BAY AREA’S ECONOMIC HOMOGENEITY SUGGESTS NEED FOR REGIONAL STRATEGY

While economic development planning done at local levels within the Bay Area is important, it may not be as productive or effective in maximizing growth and job creation as approaching the region as a single economic unit, according to a first-of-its-kind study released this week by the Bay Area Council Economic Institute, on which Cynthia Murray, NBLC’s President/CEO, serves on the Executive Committee.

Chief Economist Jon Haveman presented the study at a meeting of the regional Joint Policy Committee. The study, which was funded through a public private partnership that includes North Bay Leadership Council, finds that the Bay Area is highly interconnected economically, with a highly mobile workforce whose decisions about where to live and work may not be at all related to local economic development strategies designed to create jobs or provide housing in a particular community. Indeed, those individual strategies may be at odds with each other. According to the report, “a cooperative and coordinated approach to job creation would take into consideration the benefits to the region as a whole of job creation in a specific location, likely increasing the returns from economic development efforts throughout the entire region.”

The study also addressed the notion that Bay Area job creation has much of anything to do with companies coming here or leaving. What the study finds is that start-up companies are the biggest driver of job growth, accounting for 55 percent of job creation. Expansion by existing companies accounts for 42.6 percent of job creation, while just 2.3 percent of new jobs come from businesses moving into the area. Similarly, companies leaving the Bay Area account for just 3.7 percent of job losses, while the death of existing businesses accounts for 66 percent of job losses. This could be a lesson for those outside the region or California who think there’s much to gain from trying to recruit or lure businesses away.

The study identified high housing costs, a cacophony of state, local and regional business regulations and a shortage of qualified workers as among the biggest obstacles to job growth.

And contrary to some perceptions of growth in the Bay Area, the study finds that the rate of new home construction has slowed to a relative trickle over the past 30 years, a trend that may be the biggest culprit for the region’s high housing costs.

It’s a fascinating examination of the region’s economic dynamics, and concludes with several recommendations that a public private partnership between the business community and regional planning agencies could provide a strong platform for the development of a regional economic strategy. To read the study, visit A Regional Economic Assessment of the San Francisco Bay Area.

Business Coalition is Being Heard on SCS at MTC, ABAG

An Article by Bob Glover, Executive Director, BIA Bay Area
The Sustainable Communities Strategy being crafted by regional regulators to align Bay Area land-use and transportation plans with the region’s state-mandated climate protection targets was in need of a reality check.But two important developments in recent weeks signal the concerns of the region’s broad business community are being heard.On July 19, the Metropolitan Transportation Commission and Association of Bay Area Governments, the agencies responsible for the Sustainable Communities Strategy, or SCS, voted to adopt a Business Coalition-backed alternative to be studied along with the proposed SCS during California Environmental Quality Act (CEQA) review of the proposal.

Then, on August 17, MTC announced that it would hire a private sector real estate consultant to independently assess the economic feasibility of the proposed SCS—specifically, its principle policy prescription that 80 percent of all future residential construction should be confined to Priority Development Areas, or PDAs. The PDAs, numbering about 200 across the region, are infill and other urbanized sites that have been deemed by local governments as potentially suitable for transit-oriented development. Combined, they account for approximately four percent of the region’s buildable land.

An independent assessment of the practicality and feasibility of directing 80 percent of all future investment into these areas has been a priority of the Business Coalition and was first requested back in May.

To read the rest of the story …

Fighting for CEQA Reform

CEQA Reform has been a key initiative of North Bay Leadership Council. This year, in an effort to achieve meaningful CEQA reform, NBLC has joined a Coalition of like-minded business groups from across the state that are working to do just that. Business surveys have put CEQA reform in the top issues needed to improve the business climate in California. The legislative session closes at the end of August with legislators moving legislation in a mad rush to beat the deadline.  During this mad rush, we remain hopeful about the legislature achieving genuine CEQA reform, focused on fixing the legal abuses of CEQA, including transparency and standing issues, as well as better integrating CEQA with existing environmental and planning laws.   
 
This Coalition has been pushing hard on achieving a solution, and the letter below was sent to every member of the California Assembly and Senate. As this situation progresses, we will keep you abreast of important news around this effort and ask for your help.
 

August 20, 2012

To: Governor Jerry Brown
Senate President Darrell Steinberg
Assembly Speaker John Perez
Senate Republican Leader Bob Huff
Assembly Republican Leader Connie Conway

Re: CEQA Modernization

We have been encouraged by recent comments from the Governor and Legislative leaders expressing your support for some form of CEQA reform. As a coalition of labor, schools, hospitals, clean technology companies, local government and business, we support efforts to modernize CEQA and commend you for taking on this vitally important issue.

We believe it is possible to accomplish responsible, thoughtful CEQA reforms that preserve the original intent of the law – environmental protection – while stamping out certain abuses of the law brought for non-environmental reasons.

We reject the notion promoted by some that any and all CEQA modernization attempts are automatically an attack on the environment. This all-or-nothing posturing is what is preventing California from moving forward with environmental protection policies that foster – instead of inhibit – responsible job creation, economic growth and community renewal that are critical to achieving the dual goals of responsible growth and economic prosperity.

As you evaluate CEQA reforms, we urge you to consider the following principles:

1. Modernize CEQA to Integrate Updated Environmental and Planning Laws

  • When the California Environmental Quality Act (CEQA) was enacted 40 years ago, the wide array of local, state and federal environmental and land use regulations that are now on the books didn’t exist. CEQA was essentially it.
  • In the 40 years since, Congress and the Legislature have adopted more than 120 laws to protect environmental quality in many of the same topical areas required to be independently mitigated under CEQA, including laws like the Clean Air Act, Clean Water Act, Endangered Species Act, GHG emissions reduction standards, SB 375 and more.
  • Despite these stringent environmental laws and local planning requirements, public and private projects throughout the state are commonly challenged under CEQA even when a project meets all other environmental standards of existing laws.
  • Many lawsuits are brought or threatened for non-environmental reasons and often times these lawsuits seek to halt environmentally desirable projects like clean power, infill and transit. CEQA is even working at odds with – instead of in concert with – important environmental laws like SB 375 and AB 32.
  • CEQA should continue to serve as the state environmental law for environmental impacts not regulated by standards set forth in other environmental and planning laws adopted since 1970.
  • However, where a federal, state or local environmental or land use law has been enacted to achieve environmental protection objectives (e.g., air and wetlands protections, etc.), CEQA review documents like EIRs should focus on fostering informed debate (including public notice and comment) by the public and decision makers about how applicable environmental standards reduce project impacts.
  • State agencies, local governments and other lead agencies should continue to retain full authority to reject projects, or to condition project approvals and impose additional mitigation measures, consistent with their full authority under law other than CEQA.

2. Eliminate CEQA Duplication

  • As originally enacted, CEQA did not require further analysis of projects that already complied with CEQA-certified plans such as General Plans. But a 1987 court decision dramatically changed CEQA’s application.
  • We should return CEQA to its original intent and not require duplicative CEQA review for projects that comply with approved plans for which an environmental impact report (EIR) has already been completed – particularly since existing laws also require both plans and projects to comply with our stringent environmental standards.
  • Local governments and other lead agencies should continue to retain full authority to reject projects or to condition project approvals and impose additional mitigation measures, consistent with their full authority under law other than CEQA.

3. Focus CEQA Litigation on Compliance with Environmental and Planning Laws

  • CEQA lawsuits should focus on compliance with CEQA’s procedural and substantive requirements, including adequate notice, adequate disclosure, adequate mitigation of environmental effects not regulated by other environmental or planning law, adequate consideration of alternatives to avoid unmitigated significant adverse impacts.
  • CEQA lawsuits should not be used to challenge adopted environmental standards, or to endlessly re-challenge approved plans by challenging projects that comply with plans.
  • Environmental and other public advocacy efforts to enact environmental protection laws should not be affected by any CEQA reform, and refocusing CEQA on how compliance with standards and plans will reduce impacts can also inform advocacy efforts to revisit standards or plans.
  • Finally, “real” environmental lawsuits – seeking to enforce true environmental objectives – can still be pursued against agencies that fail to make regulatory or permitting decisions in compliance with standards and plans. However, the current system of broad brush CEQA lawsuits that can be filed by any party for any purpose to challenge any or all environmental attributes of projects that comply with standards and plans are an outdated artifact of the “anything goes” environment of 1970, which now hinders both environmental improvement and economic recovery.

California is and can remain a leader in environmental stewardship, while at the same time promoting responsible investments in schools, clean technology, roads, mass transit, hospitals, infill development, housing, businesses and new jobs.

We look forward to working with you on this effort.

North Bay Leadership Council
California Alliance for Jobs
Silicon Valley Leadership Group
Bay Area Council
California’s Coalition for Adequate School Housing
California Hospital Association
Transportation California
Southern California Association of Governments
AGC California
Los Angeles County Economic Development Corporation
SPUR
CalChamber
Los Angeles County Business Federation
Los Angeles Area Chamber of Commerce
Valley Industry & Commerce Association
Orange County Business Council
San Gabriel Valley Economic Partnership
Central California Council
California Building Industry Association
San Francisco Chamber of Commerce
California Business Properties Association
Long Beach Area Chamber of Commerce
California Retailers Association
California Business Roundtable

NOMINATION DEADLINE LOOMING FOR LEADERS OF THE NORTH BAY!

Get Your Nomination in Today!

North Bay Leadership Council (NBLC) seeks nominations for its 2012 LEADERS OF THE NORTH BAY AWARDS. The deadline is fast approaching – June 29. If you know a leader who should be given recognition and brought to the community’s attention, please submit a nomination. 

This is the sixth year that NBLC has presented awards for leadership. To qualify you must live or work in Sonoma, Marin or Napa counties. The awards are given in five categories: Caught in the Act of Leadership, Individual excellence in leadership; We’re All in this Together, Community building: Paint the Community Green, Environmental stewardship: The ‘Light Bulb’ Went On, Innovative/entrepreneurial spirit: Empowering the Latino Community, Leadership within the Latino community. Honorees can be an individual, organization or partnership.

The awards will be presented at a luncheon ceremony on November 2, 2012, at the Embassy Suites Hotel, San Rafael. For more information, please contact NBLC at info@northbayleadership.org or (707) 283-0028.

Your Vote Matters … Remember to Vote June 5

We are blessed to live in a democracy. Please exercise your right to vote in the June Primary. This primary is groundbreaking in two ways. It is the first election since redistricting so voters have new boundaries and new candidates to consider. Second, it is the first election where the “Top Two” vote-getters will face a run-off in November. So it is possible that two Democrats can be in the run-off as opposed to the usual Democrat v. Republican run-off. Don’t miss this historic election designed to shake up how we vote and who gets elected.
NBLC’s Endorsements for June 5 Primary
North Bay Leadership Council (NBLC), a coalition of leading employers in Marin, Sonoma and Napa Counties, announces its endorsements for the June Primary.  As the only employer-led public policy organization that represents the North Bay, NBLC advocates for a regional perspective when addressing community concerns.  NBLC supports candidates that share the same values on improving education, increasing economic competitiveness, reforming public pensions and making government sustainable within today’s fiscal realities, improving transportations, and regulatory reform.

The following candidates have been endorsed by NBLC for their balanced approach on key issues, knowledge, problem-solving skills and ability to address North Bay challenges:

Congressional District #2:
Jared Huffman

Congressional District #5:
Mike Thompson

Marin County Board of Supervisors:
District #4: Steve Kinsey and District #2: Katie Rice

Sonoma County Supervisors:
District #5: Efren Carrillo, District #1: John Sawyer and District #3: Shirlee Zane

Napa County Supervisor:
District #2: Mark Luce

NBLC also endorses Proposition 28, which makes term limits more flexible by allowing legislators to serve a total of 12 years in any office or combination thereof.  It closes a current loophole that allows some legislators to serve up to 17 years in office.  Prop 28 will allow for more experienced legislators to serve and hopefully, decrease reliance on lobbyists and special interest groups who fill the void of a lack of institutional memory.

NBLC believes in strong public/private partnerships and building relationships between business and government for the betterment of the community.  For more information, visit us online at www.northbayleadership.org.

North Bay Leadership Council Endorsements for June Primary

North Bay Leadership Council (NBLC), a coalition of leading employers in Marin, Sonoma and Napa Counties, announces its endorsements for the June Primary.

As the only employer-led public policy organization that represents the North Bay, NBLC advocates for a regional perspective when addressing community concerns.  NBLC supports candidates that share the same values on improving education, increasing economic competitiveness, reforming public pensions and making government sustainable within today’s fiscal realities, improving transportations, and regulatory reform. 

The following candidates have been endorsed by NBLC for their balanced approach on key issues, knowledge, problem-solving skills and ability to address North Bay challenges:

Congressional District #2:
Jared Huffman

Congressional District #5:
Mike Thompson

Marin County Board of Supervisors:
District #4: Steve Kinsey and District #2: Katie Rice

Sonoma County Supervisors:
District #5: Efren Carrillo, District #1: John Sawyer and District #3: Shirlee Zane

Napa County Supervisor:
District #2: Mark Luce

NBLC also endorses Proposition 28, which makes term limits more flexible by allowing legislators to serve a total of 12 years in any office or combination thereof.  It closes a current loophole that allows some legislators to serve up to 17 years in office.  Prop 28 will allow for more experienced legislators to serve and hopefully, decrease reliance on lobbyists and special interest groups who fill the void of a lack of institutional memory.

NBLC believes in strong public/private partnerships and building relationships between business and government for the betterment of the community.  For more information on NBLC, go to www.northbayleadership.org or call (707) 283-0028.

Out of Marin … Out of Time!

What does Lucasfilm’s decision to pullout of the Grady Ranch project mean for the North Bay economy? A lot. Lucasfilm has been the iconic company headquartered in Marin County. They put Marin on the map and sent a message to other companies that you could start and grow a business in the county. With Lucas deciding that pursuing the final part of his master plan that he started decades ago was not worth the brain damage of dealing with regulatory agencies that throw a wrench in the works at the last minute, neighbors who want to do anything to delay the project and are willing to drag it through the courts for years and the uncertainty of how long and how much, who can blame George Lucas from throwing in the towel?  A quality company with a model project will be welcomed ANYWHERE but not Marin.  Marin has lost its chance for high-paying jobs, jobs that represent the future and would have been perfect for our talented young people.  And the people of Marin have lost a lot of money in terms of taxes and the multipliers that a thriving business like Lucasfilm produces.

Losing Grady Ranch is a wake-up call.  Let’s get over the shock of the loss and work together to prevent losing another Grady Ranch.  It is time for reform of the California Environmental Quality Act to stop these abuses.  It is time for tort reform so lawsuits aren’t frivolous. And it is time for anyone who cares about the future of Marin County, to support our local businesses and work with them to create and save jobs.  George Lucas is reminding us that businesses have a choice.  And his choice is to walk away and take all that he has to offer someplace where they will appreciate it.  After all he’s been through, who could blame him?

Pension Reform Coming?

Latest news out of Sacramento is that Democratic leaders Senate Pro Tem Darryl Steinberg and Assembly Speaker John Perez have agreed to take up pension reform by June in advance of approving the budget. The Governor’s office and Republican leaders have been actively pushing legislative approval of the 12 point plan.

Unfortunately, the scuttlebutt is that the Democratic leaders have trouble with the first four points of that plan.  And if those first four points aren’t part of the pension reform bill when it is adopted, it will likely kill the support of the business leaders.  Here are the first 4 points of the Governor’s Plan:

 

  1. Equal Sharing of Pension Costs: All Employees and Employers
    While many public employees make some contribution to their retirement – state employees contribute at least 8 percent of their salaries – some make none. Their employers pay the full amount of the annual cost of their pension benefits. The funding of annual normal pension costs should be shared equally by employees and employers.  My plan will require that all new and current employees transition to a contribution level of at least 50 percent of the annual cost of their pension benefits. Given the different levels of employee contributions, the move to a contribution level of at least 50 percent will be phased in at a pace that takes into account current contribution levels, current contracts and the collective bargaining process.  Regardless of pacing, this change delivers real near-term savings to public employers, who will see their share of annual employee pension costs decline.
  2. “Hybrid” Risk-Sharing Pension Plan: New Employees
    Most public employers provide employees with a defined benefit pension plan. The employer (and ultimately the taxpayer) guarantees annual pension benefits and bears all of the risk of investment losses under those plans. Most private sector employers, and some public employers, offer only 401(k)-type defined contribution plans that place the entire risk of loss on investments on employees and deliver no guaranteed benefit.
    I believe that all public employees should have a pension plan that strikes a fair balance between a guaranteed benefit and a benefit subject to investment risk. The “hybrid” plan I am proposing will include a reduced defined benefit component and a defined contribution component that will be managed professionally to reduce the risk of employee investment loss. The hybrid plan will combine those two components with Social Security and envisions payment of an annual retirement benefit that replaces 75 percent of an employee’s salary. That 75 percent target will be based on a full career of 30 years for safety employees, and 35 years for non-safety employees. The defined benefit component, the defined contribution component, and Social Security should make up roughly equal portions of the targeted retirement income level. For employees who don’t participate in Social Security, the goal will be that the defined benefit component will make up two-thirds, and the defined contribution component will make up the remaining one-third, of the targeted retirement benefit.
    The State Department of Finance will study and design hybrid plans for safety and non-safety employees, and will fashion a cap on the defined benefit portion of the plans to ensure that employers do not bear an unreasonable liability for high-income earners.
  3. Increase Retirement Ages: New Employees
    Over time, enriched retirement formulas have allowed employees to retire at ever-earlier ages. Many non-safety employees may now retire at age 55, and many safety employees may retire at age 50, with full retirement benefits. As a consequence, employers have been required to pay for benefits over longer and longer periods of time.  We have to align retirement ages with actual working years and life expectancy. Under my plan, all new public employees will work to a later age to qualify for full retirement benefits. For most new employees, retirement ages will be set at the Social Security retirement age, which is now 67. The retirement age for new safety employees will be less than 67, but commensurate with the ability of those employees to perform their jobs in a way that protects public safety.
  4. Require Three-Year Final Compensation to Stop Spiking: New Employees
    Pension benefits for some public employees are still calculated based on a single year of “final compensation.” That one-year rule encourages games and gimmicks in the last year of employment that artificially increase the compensation used to determine pension benefits. My plan will require that final compensation be defined, as it is now for new state employees, as the highest average annual compensation over a three-year period.
    The proposals are divided into two groups. The constitutional amendment Brown offered broadly outlines the pension changes more narrowly defined in the language to change state law. The governor’s plan won’t go forward without two-thirds of the Legislature voting to put the constitutional changes on the Nov. 6 ballot, which would then need voter approval from a majority.

The changes would kick in Jan. 1, 2013. Labor agreements that contradict the governor’s plan would prevail until the pacts expire.  The statutory language includes these proposals:

  • Ends additional retirement service credit purchases, or “airtime.”
  • Forfeits all or part of pensions for elected officials or civil servants convicted of a felony associated with their offices or jobs.
  • Ends retroactive pension enhancements.
  • Ends “pension holidays” for employers and employees.
  • Mandates that all employees pay “at least one-half” the normal costs for defined benefit plans or the defined portion of a hybrid plan. Employers may not pick up the employee share.
  • Limits the hours and wages for retirees who return to government work.
  • Calculates benefits based on a 36-month average of an employees’ wages.
  • Narrows the definition of wages that can be included for pension calculation purposes.
  • Establishes a hybrid pension system for new hires. It would replace 75 percent of an employee’s income after 30 years of service and a “normal” retirement age of 57 for public safety employees or, for all other workers, 35 years of service at age 67.
  • Sets 5 years and 52 years old as the minimum length of service and age that safety classes can qualify for retirement, 57 years old for all other groups.
  • Eliminates seats on the CalPERS Board of Administration now occupied by a member of State Personnel Board and an insurance industry representative
  • Gives CalPERS board membership to the Department of Finance director.
  • Adds an independent health insurance expert and a representative from a contracting agency to the CalPERS board, both appointed by the governor.
  • Adds three public representatives to CalPERS’ board, two appointed by the governor and one jointly appointed by the Assembly speaker and the Senate Rules Committee.
  • Sets 25 years of service as the threshold to receive 100 percent of the state’s retiree health benefit. Applies to new hires only.

Read more here: http://gov.ca.gov/docs/Twelve_Point_Pension_Reform_10.27.11.pdf

The Governor’s 12 point plan has been endorsed by the Marin County Board of Supervisors.  While the Plan is great progress, it isn’t all that needs to be done to make the public pension system sustainable.  The recent change in the rate of predicted return from 7.75% to 7.5 demonstrates how vulnerable the state, counties and cities are to being able to make the payments for a pension system that is consuming more revenue than ever possible to provide.
In other news, the independent effort to put an initiative on pension reform has been suspended.  The following is a statement from Dan Pellissier, president of California Pension Reform: “California Pension Reform is suspending its effort to qualify an initiative for the 2012 ballot after determining that the Attorney General’s false and misleading title and summary makes it nearly impossible to pass. We will continue to push our elected representatives to reform our broken pension system and if they fail, we will focus on qualifying an initiative for 2014. California taxpayers face more than $240 billion in pension debts that grow every year, a brutal math problem that requires courageous leadership instead of the special interest politics that is blocking meaningful reform today.”

In Memory of Supervisor Hal Brown

Hal Brown was more than Marin County’s longest serving Supervisor. He was a man who lived true to his beliefs in respecting people, be they women, children, County employees or his constituents. Hal had a marvelous sense of humor and sense of right and wrong, especially when it came to spending taxpayers’ money. He was a leader when needed such as when he led the battle to fix the flooding in the Ross Valley, and a team player when appropriate such as in working with the rest of his colleagues to make Marin County a better place to live and work. 

NBLC joins the many others in honoring Hal’s memory and knowing that his leadership will be missed. His fight with pancreatic cancer proved yet again his mettle and demonstrated his profound dignity. May he rest in peace and watch over us from heaven.

The Problem with Killing Money to Save Money

What would it mean if we ended all money and just went digital?  I think most of find pennies and nickels useless.  Did you know that it now costs more to mint them than they are worth?  According to David Wolman in “The End of Money,” (The Awl, February 2012) “a few years ago, the cost of making a penny peaked a 1.8 cents per cent, and nine cents per nickel.”  While those costs have fallen a little, compare that to only 34 cents to make a new dollar coin.  The U.S. Mint “has manufactured about half a trillion coins over the past generation, yet the mint itself estimates that 200 billion of them has fallen out of circulation.  According to one estimate, Americans forfeit $1 billion a year due to the time spent dealing with pennies at cash registers and in wallets,” says Wolman. Even retail is moving away from trying to entire buyers by pricing items at a penny less, i.e., $5.99 v. $6.00. 

Many countries have eliminated low value coins to save costs and bother.  But a funny thing happens when you begin to eliminate currency because it is so invaluable. Says Wolman, “Eliminating the penny is an admission of inflation.  What does a formal acknowledgement of the worthlessness of 1 cent say about the worth of a dollar? In other words, it doesn’t help the economy to remind people that prices are continually rising, while the purchasing power of their money is continually falling, even though both are true.” 

Luckily for Americans, we haven’t experience high inflation since the 1970s.  Wolman points out, “Younger Americans today have been so lulled by economic stability that the notion of all prices surging upward is alien.” He asks, “What’s riskier:  producing and circulating annoying coins at a loss, or injuring morale about the economy so much as to undermine faith in more than just the value of those little metal discs?”

Wolman’s solution is to move to digital currency.  He wishes that the Federal Reserve, Bank of England, European Central Bank and most other central banks would not mint more coins and just move into the “digital realm.”  And with an interesting note, he says that when people tip when paying with plastic, they tip more than with cash.  And with our cell phones becoming an easy way to pay for things, perhaps Wolman will get his wish to go cashless sooner than he thinks.