Legislative Review Committee - Regular Meeting

I'd like to call this January, June 1st, Legislative Review Committee meeting to order.

Okay.

So let's see. Let's start with a, I guess, roll call.

Chair Wong.

Here.

Vice Chair Chow. Here.

I guess everyone's here.

It's all right. We will begin. So any oral communications?

We have... No speakers.

All right. And let's do the approval of the minutes. So the nomination for the approval of the minutes. Motion for approval. All right. Motion for approval. Second. Roll call.

Chair Wong.

Aye.

Vice Chair Chau. Aye. Motion carries unanimously.

Okay, moving into new business, legislative update. Let's take a look at the legislative update and see if there's any input on the bill tracking list, as well as positions from SCC, SCC, Cities Association, EMB, CalCities. So let's take a look.

Chairman, I have a suggestion to have a new additional SMB.

Oh, great question.

We are lobbyists.

I don't see any.

Yes, we do have Jason.

Oh, let's bring him in.

Does Jason want to give an update?

Yeah, let's do an update.

We can hear you now, finally. Good. How about that? I think Paul is in the waiting room as well. I don't know if it gives me a camera option.

Can we bring them in? Let's see.

Okay. It should be able to use their cameras.

Let's take a look. I'll join with them.

Audio.

Let me join with them. See what we got here.

Oh, here we go. Join us.

Oh, good.

There we go. And there's the video. There we go. Welcome, welcome. There we go.

Thank you. Good afternoon, everyone.

So as far as just very briefly on the update, as you likely know, just the high level, the governor did release his May revise. There's been about a $16 billion divide between the governor and the legislative analysts, nonpartisan legislative analysts. The good news, I guess, in the near term is the governor's numbers are actually proving to be quite accurate. The state general fund has benefited from about $6 to $8 billion in, I'll call it new money. It's the over-reliance or reliance on capital gains and the ultra-wealthy, the NVIDIA IPOs as an example, and the projection for 2020. this budget year is for that revenue to continue to flow because of OpenAI, ChatGPT, and probably most notably SpaceX IPO on the horizon. So on the budget, we will have a adopted budget by June 15th, but the revenues again in the near term are looking more positive. Now, in order for all of those IPOs to do well. There's the flip side, which is how many jobs get displaced when OpenAI, ChatGBT, and the others come online. So there is that counterbalance that the legislature, governor on down, are starting to pay attention to. And we'll see how that goes. But obviously, labor unions and others share those concerns. On the list, I know you have quite a bit of materials in the packet. I would note that Last week, Friday was the deadline, but they adjourned late Thursday in the assembly for all bills to pass out of the House of Origin. And so the majority of bills did pass the two on the. legislative tracking list that I would note that did not pass or, and they're not key ones, but AB 2192 was a sales and use tax exemption for farm equipment by Assemblymember Jeff Gonzales. That did not pass. And then Assemblymember Corey Jackson had AB 2214 for governance finance deposits. And that bill also did not pass and they hadn't moved since January. So no surprises there, but Otherwise, the, I guess, heightened level of scrutiny for bills and vetting is going to start between now and July 2nd, because July 2nd is the deadline for bills to pass out of the policy committees in the second house. So all assembly bills have to get out of the Senate policy committees and Senate bills out of the assembly by July 2nd. Lastly, from July 2nd to August 2nd, they go on summer recess. And I know it sounds like a lot of dates, but the key date, August 31st, is sine die, meaning final adjournment. So if you do the calendar math, we're down to eight weeks of session and about 1,800 bills. So I'll stop there and happy to answer any questions.

Any questions on the bills that you're looking at or the ones that we're in?

So when we walk in, when...

We have a list right now of those bills that are highly likely to pass, highly likely not to pass, right? We kind of have some kind of probability on those as well? Yes. On the bill tracking list?

Yes.

Okay.

And again, all of which have the bulk of the bills, once you get past appropriations, they moved out of the houses of origin, but it will be a higher bar to pass, if you will, for second houses. You get a natural deference when you have an assembly bill in front of your assembly committees versus an assembly bill in front of the Senate. So the numbers will pare down here shortly.

Okay. Yeah, let's take a look at the tracking list then and see if there's anything that you want to add, Liang, or if anyone else here has a suggestion on the tracking list, if there's anything that pops your mind as it goes through them. If there's anything you want to change, add, track. And do we get input as well from the rest of the council members as to what their interests were as well?

So council members can share with staff, but primarily it's the LRC that will.

Okay. I didn't know if there was any input that we're reaching out to them on or anything.

Yeah, I haven't heard anything, have you?

Okay.

Alright, so I want to make sure we got their input. If they had anything through staff that they might have suggested.

So how is the likelihood for that townhome act to pass? That will streamline the townhome development.

Yeah, kind of the buy right for townhomes. Buy right, yeah. We'll call it, it did move out of the assembly rather swiftly, 47 to zero out of the assembly, 33 abstentions, but I would note there were no no votes. It will, in the Senate, it'll face, I think, a little steeper climb, but it does have a fair amount of momentum. It's assembly member Sharon Quirk-Silva, and she's partnered with assembly member Buffy Wicks, who is Chair of Appropriations, so it has a fair amount of momentum.

So it will likely pass.

Are we saying it will likely pass?

I would say it's chances of passage I would put at 60-40. I mean, we're still working against it, but Cal Cities is asking for amendments to it rather than just outright opposition. And there's about 10 to 12 cities. So if local governments start to kind of raise up more, I think our chances of stopping it improve. But it's been moving with a lower level of opposition than, for example, the TOD bill, SB 79 last year. So the members... that have, I'll call it buyer's remorse on SB 79, this may be a little tougher vote, the Senate. I wouldn't call it a slam dunk. I'm sorry, I'm sorry, go ahead.

What kind of buyer's remorse you have heard for SB 79?

Well, what's happened is, for example, Assemblymember John Harabedian out of the Burbank area, he has legislation looking to try to clean it up for the impacts on his district. Assemblymember Josh Hoover, out of the Folsom area who voted for SB 79, now has a bill to exempt historic downtown districts, actually doesn't exempt, it allows you to move your high density, high rise housing to an alternative site away from your downtown historic district. So there's examples of members that, since having voted for it, are hearing from their local communities about the impacts and is generating the buyer's remorse I mentioned.

Are there any other ones that you want to take a look at? You can have a list.

How about those ones that I think it's trying to fix the housing element process? I think there was one that Cal City supported to about the review process. Maybe let me just ask, what bills are there that's trying to fix the current housing element process? Do you have a summary of what they are looking at right now?

There's several bills regarding the RHNA process. And if you don't mind afterwards, I'll send a summary because there's quite a few in that space. Last year, Cal City sponsored a bill. I want to say it was AB 650 by Assemblymember Papin that was vetoed. But there's still efforts to try to put some, for example, there was legislation in Los Angeles County to delay the RHNA process because so many of the cities didn't have certified housing elements. So there's a number of bills in that space, but what I will say is there's a number of efforts trying to put some consistency and predictability in the RHNA process because oftentimes what local agencies and what members are hearing is City of Cupertino could apply, submit your RHNA documents and your plans and you get a list of five revisions and you make those revisions and then all of a sudden you get three more that were not part of the original review. So they're trying to provide some predictability and consistency to the RHNA process and not have moving targets, if you will.

Great. A summary later will be great.

Happy to.

So on the tracking list, I mean, I think the important thing as we're thinking about these, are there certain ones that we will be talking to or bringing folks up to when we get to the next item number four? That's all. We can save that for the priorities portion, which is fine. I just want to make sure. I know we've got a big group that are cracking here. I don't know if there's anything that we've seen here that we would want to take off or we would want to add. I think that's probably the more important piece. Was it AB 1751, the missing middle townhomes one that you're looking at, or is that a different one?

Oh, yeah. Yeah, that was the one we were referring to.

I think that's the one you're looking for. Yep. So I'm looking at this AB 736. It's Affordable Housing Bond Act. So this will be assessed to be approved by voters in June 2nd, 2026. So this is now for the November ballot.

This bill has been sitting in the Senate, so it will have to be amended should the author decide to move forward with it. And that's a negotiation really that's come down to the author and the governor and legislative leadership. So it hasn't had any recent activity per se, but your point's a very good one. It's obviously not going to be on the ballot tomorrow, and they'll have to amend it ultimately should they decide to move forward with the $10 billion bond for either November or sometime thereafter.

So it sounds like this bill might not move forward. I'm just wondering, just curious, what's the holdup or resistance at this point?

It's really negotiations between the governor and assembly member Wicks and the speaker and the pro tem. It's on the Senate floor. It could move down to the governor very quickly if they reach an agreement, but the holdup is $10 billion of debt service given the state's general fund deficit and challenges.

Oh, so the governor has some concerns likely about it.

that's where the whole yes the governor has you know given prop four and the climate bond that was just passed by the voters and the five six billion dollars i believe um that will be going to the market the debt service on that it's a matter of how much bandwidth does the state have for bonded debt service just along the same line are there any other similar

bond major going to the November election?

As far as bonds, none that come to mind. The cap and invest program could ultimately end up becoming a bond. There's been talk of trying to do something for the insurance market on bonds and health care, given the So insurance and healthcare would be the other potential areas that a bond measure could come about because of the healthcare impacts of federal dollars potentially drying up, about a billion dollars worth. But thus far, nothing that has moved beyond where the housing bond efforts are.

I have two questions. Are you okay? All right. I have two questions. AB 1976 streets and highways, pedestrian bicycle facilities. How far along is that? And is that something we should take a position for? This is basically the one that makes a pedestrian mall officially a pedestrian mall with no other way of recourse to bring it back.

That bill is currently in the Senate. So that one passed out of the assembly is now in the Senate waiting to be heard in policy committee.

Okay.

And it's again, Assemblymember Buffy Wicks, Chair of Appropriations. So she does a lot in this space and it does have some momentum. The pedals are moving.

Literally, yes. And then on the land use housing, AB 1997, this is the one for just streamlining things through CEQA more quickly for housing development approvals. I understand why we're taking a position of opposition. Who's behind this one?

That bill's the housing advocates as well. It passed out of the assembly 71 to three. And so it too has a significant amount of momentum behind it. I was pulling the AIDS healthcare foundations to sponsor and no opposition thus far.

Okay. Something could happen on the other end, but not sure. Yeah.

Do you have anything else?

I do, but go ahead. Go ahead. Jump in.

I'm wondering about the e-bike bills. I think in the Cities Association, they had one bill on e-bike. I abstained at the time because I wasn't sure if we have policy on that, but I later checked that our legislative platform does say we want to support e-bike regulation. So I'm just wondering, do you know? Because that's an issue that has been coming up in our community.

AB 2346 is the one, I believe.

2346?

Yeah, look up 2346. It's about getting speed limits for e-bikes and regulating a speedometer. If you sell an e-bike, it has to have a speedometer as well.

Okay.

I think there's another one. I can't remember which one. I'm trying to pull it up right now.

2346 is a key one, appropriately noted, and the author is the chair of the Assembly Transportation Committee. I know this falls under item number four, but as part of our upcoming schedule of meetings in Sacramento on June 9th, we do have a meeting with Assemblymember Wilson, who's again the chair of transportation and the author of that legislation. There's been a number of think your community it's no surprise to you obviously as well but a number of tragic incidents um 80 year old man was hit a few weeks back in orange county by a 14 year old on an e-bike the district attorney is bringing charges against the mother and so it was in the city of lake forest so there's going to be be an ongoing and continued focus on e-bikes given the number of, I know here in the city of Davis had a fatality, someone struck on an e-bike. It's just, I guess I'm old enough. We used to call those mopeds. You pedal the pedals until the engine turned on and they're motorcycles now. I mean, some of them are exceeding 40 miles an hour.

Yeah. So what's the second deal you mentioned? Sorry. You mentioned two bills.

I thought there was a second one. I haven't found it yet.

I'm looking for it. So AB 2346 is a speed limit one.

Yes.

There is one that the Cities Association looked at. That's SB 1167. I think that has to do with the classification of the, whether they, some of them do require driver's license. And I think another issue is some of the e-bike is not even powered by pedal, it's powered by a throttle. And so there are different classification and, oh yeah, it's very hard to distinguish between different classes of e-bike.

So they are trying to make better marking, I think,

Yeah, and you'll see on the one you noted, which is also moving, SB 1167, it's looking to require a vehicle identification number for the bikes that exceed the 3,750 watts, but it also has, about eight to 10 co-authors, both Democrats and Republicans. And the point being is they're garnering bipartisan interest on e-bikes. So if it's agreeable to the committee, I'll add a report for Rena as previously mentioned, but also if you're okay with it, I'll send you a listing of active e-bike bills because there's about 10 to 12.

That would be great. That would be great. Yeah.

I could do it. i have a question then um we'll just keep swapping on ab2576 um this is the one on transit oriented housing is this really just designed to protect the historical districts or there's something else to it 576 there's more to it and there's ongoing discussions with um senator wiener on the bill the one that is for transit districts and i should know these numbers offhand but I'll tell you that the bill number is.

It's about any exclusions for historical districts which is great as want to make sure that's what we're supporting not not the notion of a transit oriented development at district so it's a be 2415 and that's by some of the river Hoover. Yeah. All right, I don't see that one, but 2415? Yes.

For the most part, these were numerically ordered. I'm looking at here.

Oh, I'm looking at the Cities Association one. Sorry about that. That's why. Got it.

Let's stop this one.

Yep, got it.

And also the fire safety is a focus. What kind of bills are there for fire safety, evacuation routes?

There's quite a few.

Also bills to address insurance costs.

There's 2517, right? The council supported, I think.

What other bills are there?

Well, there's SB 828, and that's having to do with explosives and basically the Esparto tragedy. Assemblymember Bennett has AB 1143. having to do with fire safety. And then there's talk of, and Assemblymember Calderon had legislation seeking to do so, but it hasn't really materialized. But there's talk of trying to come up with a plan to require the California fair plans to provide insurance that captures more than just fire safety. So right now, if you're in the fair plan, you also have to have a separate policy for your contents and and other exposure, they're trying to require, there's talk of requiring the fare plan to cover all aspects. Problem is the fare plan is one of the most expensive, if not the most expensive insurance option. And the concern is if you require them to cover your contents or any other exposure, it will even become that much more cost prohibited. So it's kind of an ongoing conversation around the fair plane.

Got it. Going back to AB 1732, which is CEQA exemptions for public higher education housing developments, what is the rationale to support that one? Oh, it's the YIMBYs that are supporting that one. Got it. I'm reading it backwards. Okay. Thank you.

All right.

This makes sense.

Jeremy, we've got a public comment.

Yeah, let's go to public comment. Thank you.

Okay, perfect. We have one remote speaker, Jennifer Griffin. One moment while I share my screen. Okay. Welcome, Jennifer.

Hi, Jennifer. Hi, I have a really bad cold and I had an upholsterer person here. So I, um, I appreciate you all having this. Um, and it, it's been extremely helpful to see the list of the bells and hello to the Gonzalez's again. Um, I don't, I apologize, but I don't know if you all discussed, uh, I think it's AB 1751. It might be it's Quirk Silva and, um, I think it's called the missing middle townhouse. I'm sorry. It's a Sharon Quirk Silva. It's AB 1751. And I apologize if it was on your list or not, but this one's called the missing middle town home ownership act. And it's, I've really been concerned about this one since it has come out of the gate. And I really, I, the part about making the townhouses would be the, What is that where you just have them approved with ministerial? And no CEQA. And I'm really, really concerned that we're going down a road that we don't want to. We have fire danger. We just can't ignore CEQA. There's too much potential danger and damage. And I think that this is sort of, I believe that Buffy Wicks is the other I think it was the co-sponsor and Ms. Quirk-Silva is from Southern California. I just think that this bill, if it was not on one that you all were discussing, it really should be on the list because I think this one is a no-go. We don't want to go down the road where we're completely throwing our hands up and saying, oh, the state says we don't have to worry about CEQA. Well, we know that that's a no-brainer. You have to worry about CEQA. You have to worry about fire. You have to worry about environmental damage. You have to worry about earthquakes. So I really hope... if you have not discussed it, that it's put on the list and that it is something that you all are aware of. I'm a bit concerned because Mr. Ahrens evidently has a bill that's about splitting a lot. I don't know if you discussed that or not. I don't know if it's good or bad, but I am really concerned about any more ways to try to split lots. They're getting small enough as it is. And I appreciate your help with this. I'm also concerned about any bills that are trying to take away CEQA. I'm also, I like Mr. or Senator, Mr. I can't remember his name. If he has the bill that's trying to help give cities more time with their housing element. I really, I really think that it's important. So thank you so much. I appreciate it.

Thanks, Jennifer. We did talk about 1751. So it is on the list. And I think you're talking about Josh Becker's bill. So I think I'll look that up. And then Patrick Aaron's bill is AB 2005, which is the lot splitting bill. Any comments there? That's true.

So 1751, we already took a position to oppose, right?

We took a position, yep, to oppose.

For the last plate one, I don't know what is that.

AB 2005, I believe. I'm looking it up right here.

Maybe.

Housing developments, urban lot split, owner occupancy. This bill changes urban lot split rules by giving applicants two owner occupancy options, adding notice and recording requirements for one option, and limiting local agencies from imposing extra conditions on urban lot split prospects. And you would let an applicant either promise to live in one unit for at least three years or agree to sell both parcels within a three-year occupancy requirement for the buyer, or also allowing certain LLCs or trusts to qualify, creating civil penalties for some violations. the short of it.

Change, does that mean the city will then be required to allow lot split on any lot?

I don't know, look at the restrictions here. So let's pull up the bill.

Yeah, it's basically what they're seeking to do is I'll call it provide flexibility or dilute the owner occupancy requirements of SB9. And they're using estate planning. So if the property is owned through a family trust or something along those lines, you can have some additional flexibility to meet the homeownership residency requirements. So if you're one of the trustees to a living trust or LLC, you would qualify as a owner-occupant?

Oh, because many people do put their home on their living trust.

They're part of the trust, yes, that's correct.

Yeah, I see.

But I'm not sure. The question is, do you want more lot splits? And I think that's the broader question on that.

But I think... If the lots are large enough, we already have rules to allow lots split. I do support lots split when you have large enough lots. But if you have lots that are already very small, So my question is, does that force us to apply it everywhere, or does the City still can set, here is our standard for minimum lot size to allow lot split?

And Jason, I believe there are objective standards that are built to that bill. I think there are objective standards that are built to the bill, but can we verify that?

Yes, there are. And a lot of those standards really are in current law under SB 9, the minimum setbacks and number of units and so forth for urban splits.

So it's trying to really clarify SB 9, right?

Exactly. And it's particularly the owner occupancy requirements of SB 9 to allow owner occupancy to be qualified LLC participants

um trustees and so forth yeah if that's that i i think it i think it's okay yeah um Anything else you would like, maybe a summary of a specific area?

I think right now, I mean, the current things, there's anything, as the Vice Chair was saying, anything that's related to a wildfire risk and around wildfires and fire safety evacuation is probably top of mind.

So do you want a summary, maybe, on those bills?

To get a summary of those bills. I think that's, I always get a broad list here. That's probably item number one. Item number two is anything that's related to housing elements, the housing bills. And I think there's element number three, which is related to insurance and access to insurance, because those two are coming together. And the fourth one is anything that's related to any kind of environmental areas. I think there's interest around things around PFAS, things around waste and mitigation, any kind of rules like that.

Anything else? And e-bikes.

And e-bikes. And e-bikes. I do have e-bikes as well. Absolutely.

So one comment regarding the bill list for in attachment B. I see you are separating the league ones and the in B ones. And it's hard to know when you read the document position support is from which organization. So it will be nice if position support is league position support or NBA position support. That way it's easier to understand it's not a city position support.

No, I was looking at that and realized that he does have it.

It's a group, but you need to really scroll up and down to find out which group.

It starts with the league here. And then, yeah, the first I was like, why are we supporting? And I realized what it was. So, yes.

I think the public will have similar confusion. So it would be nice if attachment B, when it says position, specify league position.

Got it.

we may want to do it i see how it says league but underneath we'll put our city's support or watch what i mean is for each bill yes because the league is all the way up there it's hard when you look at the bill to know what is the position whose position is it understood yeah

I mean, for all intents and purposes, put a page break on page 20 and just say, these are the bills from the league and these are the bills from MB.

I was going to say, we could even break them out into two separate reports.

That would save you some time. You'd probably see it.

It's okay to always run the reports. Just position needs to be clear which position. It's not the city position. Yeah.

Yeah.

I'm trying to figure out. There's one about open spaces that came about with grass and watering. I don't know if we're tracking that one. I'm trying to think about which one it is. I'm going to take a look and hunt for it. But it's about a non-functional turf.

Oh, I thought that one already passed.

Did it pass?

I thought last year there was a bill, inactive or non-functional turf owned by the city or HOA have to be converted to drought-tolerant plants. I thought that one already passed.

I'm not sure where we are. Right?

There was legislation on drought resistance and turf. There's been several bills in that space. I'm not certain which one.

AB 1572, HOAs with over 5,000 square feet of turf, effective January 1st, 2029. And it's already passed, but there may be some types of exceptions. And we're hoping to figure out if there's any exceptions for fire hazards. So sometimes it seems like it's non-functional turf, but it's providing a barrier as part of a hardening exercise. There should be some kind of, we don't know who to talk to advocate for that level of an exception to that. So for example, if that's providing a fire buffer, it's really not non-functional turf. It actually serves a safety, health and safety function.

Dr. Roberts, did you say AB 1572? I believe so, it's AB 1572.

Yeah, from 2023. It's starting to hit the HOAs in our area, especially the ones on the hillside.

SB 676. I don't know what that is.

Which one? SB?

This is amending local government authority on residential housing.

Yeah, so 1532, I think it includes the city government. So any city-owned parks or any area. I was looking at the Memorial Park, the lawn that's next to the tennis court, right? It's a really nice area. It's not really active, but if we have to convert all that to drought-tolerant, it will...

Compliance timeline for state on the 80-1572 is January 2027. Okay. That would be a lot of cost. That's one thing.

Another thing is, yeah, the city has a lot of area we really need to take care of.

Yeah, and 676 basically says, first we're like, hey, I'm going to put synthetic turf. This one says, hey, you can kind of talk about what type of synthetic turf goes on for safety reasons. That's there. That's what's driving that. That's that's. Any other comments.

So for this one that was passed in 2023 there has been no effort to try revise or modify the little you're not aware of.

Not that I'm aware of but I can do some additional digging and it's something particularly there's a fire safety element to it. We should be communicating with your legislators and or looking at many of the statute right. You know emergency management considerations.

So maybe that's something you can bring up at that meeting.

Yeah, look at that for item agenda for more talk about gender. When we talk about gender for which is the upcoming legislative visit. Let's add that to that. Reminder to come back to that conversation point. Anything else that you're okay. All right, thank you for providing that list. No objections, let's move into item number three. This is considered adoption of a position, Assembly Bill 1821, Pacheco, CPRA, agency response times. Adopt a support position, AB 1821, authorize the mayor to send letters to the state legislature. Let's take a look at the summaries report. Jason, would you like to do a summary of your summary report?

I'm pulling it up, but this bill has support, as noted in the memo attached, has support from local agencies throughout the state. CalCities is the sponsor of the bill. It's seeking to provide additional, I guess, safeguards and flexibility for local agencies as it pertains to Public Records Act request and response times. So it's seeking to extend from 10 days to 14 days under specified circumstances.

Yeah, from my understanding, it was about gaming the system to actually, if you did it on a holiday versus on a business day, just to make sure that was equivalent to business days versus the holiday calendar.

I think it makes sense to count to business days. I don't, Yeah.

Do we need to vote? Do we need to vote on that matter for making the recommendation to support that?

Yes.

We want to make sure. Okay.

So I move to support the bill. Oh, sorry. Before we go into a motion, we go to public comment.

I just want to ask the question that's pointing, right? And then public comment. Let's see if there's any public comment out there. Thank you.

We have no speakers here.

Okay. Sounds good. No public comment. Would you like to entertain your motion?

Yeah. Motion to approve.

Okay. I second. Any comment? No comment. Okay. Roll call vote, please.

Please, Chair Chau. Aye. Chair Wang.

Aye.

Motion carries unanimously.

Okay. With that, let's move to item number four, discuss upcoming legislative visit to Sacramento on June 9th and see what the legislative day looks like. Turn it back to you, Jason and Paul.

Well, thank you. We're Looking forward to June 9th. Obviously this part doesn't involve us, but I did see it kind of a kickoff time of 7.30 a.m. per Astrid's coordination. meeting at City Hall heading to Sacramento. Our first meeting thus far is scheduled for 1115, and I'll send a follow-up with this itinerary. So Assemblymember Lori Wilson at 1115, it'll be a 15 to 20 minutes, but she's the Chair of Assembly Transportation Committee, has legislation in the e-bike space and transit-oriented development. From there, we have an 1145 with Assemblymember Patrick Ahrens, 12 o'clock to 1 o'clock lunch, and then we've scheduled 1.15 for Chris Hill, who is kind of the, I've known him for so long as official title. He may be deputy director of finance, but he does all things local government within the department of finance. He's been around going back to the early era shifts of the nineties. And the thought was to discuss, you know, the sheriff's contracts, the city's uniqueness as a known low property tax city, you know, sales tax revenues and so forth. And then two o'clock with Senator Josh Becker. And then planning for heading back or wrapping up the day around the 3 p.m. hour. The only caveat we have, and whether that's just before the 1115 meeting or sometime in the middle, getting a meeting with HCD, because I know we wanted to have a sit down and discuss issues and that meetings in the works. So should be a full day. from I'd call it 10.30, 11 a.m. till 3 p.m. is kind of the window we're looking for or looking to fill up.

Makes sense. Are there any other adjacent senators or assembly persons that we should be talking to as well while we're here? Not in our district, but adjacent enough that support our positions or any in Orange County that we should, Orange County, SoCal, San Diego area that we should seek support from as well.

The key one really that we've identified, although we're open to suggestions, was Louie Wilson, given she's in Solano County and she's chair of the Transportation Committee. On the Senate side, we could look at some of the other members, but Senator Becker really is probably the part and parcel for city's priorities as your senator as well. But someone like Dave Cortese could also be helpful.

Okay, sounds good. We don't necessarily need to go up there to meet them. I mean, since they're in our area, we can definitely meet them here while we're at it as well. So I just want to make sure.

And with Becker and Aaron's, we do have them scheduled for meetings. Kind of the approach being to see you in Sacramento. No, it means it's priority enough. You make the trip, but also to not have them here from Lori Wilson that Cupertino was in meeting with them and we didn't reach out to your own legislators. So there's kind of a natural deference there as well. Makes sense.

Makes sense. So any other comments? Anything from you, Vice Chair?

No. Okay.

Staff, any things we should add?

No, I think we have a good agenda for the Sacramento days. And thank you, Jason and Paul, for your help. And I know Astrid's out, but

I would like to add the wildfire risk piece to the agenda, if possible. And I think that's just the piece. And I think on the wildfire risk, there are multiple options. So it's the turf, it's the insurance access, it's the evacuation routes, and insurance is the big one. Trying to figure out who's going to be able to solve the insurance crisis. was meeting with a uh the developer uh this morning and it was actually interesting uh because he mentioned to me that he couldn't get he was having a hard time getting fire insurance for his own property uh in another adjacent city so and i thought that was quite interesting it's been an ongoing challenge throughout the state with very little consistency of any as to who loses their policies who gets

put on the fair plan and so forth. I mean, it's a nightmare to say the least.

Okay.

Okay, a question. So regarding our low property tax state, it's a result of this bill, right? So what is the legislative, is there a possible legislative fix so we get fair share of our old property tax?

There's a possibility for a legislative fix, and your city has kind of an interesting or perhaps tortured history on the known low space. Really, you were a low property tax city as a result of Prop 13 and not having levied a large property tax. So after the voters passed Prop 13 in 1978, and this is... the legislature bailed out those that caused the problem. So if you had a high property tax rate, you got a larger share of ABA, the bailout. And those that had a low or no property tax rate were locked in. And consequently, Cupertino was locked in at a very low rate. You may have even been a no property tax city at that time. And then in the late 90s, when they did the no and low property tax legislation to allow all no and lows to go to 7 cents, Then Senator John Vasconcellos capped Santa Clara County's cities at 4% and said he didn't want his rich cities to get 7 cents. Misinformed at best. You know, God bless John, but you can have wealthy residents. It doesn't mean the city's wealthy. And... And so later, fast forward, probably this is really to your question, Madam Vice Mayor, is the legislature then came back with legislation by then Assemblymember Rebecca Cohen. And it was a negotiated agreement between the county and the four known lows in Santa Clara County. to allow you guys to grow from 4% to 7%, which is where you're at now. And again, it was negotiated. It's post Prop 1A. It happened around, I want to say, 05, 06. But it takes a two-thirds vote of the legislature. So the Rebecca Cohn bill received two-thirds vote and allows you to go to 7%, I think, based on conversations the mayors had, I would think, you know, with the sheriff's contract and the limited amount of property tax the city receives, it's all kind of part and parcel to the discussion and your ability to provide housing and public safety services. You know, you're getting seven cents on the dollar. even though the homes are perhaps higher in, 93 cents is going somewhere else, schools, local taxing entities, the county, et cetera.

Yeah, the thing is the cost of living is high. That also means the cost of running a city government is very high too, because we need to pay salaries for our employees and everything that you need to do park maintenance, everything is much cost is higher. So did you write a memo about this history?

On the known lows? There is a, there's a good memo on it. I did not write it, but Rethinking AB8 is the title legislative analyst did quite some time ago.

Rethinking AB8?

I will dig it up and add it to our follow-up.

I wonder if we can get a summary of the history of why we are the low poverty tax cities. And then I think at least we need to have an article that we are able to publish so that the Board of Supervisors, this is well known, we are getting much lower poverty tax than all the other cities.

Yeah, let me put it on screen. I think I tracked down one. Here we go. This might help. I don't know where this came from. I'm trying to track this down. Who's Carol Atwood? I think she was Cupertina.

Yeah. So this was something I was put out in 2018.

So this might be something useful.

That's the, you know what, that's very good memo right there. It summarizes what I was pointing to, but I think I saw AB 117 towards the bottom. It's not on screen now.

Where did you find that?

Yeah, there's the Santa Clara County legislation. AB 117 was Assemblymember Cohn's, Rebecca Cohn's bill to bring you up to 7%.

That's the ERAF, yep.

So... Well, and they're mentioning ERAF because of the ERAF shifts in the late 90s. They shifted property tax back to schools during the budget deficit. And the second year of the ERAF shifts, the no and lows were exempted. The no property taxes were exempted. And then the low property tax cities only received a portion of what they were receiving, which was a fraction. because of the inequities of AB8 and post-prop 13.

So I placed this into the Zoom so that we can put it into the record. So it's going to pull back. So how's that?

I do think, you know, as part of the discussion... at the local level with contracting and all the other factors, not the least of which is disillusion of redevelopment. There's new property taxes flowing through the waterfall, as we call it, what used to be property tax increment from redevelopment agencies. santa clara county had the largest agency in the state in san jose and um that's new money that the county is getting and you're getting seven percent share when it flows back to the other taxing entities so if i were pretending to be a local elected for five minutes i would put that pot of funding on the table to say why are we looking at x percent of contracting costs increase when you're getting all this new property tax that used to go to redevelopment agencies.

We're not getting that cut is what you're saying.

No, you're getting your seven cents and the rest is going to the others.

So what is this new source of property tax?

Well, it's quasi new. So what happened when the legislature and ultimately the Supreme Court eliminated redevelopment agencies in 2011. Former redevelopment agencies had what we called enforceable obligations. So if you had bonded indebtedness, you had commitments, you were able to pay those bonds off. And then once those bonds got paid off, get paid off, the tax increment that's going towards debt service, which is hundreds of billions of dollars throughout the state, then flows through what we call the waterfall. The legislature calls the waterfall. That's the property taxes, the new money, if you will. So let's just say you have $100 million in bonded indebtedness. It gets paid off in 2030. All that debt service that was paying that $100 million bond is now going to the taxing entities. The point being is Cupertino, unlike all the other taxing entities, unlike the majority of them, you're getting 7% of that new waterfall, the increment that used to go to debt service. The county's getting the lion's shares, the school's getting 50% plus or minus. So it's money that used to go to redevelopment agencies that's now flowing to the other taxing entities, and it's flowing on a 1978, 1979 AB8 formula that is antiquated and outdated at best. Other than that, I don't have an opinion on it. Okay.

A question. So for comparing, let's say Cupertino gets 7% of property tax, Milpitas gets 15% of their property tax, right? And does that mean the county gets 8% more of our property tax, which... So where did that 8% go?

Well, it's all based on the historic shares going back to 1979 ABA. So ABA was the bailout. So Cupertino, I would argue, having been responsible and not having levied large property tax rates on your residents at the time, you're a more fiscally responsible, we could say conservative community. And there were 119 throughout the state that had no or very low property tax. So when the legislature after Prop 13 bailed out, the local agencies because it was either that or they were gonna have service cuts throughout California because all the property taxes were being reined in. The legislature bailed out local governments and because you didn't have a high property tax, you didn't get a high rate. And then they locked everyone in with ABA. So if you... or more fiscally conservative, responsible city, let's just say you levied a 3% tax, that's what you got, 3% share. If you had a 40% share like Oakland, you got locked in at 40%.

Okay. No, my question is not why it happens. My question is today. Let's say property tax for Milpitas is, I don't know, Let's say 10 million, 100 million. Let's say Milpitas gets 100 million of property tax and they got 15 million of that. And we get only 7 million of that 100 million of property tax from our properties, right? So where did that 8 million go? Who gets that extra more? Who got more?

Well, everyone's getting their ABH share. So it's not 8 million versus Milpitas versus Cupertino. It's all part of the tax rate area and the county auditor controller distributes the property tax based on your proportional share. You can have a fire district in one community and not the other. That fire district gets a portion of the property tax within that tax rate area. No.

My question is, for example, if we got the legislative fix to increase our share from 7% to 15%, who would get less? Because those are the people who are getting more today.

Who are they?

I don't know. Is it the state? Is it the county? Is it the fire department?

Well, it won't be the state. and schools because Prop 98 constitutionally protects the schools. So during AB 117, I think the best way, Vice Mayor, to answer the question is when we did the Rebecca Cohn legislation, the money shifted from the county to the no and low property tax cities. But you could form, as an example, an enhanced infrastructure financing district and negotiate a revenue share And that allows you to negotiate with any of the taxing entities as long as they choose to participate at whatever levels are negotiated. So you can do that under current law without legislation. But in the Rebecca Cohn AB 117 instance, it was an agreement where the known low cities assumed additional services, I think with unincorporated kind of donut hole territories in exchange for a larger share of the property taxes, and it was negotiated with the county.

So the county is getting more of our share, basically, because any change means that we need to take that share from the county. But without any change, that means the county is getting more of... And that's the point we need to make, right? They are getting more of our share because we were too fiscally responsible and now they then they, but they are not providing us more service based on our share, so.

So we were locked in at 7% and other cities are getting double the amount. I wouldn't say it's 8%. I'd say it's double the amount because that's actually what it is.

Well, it depends. Some cities get 10%.

Other cities like Mopetus get double the amount, which is like 15, 16%. And regardless of- So Auckland is 40%?

Right around 40%.

City of Sacramento is around 30%. Yeah. Alameda County, yes. For Alameda County, they had 40%. Yes. Oh, wow. But that's because this is only for the RDA portion, right? This isn't all cost recovery, is it? No, that's all of the property tax. All the property tax?

Property tax revenue through the county. Okay. Wow. Their ABH share is around 40%. That's some good governing.

That's really inequitable between the cities. That is something I think we, even the legislators, they probably don't know. And we need to tell them this is, we're getting the short end of the stick because we are too fiscally responsible.

And you're locked into a formula that, as a matter of fact, when Governor Jerry Brown proposed eliminating redevelopment, the legislative analysts put out a report that said simply eliminating redevelopment agencies and returning the property tax revenue based on a system that was devised in the 1970s does not reflect the needs of modern communities. Unfortunately, that's exactly what they did. And Again, my argument would be, and I think it's one worth sharing with your legislators, but also county executives, and that is we need a larger share of the property tax. The 7% is disproportionate. It's inequitable. And then the county's immediate response is going to be, well, where are we supposed to get the money from? We have our own budget strains, right? And the answer to that, in my mind, is look at what the – redevelopment waterfall is generating every year new money as debt service throughout the county and the state gets paid off, that waterfall is turning into a tsunami. And it's only going to grow in the near term, next 15 years as those bonds get paid off. So there's new money the county is getting each year from former redevelopment property tax increment, and you're getting 7% of it, Because otherwise, unless you look at where the money is going to come from, they're going to say, we don't have any money.

Who can change that percentage for this new money from redevelopment agencies? Is that appropriations? Is that also we need a legislative fix?

The legislature could change it statutorily. Or... the city can enter into if the county was a willing participant and the other taxing entities for that matter, the city can form an enhanced infrastructure financing district, which has been done throughout the state. And it allows the county to ship the larger share of the property taxes based on the priorities of the EIFD, the infrastructure financing district. It's basically, it's a redevelopment 2.0, but it allows you to, to negotiate a larger share of the property tax at the local level.

You can do that?

So let me take a step back. So basically what you're saying is the RPTTF, the Redevelopment Property Tax Trust Fund, was used as a mechanism to pay back the $5 billion to all these loans and guarantees that RDAs were using. And now that it's almost paid off, these people are just getting – the counties and entities are just getting free cash flow coming into them for no reason as just a cut from the tax revenue, and we're missing out on it. That's exactly right. Okay. I want to know.

Well, we are not missing out.

We are just – We're getting a very, very small share of it.

We are only 7% because we are still getting the short end of the new money. We get the short end of the current party.

So how many entities like us would be a tax donor –

we a donor or oh good sorry i was just gonna um i'm just gonna if i can just add to this conversation so i think there's some of this uh discussion that the mayor may have had with uh patrick aaron's uh because of the discussion with the sheriff's contract right so that it it sounds like there's the vest valley cities that are the contract cities

seem to be at the lowest percentage. There's no low.

The ones without our own police department are...

I don't know if there's a direct connection to that, but it does...

I don't know, but it looks like the ones who don't have police department happen to be the ones with 7% of property tax. The... Don't know if there is direct connection, but maybe that's why we had low property tax, because we didn't have our own police.

I don't know. I don't know the history, but the questions, if we're talking about in the context of a Sacramento day, and we do have a meeting with assembly member of errands, I think we can bring this up again on what the process might be. He's aware of this issue.

Yeah, it'd be great to understand on the legislative side who that is. And then on the executive side, what the agency is that's responsible for that. I believe that's assessors, right?

Well, Department of Finance. And that's part of the reason for Chris Hill being one of our meetings.

Yes. Okay, got it. So we can bring that.

Also, I think... Whether it is likely to get passed or not, the fact that we propose it, at least put it on the record that we are getting the short end, and then inform all the legislators that this is an issue, they are willing to fix it, fine, but at least they should know. So... Even if it's not likely to get to third votes, why don't we still try to propose a legislative fix? Yeah, that's... They can deny it, but then they have to first understand and then say, no, we...

I think it would be interesting to see how many cities are in the same result, like us, that are no low and ended up with getting an unfair percentage of the distribution, especially from RTTPF. I think that's actually interesting.

Is there any LAO report that has this data on like Oakland got 40% or this other city get this number of percent and this other city gets very low percent? Is there a LAO report on that kind of?

A breakdown by cities? We have a listing of the known lows, which back in the late 90s, It was about 119 cities throughout the state.

But I would like to know what the other cities are getting, what's the average, what the other cities with maybe likely our population is getting.

I will look and see if there's a breakdown on California cities and the ABH shares throughout California. That's a tough place. It's 482 of them.

That's a tough place because 119 cities is really about 24% of the total. It doesn't give you enough of a majority to actually push for something, but it's a good place to start.

Well, what I was going to say is back during the no and low original legislation, which was a Bill Lockyer bill, it was about 119 cities, no and lows. But if you fast forward to the 1990s ERAF shifts, after they shifted property taxes from local governments to schools, that number probably ballooned to 250, 300. So for example, city of Fontana is not a no and low property tax city, but after ERAF, they now get about 3.4, 3.5% share of the property tax. They shifted because they lost it. They ended up becoming a no and low as a result of the ERAS shifts. So that number has only grown over time.

Wow.

That's good news and bad news. Yes. Good news from a lobbying perspective. Bad news for the cities and the residents that live there.

So another question is, are property tax shares paid to the county fire department? I heard that... I think they are getting like 14% of property tax. double of the city's share. And other cities like Kimball, they are on a contract. So they are able to negotiate what service they even provide. For us, we hand double of our property tax to them. We have no say how they spend them. They can spend anywhere that's outside of Cupertino. What is any possibility of fixing that? So we get... our money's worth or at least get some of the 14% back to move to a contract model.

I think you could explore maybe a nuclear option dissolving the fire district through LAFCO process and that probably is not something you'd want to say out loud. It could be very difficult or again it becomes a negotiation much like AB 117 was with the county, the fire district and others and then But legislatively, the answer is two-thirds of the legislature, they can shift all of the property taxes they want. They can't shift the sales tax.

So this 14% was determined by the legislature? Or by the county? It was...

It was by the county and it was more likely part of ABA. More likely the district existed and received a share of the property taxes post Prop 13. There's independent fire districts and then the city dependent fire districts where you manage them. It sounds like this is an independent special district fire district.

But I heard Los Altos, I think it's Los Altos or Los Altos Hills, they were part of the county fire and then they got out. Do you have any knowledge of?

Not that one specific, but that has happened and it's doable. It sounds like Los Altos Hills or Los Altos was contracting with the county for fire services and they,

No, they were paying part of their property tax. They got out, so they become contract.

Yep.

That's what I was going to say. It's through the LAFCO processing.

So they did, it's through the LAFCO. It's confirmed, I've heard that too, but I'll need to look into that one. This is a LAFCO competition.

Anything else we should bring up while we're on this visit?

Okay. So at least I think if we know that process, at least we can try to get it, whether it's passed through or not, at least that raised the visibility of the issue to the county that they are getting more than our share. They are getting double of our property tax, and now they should not ask us for more, something like that.

Well, Madam Vice Mayor, I think you're absolutely right. As part of these conversations with Becker and Ahrens, your senator and assembly member, on the natural, they may say, well, the county has fiscal pressures, as we discussed before, and they may – I think there's an ability to ask them to look at – the entire picture, not the least of which is the former redevelopment property tax and supporting our position because the county has new money coming in that can offset your additional sheriff's contracts, as an example. So if we're able to educate them on the larger picture of all the property tax revenue that Cupertino's a net donor to the county and other districts, it helps our argument.

Yeah, I think the main argument is they are already getting 8% more of our property tax for their general fund. And now when we contract with them, they do not charge us at cost. They are trying to do full cost recovery for all the share of contract. But in fact, we are a donor city. We are already paying. They are already getting extra from us. And that should be taken into account.

Yeah, there's a separate Los Altos Hills County Fire District, which is separate from the Los Altos one, which last week just annexed their fire district and back to the county's fire district, which is an interesting thing to watch too.

That's the one I'm saying I've heard and I need to look into.

Yeah, so Los Altos Hills has a separate fire district. Los Altos has a fire district where they just annexed into the county fire district, which is interesting. They're just paying in. So they went the other way. They basically did.

Oh, mm-hmm.

Both things have happened, just so you know. Okay. So, yeah.

Okay.

Okay. Anything else to add for the legislative day?

Go to public comment?

Yep. Let's go to public comment.

Okay. We have one remote speaker. Will I bring up the timer?

Yeah, I should take a look at this. Okay.

Welcome, Jennifer.

Yes. Hi. I thought you guys had forgotten about me, but that's okay. No, sorry. You don't want my cold. I got it from my husband. Yes, thank you. I'm just going to go track back to your legislative day. I think it's really good that you're meeting with our assembly member and our senator. Mr. Ahrens is up for reelection. And today, you know, this is voting era. And I think Mr. Becker is a senior official. He's been there a while. He's not up for reelection. But I think it's important that both of them remember Cupertino because both of them are new to Cupertino. We had reapportionment. We had Cortese until just a year ago. So I'm really, the more you can see what they're doing up there in Sacramento, I'm a bit concerned because Mr. Ahrens has done this split a lot bill, which I'm really concerned about, but I want them to want to come to Cupertino and talk to us about what their vision is. I'm very happy with Mr. Becker because he seems to kind of be Understanding what Cupertino is, Mr. Ahrens, he's a nice gentleman, but I'm really not sure. And I want to get the good vibes that these two gentlemen are going to be fighting for Cupertino at the Sacramento level. I also think it's important that Cupertino sees HCD. We are not happy with HCD. I'm extremely concerned about their power. rollout. We're going to be having a new governor in six to seven months, and I really hope that this unholy alliance between Senator Weiner and the governor, NHCD, just dies. I am ready for new blood in this. I'm very, very happy that my mother's Assembly member in Santa Cruz actually had a bill that is trying to help the cities with their housing element to give them more time. But I want our administrators, we elected them and sent them up there. It's not a party. We want them to be Looking out for everyone in Cupertino and I, we have a lot of problems in Cupertino. Retail is going out of town. We have nine townhouse projects that are eating up land. I don't know if they're all going to go. Um, but I, and also now I remember our redevelopment agency. I remember when Jerry Brown asked it, we've lost control of Valco over redevelopment agency. I think we need to bring the redevelopment agencies back. Cupertino had one, but I think it's, it's worth looking at. So thank you very much. Thank you, Jeff.

We have no remaining speakers chair.

No more speakers. Okay. All right. Any other comments?

Anything on your end?

Okay. We'll go to the next item on the agenda, which is no meeting. I believe no staff reports, if that's correct. No staff and committee reports. Anything to add to the future agenda? Jason and Paul.

I think that e-bike bill, the one that we took position on the Cities Association,

With the speed limits and speedometer?

I think the labeling of the e-bikes.

The types of e-bikes. License for e-bikes.

Okay. SB1167. And likely the speed limit AB2346. Okay.

So future agenda, and you'd like to place that on a list for a recommendation for the mayor to sign?

Yeah.

Okay. Let's add that to the future agenda item for SB 116, support for SB 1167, which is Senator Blake Spears' bill.

Okay.

Will do. And I have a series of reports we'll be following up with as well.

Okay. Okay. Thank you so much.

I look forward to seeing you in Sacramento with Mayor Moore. Look forward to it as well. Looking forward to it. Thank you. All right. See you guys.

Thanks.

Have a great day. Thank you. With that, call this meeting to adjournment. Thank you.