federal and State Legislative Advocacy Programs

ATTACHMENTS: 1: Transportation Update from Van Scoyoc Associates 2: Monthly Federal Report from Van Scoyoc Associates 3: State Legislative Report from Platinum Advisors 4: FY 2015 Federal Advocacy Program 5: FY 2015 State Advocacy Program

Department Head Approval: Aida R. Asuncion, Interim Chief Planning, Construction and Engineering Officer

Prepared by: Beverly Greene, Director of Legislative Affairs & Community Relations

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VANSCOYOC

Steven 0. Palmer, Vice President Dan Neumann, Director David Haines, Manager

This Week

A S S 0 C I A T E S

Transportation Update January 12,2015

SR 15-018 Attachment 1

The Senate and House are both in session his week, but will recess on Thursday and Friday for the Republican Party's annual Member retreat.

FY 2015 Homeland Security Appropriations. The House is expected to begin debate on legislation to fund the Department of Homeland Security (DHS) for the remainder ofFY2015. DHS is currently funded through February 27, 2015.

Last Week

Congress returned to Washington on January 6 to begin the 114111 Congress. John Boehner was re­elected as Speaker of the House, despite several defections among House Republicans. Republicans officially took control of the Senate for the first time since 2006.

FY 2015 Homeland Security Appropriations. Late Friday, it was announced that House and Senate leaders had agreed to legislation that will fund the Department of Homeland Security for the remainder of FY2015. The bill funds TSA at $4.8 billion, a decrease of $94 million over FY2014. While most programs will have a slight reduction in their funding, the bill does increase funding for private screening at airports and for procurement and installation of Explosive Detection Systems. The bill also directs TSA to continue staffing airport exit lanes where the agency had been providing this service on December I, 2013. House Republicans are expected to attach a provision to the bill addressing President Obama's recent Executive Order on immigration.

Floor Passage: Terrorism Risk Insurance. The House and Senate both passed legislation to renew the Terrorism Risk Insurance Act through 2020. This program, enacted in the wake of the September 11 th attacks in 2001, provides a federal "backstop" to private insurers in the case of a major terrorist attack. The President is expected to sign the legislation.

Retirement: Senator Barbara Boxer. Senator Barbara Boxer (D-CA), the Ranking Member of the Senate Environment and Public Works (EPW) Committee, which has jurisdiction over highway issues, announced that she will not run for re-election in 2016. Senator Boxer previously chaired the

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EPW Committee from 2007-2014. She has served in the Senate since 1993 and prior to that served ten years in the House of Representatives.

Appropriations Subcommittee Ranking Members. On January 9, Ranking Member Barbara Mikulski (R-MD) announced the Ranking Members for the twelve subcommittees of the Senate Appropriations Committee. Senator Jack Reed (D-R!), will be the new Ranking Member of the Subcommittee on Transportation and Housing and Urban Development. He replaces Patty Murray (D-WA) who will now be the top Democrat on the Subcommittee on Labor, Health and Human Services, and Education. The new Ranking Member of the Subcommittee on Homeland Security will be Senator Jeanne Shaheen (D-NH), replacing Mary Landrieu (D-LA), who was defeated for re­election ..

Senate Commerce Subcommittee Chairs. On Friday it was announced that Senator Deb Fischer (R­NE) will be the new Chairman of the Subcommittee on Surface Transportation and Merchant Marine Infrastructure, Safety, and Security. Senator Kelly Ayotte (R-NH) was named as the Chairman of the Subcommittee on Aviation.

Department of Transportation

Nomination: FTA Administrator. On January 8, President Obama again nominated Therese McMillan to be Administrator of the Federal Transit Administration. The Senate returned her nomination to the President at the end of the 113'h Congress last month.

Nomination: FRA Administrator. President Obama intends to nominate Sarah Feinberg to be the next Administrator of the Federal Railroad Administration. Ms. Feinberg currently serves as the ChiefofStaffto DOT Secretary Anthony Foxx.

Rulemaking: Safety Management Systems. The FAA has issued a final rule that requires U.S. cargo and passenger airlines to have a Safety Management System (SMS) in place by 2018. SMS systems are comprehensive approaches to managing safety risks on an airline. Each airline will be required to submit its implementation plan to the FAA by September 2015, with full implementation of the plan required by March 2018.

Government Accountability Office

Report: Nonemergency Medical Transportation. On January 9, GAO released a report on nonemergency medical transportation services provided across six federal departments, including the Department of Transportation. GAO found that these programs are not well coordinated, and recommended that DOT publish a new strategic plan for coordinating these programs.

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VANSCOYOC ASSOCIATES, INC.

101 CONSTITUTION AVENUE, N.W.

SUITE 600 WEST

WASHINGTON, D.C. 20001

SR 15-018 Attachment 2

MONTHLY REPORT FOR

ALAMEDA-CONTRA COSTA TRANSIT DISTRICT

DECEMBER2014

In accordance with the agreed-upon terms and conditions of the consulting agreement between Van Scoyoc Associates ("VSA") and Alameda-Contra Costa Transit District ("AC Transit"), what follows is a memorandum noting actions and duties performed on behalf of AC Transit in December 2014.

Congressional

• Arranged and participated in meetings with the offices of Representatives Eric Swalwell, Barbara Lee, and Mike Honda, to discuss the East Bay BRT project, as well as to update them on other transit service issues.

• Informed AC Transit officials that Congress would be debating/voting on the tax extenders bill, which includes a one-year extension of both the alternative fuels tax and the transit benefits provisions. Subsequently, VSA informed AC Transit officials of the tax extenders bill passing the Senate and being sent to President Obama to become law.

• Provided AC Transit officials with summary of omnibus appropriations bill, as well as highlights of areas of that bill that impact AC Transit, including AC Transit's prospects for receiving Small Starts funding in FY 2015 under the agreement. VSA also informed AC Transit officials on the lack of funding for high speed rail projects (Trans bay Terminal) and on final passage of the funding bill.

• Attended a lunch held by the Golden State Society, at which Majority Leader Kevin McCarthy ~R-CA) spoke. Summarized Mr. McCarthy's speech on the agenda for the 1141 Congress for AC Transit.

• Provided information to AC Transit officials on Senate Commerce, Science, and Transportation Committee's hearing reviewing Dr. Mark Rosekind nominated to be NHTSA Administrator, Mr. Carlos Monje Jr. nominated to be Assistant Secretary for Transportation Policy, and Dr. Tho Bella Dinh-Zarr nominated to be a Member of the National Transportation Safety Board. Later, informed AC

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Transit officials that Mr. Rosekind had been confirmed as NHTSA Administrator, while the nominations of Mr. Monje and Ms. Dinh-Zarr had not been acted on.

• Informed AC Transit that the Senate had adjourned without approving the nomination of Therese McMillan to be FT A Administrator.

• Informed AC Transit that Congressman John Delaney (D-MD) had introduced a bill to fund the Highway Trust Fund through taxes on repatriated funds.

• Alerted AC Transit when the 1131h Congress adjourned for the remainder of2014.

Administration

• In response to an inquiry from AC Transit, provided information on the expected timeline for FTA's announcement ofNew Starts and Small Starts funding allocation for FY20 15.

Other

• Represented AC Transit in regular meetings of the Bus Coalition, a coalition working to increase federal funding for bus transit systems. This included an in­person meeting of Bus Coalition members during the annual APTA conference in early Decem her.

• Participated on AC Transit's behalf in a webinar and conference call hosted by the Eno Center for Transportation and the American Society of Civil Engineers on Life Cycle Cost Analysis for highway materials. Provided AC Transit with a summary of the call.

• Reviewed the discussion held during the December AC Transit Board meeting on the Lifeline program. VSA subsequently responded to inquiries on the federal role in funding JARC and other related local programs.

• Attended the American Public Transportation Association (APTA) Legislative Committee meeting with AC Transit officials.

• Met in Washington, D.C. with the General Manager and Director of Legislative Affairs and Community relations to discuss AC Transit's federal agenda.

• Confirmed VSA participation at the January 28,2015 AC Transit Board meeting.

• Alerted AC Transit to Government Accountability Office (GAO) report on federal programs that provide transportation services for older adults.

• Informed AC Transit of GAO report on the efforts of transit agencies to make their systems resilient to catastrophic events.

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• Provided weekly summaries that included information on transportation-related activity in Washington. The summaries noted relevant hearings, announcements, and legislative proposals.

• Maintained regular contact with AC Transit government affairs officials.

• Participated in the bi-monthly New Starts Working Group calls, representing AC Transit in discussions about pending federal issues.

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SR 15-018 Attachment 3

January 13, 2015

TO: Beverly Greene, Director Community Relations & Legislative Affairs

FR: Steve Wallauch Platinum Advisors

RE: 2015-16 Budget Summary

Governor Brown released his proposal for a $114.8 billion budget for 2015-16. This includes about $113 billion in 2015-16 revenues and a carryover of $1.4 billion from 2014-15. Total reserves will reach $3.3 billion, which includes $534 million in regular reserves and $2.8 billion in the Rainy Day Fund. Governor estimated that 2014-15 revenue will end $2 billion higher than the original estimate, and revenues will continue to grow in 2015-16 by nearly $6 billion .

The Governor stays the course on prioritizing the retirement of existing debt and tackling longer term liabilities. The budget repays the final $1 billion owed to schools and makes the last payment on the $15 billion in Economic Recovery Bonds. It also pushes for a cost sharing agreement for retiree health costs as part of renewal of labor contracts.

While spending is marginally up in most program areas, the budget proposal does not begin to address the restoration of cuts that social programs endured during the recession. From the Legislature's perspective the release ofthe budget is a starting point for its 6 month review. In light of the increased state revenue and rebounding economy many Democrats in the Senate and Assembly will pursue proposals to ensure that the budget invest s in the needs of all Californians.

LAO's in itial review finds the Governor spending plan prudent overall. While the Governor includes robust revenue growth, the LAO predicts revenues could likely exceed the Governor's projections in 2015-16. Baring a sustained drop in the stock market, the LAO estimates revenues could grow beyond the nearly $6 billion assumed by the Governor by another $2 billion. However, this growth is dependent on the volatile stock market, where down turns emerge without warning.

Transportation: The Budget summary essentially maintains the status quo for transportation spending, and instead focuses on the looming need to address how the state will maintain the existing transportation system. As stated in the Budget Summary, "Of nearly $11 .5 billion in ongoing transportation revenues available for the state's transportation infrastructure, about 70 percent is devoted to local s treets and roads, transit, capacity expansions, and debt service. As a consequence, the state's highway system has deteriorated over time."

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77

SR 15-018 Attachment 3

The Summary outlines the existing investments being made in local streets and roads, public transit, and capacity improvements, and contrasts that with the relatively small portion of funds directed to highway repairs and maintenance. The summary also mentions the significant investment Self-Help counties have made toward local transportation improvements, as well as how some of these improvements further compound unfunded state maintenance costs.

To address the need to provide $6 billion in annual unfunded maintenance needs the Summary mentions a wide range of options being examined as outlined below- except bonds. The Summary states, "Additional borrowing through bonds would not be appropriate, not only because the funding gap is an ongoing one, but also because roughly one out of every two dollars spent on bond funded infrastructure goes to pay interest costs rather than construction costs, and currently 9 percent of total transportation revenues are spent on debt service."

• Road User Charge Pilot Program- CaiSTA and CTC have commenced the process of studying the use of a road user charge in California. SB 1077 (Chapter 835, statutes of 2014) direct the completion of a report that will lead to a pilot program by June 30, 2018. At the press conference, Governor Brown stated, "I'm going to speed it up." To accelerate this process the 2015-16 budget includes $9.4 million and 5 position to implement SB 1077 and implement a pilot program to explore a potential mileage based revenue collection system.

• Toll Roads- The Summary points to the extensive network of carpool lanes which have unused capacity during rush hour. These lanes could be converted to express lanes. The Administration is proposing legislation that will restore the authority to for new high-occupancy toll lane projects, including the conversion of existing carpool lanes to toll lanes.

• The state must consider other funding options that address the funding needs, including pay-as-you-go funding structure that aligns funding with use of the system. The options should also consider the weight of vehicles. Specific examples were not provided.

• New local-option funding revenues should also be considered.

Transportation Management Systems:_The Budget includes an increase of $6.9 million and 64 positions to maintain and improve the Transportation Management System, such as ramp meters, and the associated communication links with traffic management centers. Of these resources, $3 million and 20 positions will be used to complete a data-driven, performance­based pilot study of the effectiveness of Transportation Management System elements in increasing throughput and managing capacity in two primary corridors; one in the north and one in the south.

Streamline Relinquishments-The Governor is proposing budget trailer bill language that will streamline the state highway relinquishment process for segments that primarily serve regional or local transportation needs. Draft language should be available by the end of the month. While relinquishments will reduce the state's long-term maintenance costs and provide local government's greater flexibility for projects along these routes, reducing the number of highway miles in a given county will also reduce the amount of "county share" dollars allocated to a county through the STIP.

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SR 15-018 Attachment 3

Project Initiation Documents: The Budget includes $3.4 million and 25 positions to support an additional $800 million in project development work for various state and local transportation projects. The estimated $800 million in project development work includes $300 million in increased SHOPP and local sponsored projects, and the need to develop a $500 million "shelf" of projects. The creation of the shelf projects will be on a first-in-first-out basis for priority projects, such as pavement, bridge and mobility projects.

State Transit Assistance: The budget estimates that $388 million will be allocated to transit operators through the "base" STA allocation. This is roughly on par with the $386 million expected for the current fiscal year. However, it is unclear if these estimates have taken into consideration the significant drop in diesel fuel prices. In addition, the STA line item in the budget also includes the estimated $50 million in cap & trade revenue that will be allocated through the Low Carbon Transit Operations Program.

Cap & Trade Expenditures: The Governor's Budget estimates that the cap & trade auction will generate $1 billion in 2015-16. The allocation of these funds follows the distribution formula enacted this year and the 40% "discretionary" portion largely mirrors the allocations made in the 2014-15 budget. The funds are proposed to be allocated as follows:

2015-16 Cap and Trade Expenditure Plan (Dollars in Millions)

l~tment Categex Deg:rlment Progam

High-Speed Rail Authority Hgh-Speed Rail Pr<;1ect

Str.e Transit Assistance low Carbon T tan Sit

Sustain~e Communities and Transportation PQency

Oean Transportation -

Strategic Gf~\th Co~dl

Alr Resources Board Low Carbon Transportation

Department of Conmwvty Energy Efficiency Services aoo Dev~opment Upgrades/Weathenzaaon

Energy Effioency and - ------~-~~~~~~ Clea-J Energy En"""y Comm ssion Energy Efficiency for Public

- · u Buildn

Department~ Food and Agricu W31 Energy and Agriculture Opera tiona! Efficiency DEpartment oi Fish and Wedands and W a1ershed Wadre Restor.1tion

Natural R~~ "bepartment-~-~":":F='ore_stry ___ F:i'~e-:P::-rev--ent--:-ion- and UJban and Waste DIVerSIOn and Fire Protection Forest p ·ects

Cai R~e

Total

AmoiK!t

S250

$50

5100

S200

S200

$75

$20

$15

$25

$42

$25

$1 .002

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SR 15-018 Attachment 4

2015 Federal Advocacy Program

Funding

• FY 2014 Grant Opportunities- Secure federal funds for key capital projects and support funding for 2015 Project Priorities for:

o East Bay BRT Improvements within the Small Starts Program and other programs

o AC Transit's Intelligent Transportation and Communication System upgrades o Bus lifting equipment program

o Rehabilitation of aging facilities

o Zero Emission Bus Programs

• Advocate for supplemental funding through the Federal Transit Administration to offset rising operating costs without jeopardizing total funding available for capital projects.

• Support funding for the Transbay Terminal.

• Support/seek additional funding for lifeline services including, but not limited to services for access to work, school or medical facilities.

• Support efforts to rescind the planned across-the-board cuts to all federal programs, called "Sequestration," as enacted under the Budget Control Act of 2011.

Transportation Authorization Principles

• Support efforts to increase the gas tax or to increase other revenues to replenish and sustain long-term growth of the Highway Trust Fund/Mass Transit Account.

• Support transportation authorization reform that emphasizes greater funding levels to urban mass transit systems, and oppose efforts to reduce spending on transit formula programs.

• Support FTA and Congressional efforts to make State of Good Repair for transit bus systems a strategic priority.

• Support broad funding eligibility for BRT projects in federal transit programs, including New Starts and Small Starts programs,

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• Seek revisions to the Metropolitan Planning Organization (MPO) grandfather clause that supports the direct representation of transit properties on local transportation policy boards.

• Support legislation through MAP-21 for safety requirements based on agency size

Other Advocacy

• Advocate for transit-supportive legislation that mitigates global warming and/or calls for environmental stewardship and related funding.

• Support funding and coordination between Health and Human Service (HHS) agencies and other transportation agencies to provide services to HHS clients.

• Support modal parity in the commute tax benefits.

• Support legislation that relieves the fiscal burden of mandatory regulations.

• Support legislation that encourages Single Payer health insurance.

• Advocate for American with Disabilities Act improvements

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SR 15-018 Attachment 5

2015 State Advocacy Program

Funding

• Support efforts to implement the Moving Ahead for Progress in the 21st Century Act (MAP-21) and future transportation authorizations that at least maintains funding level for mass transit projects and programs for bus operators in the Bay Area.

• Support the development and implementation of an expenditure plan for AB 32 cap and trade revenue that provides an equitable investment in mass transit capital improvements, operations, and infill/transit oriented development.

• Pursue and support funding for Zero Emission Bus Programs

• Support efforts that create new sources of operating funds with equitable distribution to reflect urban transit needs.

• Support efforts to sustain existing transit revenues.

• Support efforts that would exempt public transit providers from state sales tax.

• Support efforts to provide funding for lifeline services including, but not limited to, services for access to work, school or medical facilities.

• Support local ability to increase fees and gas taxes to be used for local mass transit purposes.

• Support legislation and programs that would provide funding to offset the costs of global warming initiatives, clean air and clean fuels and implementation of AC Transit's Climate Action Plan.

• Support congestion pricing strategies and legislation that provide an equitable multi­modal distribution of generated revenues.

• Support legislative or administrative action to remove State barriers so that Medicaid transportation funds can be used for public transit services, including ADA paratransit services.

• Support funding and coordination between Health and Human Service (HHS) agencies and other transportation agencies to provide services to HHS clients.

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• Support legislation and programs that would provide funding for employee benefits programs.

• Support funding initiatives that relieve the fiscal burden of mandatory regulations.

Equipment and Operations

• Support legislation or administrative action that would direct Caltrans to establish and maintain HOV lanes on state highway routes and to improve existing HOV lane management to maximize throughput.

• Support incentives to provide bus contra flow lanes on the San Francisco-Oakland Bay Bridge to/from the Transbay Terminal.

• Support legislation to exempt public transit vehicles from state and local truck route ordinances.

• Support legislation or administrative action that would direct Caltrans to permit permanent use of freeway shoulders by public transit buses.

Transit Incentives

• Support legislation to provide incentives for employees and employers to use public transportation to commute to work, including tax credits for purchasing transit passes.

• Support Clean Air Initiatives that encourage increased public transit use.

• Support incentives that would give auto insurance credits to heavy transit users.

• Support legislation to provide incentives for local governments and developers to incorporate transit passes into the cost of housing.

Environment and Transit Supportive Land Use

• Support efforts that provide a new form of tax increment financing that promotes economic investment through transit oriented development, and requires the approval of all affected taxing entities.

• Advocate for transit-supportive legislation that addresses climate change, healthy communities and environments.

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o Foster transit supportive land use initiatives that require coordination with transit providers in the initial stages of local planning or project development that impacts transit, including density level decisions or transit oriented developments (TODs); and advocate for the required use of:

o Transit streets agreements, and

o Complete streets plans in which local transportation plans anticipate use of all modes.

o Support legislation that requires reporting of Vehicle Miles Traveled (VMT) annually through DMV renewal.

Policy Interests

o Support simple majority vote for local transportation ballot tax initiatives.

o Support legislation to allow District to ban persons for specified offenses from entering district property.

o Seek revisions to the Metropolitan Planning Organization (MPO) grandfather clause that supports direct representation of transit properties on local transportation policy boards.

o Support legislation for STA formula reform that includes federal operating funding as eligible revenue.

o Support efforts that maintain existing Workers' Compensation regulation.

o Consider efforts to reform tort general damages

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