Senate Budget and Fiscal Review Subcommittee No. 5 on Corrections, Public Safety, Judiciary, Labor and Transportation

The Senate Budget Subcommitee No. 5 on Corrections, Public Safety, Judiciary, Labor and Transportation, will come to order. Good morning. We are holding our hearings here in the Capitol. I ask all members of the subcommitee to be present in Room 112 so we can establish a quorum and begin our hearing today. We will cover the California State Transportation Agency, California Transportation Commission, Department of Transportation, and Office of Inspector General at the High Speed Rail Authority.

The state is facing a significant budget problem this year, and we will be looking carefully at the budgets of all the departments under Sub 5 as we figure out how to solve the budget problem. To ensure we have time for everything on today's agenda, including public comments, which we will take on all items at the end of the hearing, we are asking presenters to keep their testimony under five minutes. I would also ask my fellow committee members to keep their comments and questions concise. Does anybody have anything to say right now? Seeing none. I would like to establish a quorum. Consultant, please call roll.

Wahab. Here. Durazo. Newman. Here. Seyarto.

The consultant notes a quorum has been established. Let's begin with our first issue. Issue number one, transportation budget solutions. I also want to just state for everybody that we will be timing every single presentation. No more than five minutes will be allowed. I also want to say that we are asking for every department to look up to 15% of somewhere to cut. Those are the suggestions we would like to make for every single department under Sub 5. So we will hear issue number one, transportation budget solutions, California State Transportation Agency. Please go ahead. You are being timed.

Good morning, Madam Chair and members. My name is Carlos Quant. I'm the deputy secretary for budget and administration here at the California State Transportation Agency. Today, I'll be providing an overview of the Governor's Budget solutions in the 2024 transportation budget. With me here today, I have Chief Deputy Secretary Chad Edison to help answer any questions that you may have. Over the past three years, with the support of the legislature, California has made significant one-time investments in the state's transportation infrastructure, totaling $16.1 billion.

Specifically, this funding was comprised of the following investments: $7.65 billion general fund for high-priority transit and rail infrastructure projects that improve statewide rail and transit connectivity between state, local and regional services and are designed to reduce traffic congestion and greenhouse gas production; $4.2 billion in Proposition 1A bond funds for the high-speed rail project; $1.2 billion for investments in port, freight and goods movement infrastructure; $1.1 billion for the Zero Emission Transit Capital Program, which supports investments in zero-emission vehicles, associated infrastructure or transit operations;

$1 billion general fund for Active Transportation Program projects, which expand walking and biking networks and increase the safety and mobility of non-motorized users; $400 million for the climate adaptation projects that support climate resiliency and reduce risks to infrastructure from extreme weather events; $350 million general fund for high priority grade separations projects which support critical safety improvements at grade crossings; and finally, $150 million for the Reconnecting Communities: Highways to Boulevards pilot program.

While the administration has made significant progress in implementing these investments, the state's general fund revenues have significantly declined, resulting in a structural budget deficit. To address the deficit, the Governor's Budget proposes approximately $4.8 billion in budget solutions. The first set of solutions are cash management solutions. These solutions align the budget with projected expenditures and leverage existing appropriations to meet project obligations until future appropriations are available.

The proposed budget includes $2.75 billion in cash management solutions, including $2.1 billion from the competitive Transit and Intercity Rail Capital Program; $400 million from the Active Transportation Program; $150 million from the Highways to Boulevards pilot program; and $100 million from the Port and Freight Infrastructure Program. These solutions are not expected to have any programmatic impacts. The next solution included in the Governor's Budget is a funding delay. The Governor's Budget proposes to delay $1 billion in TIRCP formula funding from fiscal year 2024-25 to 25-26.

The next solution is a fund shift. This solution proposes to reduce $791 million in general fund appropriations in the TIRCP program and backfill them with Greenhouse Gas Reduction Funds. The final solution is a budget reduction. This solution proposes $296 million in general fund reductions, including $200 million from the Active Transportation Program and $96 million from the 2021 Port of Oakland appropriation for various port improvements.

I would note that the Active Transportation reduction will not impact any existing commitments made during the most recent Active Transportation Program grant cycle, as the reduction would be applied to future grant award cycles. While the Governor's Budget for transportation includes several solutions, it also maintains roughly 99% of the funding for the historic investments made in clean transportation infrastructure. These investments are already benefiting communities throughout the state and have leveraged more than $27 billion in federal transportation funding from the bipartisan infrastructure law.

The administration looks forward to working with the legislature to continue to pursue investments in transportation infrastructure that improve safety, address climate action, and advance equity. My colleagues and I are available to respond to any questions you may have. Thank you.

Thank you. Do we have any comments from the LAO?

Thank you. Luke Koushmaro with the Legislative Analyst Office. We find that many of the proposed solutions are reasonable. Notably, the cash flow adjustments, while they would create cost pressures in future years, are designed to alleviate near-term cost pressures without impacting funding that has already been committed. Similarly, the proposed fund shift for competitive TIRCP reduces general fund pressures while maintaining overall funding that has already been committed.

And given the budget problem, the reductions to ATP and the Port of Oakland are reasonable, as this funding has not yet been committed. Additional solutions may be needed, though, if the budget problem worsens what was projected in the Governor's Budget. A few options are available to the legislature, including for the formula TIRCP funding. Previously, $2 billion general fund was planned for formula TIRCP in 24-25, and given the changed budget situation, the legislature may want to consider whether this one-time appropriation remains a top priority.

We note that the governor proposes a delay of $1 billion until 2025-26 and to shift an additional $261 million from general fund to GGRF. Because the funding has not yet been committed to specific projects, the legislature could consider additional options or alternatives such as reducing rather than delaying the $1 billion, changing the amount shifted to GGRF, or further reducing general fund. We know that these options do have trade-offs, notably reducing funding to support transportation infrastructure and operations.

The legislature could also consider shifting funding for certain programs from the general fund to state transportation funds, such as the State Highway Account or the Road Maintenance and Rehabilitation Account. The legislature took a similar action last year when it shifted $500 million from one-time general fund augmentations for transportation to the State Highway Account, SHA. We note that this could help address funding conditions, but comes with limitations and trade-offs.

Notably, many of these funds are limited to specific transportation purposes under the state constitution, and also this would reduce funding for other activities currently supported by these funds. We recommend that the legislature approve many of the proposed solutions, including the cash flow adjustments, the fund shift for competitive TIRCP, and the reductions for ATP in the Port of Oakland. We also recommend that the legislature identify additional potential budget solutions in transportation ahead of the May revision.

We note that these solutions likely will come with trade-offs offs such as supporting fuel transportation programs and activities that were previously intended. However, taking the time to consider, research and select potential options now will help prepare the legislature for decisions it could need to make in May or June when there is less time to review and consider these options. Thank you. I'm happy to answer questions.

Thank you. Do we have anybody from Department of Finance?

James Moore from Finance. I don't have anything to add right now, but happy to answer questions.

All right, we'll move to the panel. Panel, do you guys have--Senator Durazo.

Thank you. Madam Chair. I have a question. You said that the proposed delay in the TIRCP allocations would not have any impact on project delivery timelines. Could you explain what method you used to reach that conclusion, please?

Sure. Thank you for the question, Member Durazo. So we looked at the grant applications that were submitted for the projects for the TIRCP funding, and we basically aligned the budget with the anticipated project expenditure schedules. So these are large projects that are going to take place over multiple fiscal years. We've gotten the plans and we've aligned the budget to match with the projected expenditures. So we don't anticipate any impacts for the competitive TIRCP program funding cash flow solutions.

James Moore, Finance. I just wanted to add--depending on which piece of TIRCP you're talking about, the answer is different. So as agency just said, the competitive is a bucket of the $3.65 that we cash flowed. The formula TIRCP is the $1 billion delay, and that will result in locals getting the money later. And to the extent that they're prioritizing projects immediately, there could be some sort of delay. But for the competitive portion that is not expected to have any sort of program impact.

Your last comment, ... formula TIRCP. There would be, or there could be...?

I would defer to-

What's the difference between the two as far as impact on projects?

The competitive is the traditional TIRCP program. It's a competitive grant program that CalSTA administers. That, we're not expecting to have any sort of delays because as was stated earlier, we're really just aligning the budget with when expenditures are supposed to happen based on the application expenditure schedules.

The formula, which is the $4 billion that we talked about last year, one of the solutions is to delay a billion of that from the budget year to the year after that because that money is going out to locals and sitting in local coffers. If we delay a year, the $1 billion, it is going to result in locals getting the money later. And to the extent that they're planning on spending that money as soon as they get it, it could have programmatic impact. So I just want to make sure that for one bucket of TIRCP, we're saying this won't impact. For the other bucket, it is going to result in program impact.

And is there a way of getting a more clearer idea of what that impact would be? Do they report to you and say, "This is where we're at and it's going to fall right in the middle and we're going to really be severely impact." How do we gauge that impact, other than just generally say it's going to impact?

Member Durazo, I'm Chad Edison, chief deputy secretary at CalSTA. We expect the impacts to be minor in nature. Each of these agencies, especially the large ones, have already submitted their programming plans for, in some cases, all four years of money. The type of impact that you will see most often is a loss of interest earnings on that $1 billion being delivered earlier. So they will lose one year of interest earnings.

Most of them have not yet programmed those funds, and those that have have said that this is manageable. And so, again, there may be some impacts, but they will be receiving 75% of that money in this calendar year, and very few of them can spend the money that fast. Right? They'll be committing to contracts, but they won't be drawing down the funds. So while there are technically some impacts on how much money each agency will accumulate in interest earnings, that's the primary impact that we will see, rather than not being able to fund projects and move them forward.

Okay. Thank you.

Senator Newman.

I'm good. Mr. Edison just effectively answered my question, so thank you.

Thank you. Senator Seyarto.

I know you hesitate. So, looking at this, we have two reductions, about $296 million. That means that money just is not going to get spent. But then everything else with our $78 billion, or $73 billion deficit that we have, our delays going to the next year or being spread out amongst the next three years--or shifts. That's just taking it from one fund to another.

But on the delays going into the next year and the next year and the next year, we are potentially faced with exactly the same problem that we're having this year. So are those going to be prioritized in the budget so that they actually get funded, or are we going to keep kicking the can down the road?

And the people that are making plans that depend on this funding are going to make those plans and then not have the funding? Because at some point, we're going to have to come to grips with: we need more of the reductions than the delays and the shifts unless we have a magic pot of revenue that's going to be infused. And right now they're out looking for it, but I don't know if they found it yet. So what's the plan when we shift and delay, and then it's just not there?

James Moore with Department of Finance. What I can say is we prioritize the budget window and solve the budget problem in the budget window. To the extent that there are issues in the future, we will address them. I appreciate your point.

I understand what you're saying. Yeah. Okay. Thank you. I appreciate it.

Thank you. For CalSTA, the formula-based transit and inner-city rail capital program funding. How many regions have applied for funding and what are some common themes around the regions?

Chair, 45 of the 49 RTPAs have already submitted their initial allocation packages by the December 31 deadline. A few made only limited funding requests, but the vast majority submitted plans that either covered the entire four-year period or at least requested all of the funding available for this fiscal year. The kinds of themes--the plans are actually quite varied in nature, representing the diversity of needs around the state.

A significant number of agencies are applying substantial funding to operating expenses, ensuring that service cuts don't happen in their regions. This ranges from ensuring stability of microtransit and paratransit services in small cities and rural areas to providing significant support for Bay Area operations and those of Orange County. Many regions are using the funding to backstop the funding plans for major capital projects such as BART to San Jose or the LA Metro Gold Line to Montclair.

All right, and then for the Transit Transformation Task force that has been talked about a lot--and I specifically am very interested in this effort, too--there is a technical working group as well. Can you provide more detail on what this group will do and how this work relates to the work of the task force?

Sure. Thank you. So the secretary appointed the 25 member task force back in December. We had our first introductory meeting back then. Our first in-person meeting was held on February 29. We continue to meet bimonthly through April of 2025. In establishing the technical working group, that includes many subject matter experts who provide technical expertise for content ahead of the TTTF meetings and provide feedback that will help draft the preliminary final report.

Those working group members and the subject matter experts among them, this is an open invitation to suggest key people who would be valuable for us to consult with. We've reached out to the California Transit Association. We've reached out to many of the technical, or the transit task force members to ask for their names of people that they recommend for advising the technical working group and giving perhaps presentations to the task force itself.

With transit funds being, let's say, limited in its nature, as we know, do you believe that with the number of agencies that are duplicative in its nature in some regions should be consolidated?

That's not a question I'm necessarily prepared to answer at this point. I think there's a lot that has to be studied in each area around where the best opportunities for cooperation, consolidation in other kinds of efforts would take place. There are many things we're going to be studying in the task force that should feed into this conversation in terms of the best ways to work together to make transit more efficient and to address many of the needs of growing transit ridership.

And if there's duplicative nature, and let's say that these agencies that are being created--since there's no uniformity in the creation of these agencies, right? We know that a local city can create an agency. We know that a county can create an agency. We know that, for example, in Bay Area, there's 27 agencies in the nine Bay Area counties, and often doing the same service for the same residents during the same time. Do you think that's a good use of our funds?

This is an area where, again, the details matter on how to work together and there are many service needs. Each of these agencies is often serving key needs in their jurisdiction, and how to work together and provide better service throughout the region is a topic of key conversation. But each region has to have this dialogue around how best to work together when they have multiple agencies. And there are many unmet service needs in regions where being able to provide better service so that more people are attracted to transit is really critical. So this continues to be a really important conversation around how to work together.

Okay. And if there's agencies that are providing the same service at the same time for the same people, do you think that's why some public dollars being spent on the same service for the same people, for the same thing, for the same time for different agencies?

I would need to know the details of the specific examples in order to be able to comment on that.

All right, so study is a great idea, right? Let's study this idea and talk about this a little bit more. For the Department of Finance, what is the condition of the major state transportation funds, such as the State Highway Account and Road Maintenance and Rehabilitation Account? And why didn't the administration not propose to use these funds as part of this year's budget solutions?

Sure. James Moore with Finance. I don't have the fund balances with me, but they are relatively healthy. We're not facing any sort of immediate crunch. That being said, the reason that we didn't propose shifting some of these expenditures to the SHA is one, as was mentioned I think, by the LAO, the California Constitution restricts the ability to use SHA for some of this. Some of it like ATP, we could. Some of the other stuff, especially with transit, is much less certain.

We shifted a lot of money to the SHA from the general fund last year as part of solutions. Ultimately, the way that the transportation funding works at Caltrans, the major rehabilitation program, gets SHA that's not allocated to other things. So, in effect, we would be taking more money from the SHA, the major rehab program. Given the fact that we went and did that last year, as well as a lot of the storms and things that have happened since then, we didn't feel that it was appropriate to take money from the SHA as part of this solutions package.

Okay. And I do want to highlight that last year's proposal for transportation funding, if you remember, a significant portion was cut. Right? And there's obviously conversations in regards to what else are we going to potentially cut or how are we going to fund this in the future with future funding mechanisms.

So I just want to be very transparent in this, that we are asking for any duplicative services to be taken a look at, any additional cuts that you guys believe clearly show bloat, and again, trying to prioritize riders as well as our roads and the things that obviously our community members need. So I just want to prioritize that. If there's no further questions, we can move on to Senator Durazo.

Thank you. A quick question. I know there's reference to taking funds from the Greenhouse Gas Reduction Fund. I understand every year it could be whatever, and it changes. But this year, what is that total amount in that fund that you're pulling from and I think others are looking to or have proposed to pull from?

Sure. We have two different solutions that involve replacing general fund with the GGRF, both in the transit space. So the competitive TIRCP, which is the traditional grant program, $530 million is being swapped for the formula TIRCP. We're talking about $261. That represents larger than anticipated auction proceeds. And so we had extra GGRF. And with having received a lot of the applications and knowing where some of this TIRCP was going, looked at the legal requirements on GGRF and knew that that was a legal and appropriate swap.

I'm sorry, what was the amount again?

$261 million and $530 million.

Out of a total amount of what?

Of what? Yeah, that was my question.

The amount of GGRF. I don't have that information with me, but I can work with your staff.

If you can get that to me. Because we're pulling, and I'm not sure what we're pulling from.

Sure.

Thank you. All right. Seeing no further questions, I appreciate you guys'time. We're going to move on to issue number two, fleet replacement. We're going to first hear from Caltrans. Caltrans, please go ahead. We are going to time you at five minutes.

Thank you. Good morning, Chair and Senators. I'm Steven Keck, the chief financial officer for Caltrans. With me today is Keith Duncan, our chief budget officer as well. In our first proposal, Caltrans requests $279 million from the state highway account for a two year limited term initiative to replace the aging fleet and install zero emission vehicle infrastructure at Caltrans facilities across the state.

Our aging fleet of more than 12,000 vehicles represents environmental and operational challenges as they age and begin to no longer meet our operational needs.

For clarity, our request of $279 million includes 250 million for fleet replacement, $22.5 million for zero emission vehicle infrastructure, and $6.5 million to support the staff that will intake and modify these vehicles for Caltrans service.

The proposal addresses years 3 and 4 of a multiyear plan to replace our vehicles with those vehicles that have the highest emissions, the highest mileage, the highest repair costs, and vehicles that have been damaged in service. Caltrans plans to replace approximately 3000 vehicles in the next two years using this funding.

In this phase, we are going to focus on medium duty and heavy duty vehicles, as well as our offroad fleet. Caltran's fleet operations involve a very wide range of vehicles, including those that are responsible for repair and replacement of safety guardrails, our snow plows, vegetation removal, vegetation control, road striping, and a host of other specialized vehicles such as loaders, asphalt grinders, pavers, excavators. I have a huge list that I won't get into.

Our operations at Caltrans are the largest and most complex fleet in the estate of California, and those fleet operations are vital to maintaining transportation infrastructure and for the safety of our traveling public. Continuation of our multi year replacement plan through this BCP will ensure that we can continue to perform our vital role in California.

Thank you. Any comments from LAO?

We have not raised concerns with this proposal. Thank you.

Thank you. Department of Finance.

Ted Doan, Department of Finance. We don't have any comment at moment, but happy to answer any questions.

Definitely. And I do just want to highlight that we have a fellow in public safety, that's your son, and he's doing a great job. So I just wanted to give you a kudos on that. Other than that, do we have any panelists that have any questions? Senator Newman

Mr. Keck I see that's how we soften you up before we go get you off guard and lay into you. You can blame your son later, actually. Question on the sort of planned acquisition of medium and heavy duty zero emission vehicles. The market really hasn't come as far as it has for light duty.

My understanding there's only slightly over 400 medium and heavy duty zero emission trucks on the roads today, period. And so you are proposing to buy a very large number. A couple of considerations.

I'd love to hear your feedback. One big number. Where do they come from and how do you think about price? It's an early tense market. Availability tends to cost more. But probably more importantly, how do we think about this as a pilot or a basis for learning and replication by other jurisdictions that are under the clean fleets requirements, going to have to do the same thing. So in a perfect world, I think we would meter that progress but also learn from it.

But there is the question of just raw availability, particularly around heavy duty. Where there's some inherent challenges with battery operated vehicles, but the hydrogen fuel cell technology has yet to really come online in the California market at least. So it'll be interested to hear your thinking there.

Yeah, certainly. So first, let me address your question with regards to how we intend to purchase this fleet. We do have a zero emission vehicle first policy where we look for a vehicle that will meet our goals, and that's the first thing we purchase. If we can't go there, then we'll move to plug in hybrid.

If not that, then hybrid, then traditional internal combustion engines. What we've been doing with our fleet acquisition so far is heavily concentrating on those zero emission vehicles that are available now.

And that's what we did in phase one that helps to equalize our fleet. It brings us on as early adopters of electric vehicles and kind of builds up credit in meeting the Clean Air Plan. So we're building up that credit with the purchases that we've already done.

And then as we move into these types of vehicles, we're going to be pushing the industry to pony up. They've been saying, these are coming, these are coming. Now is the time. We've got the money, we've got the need.

Let's see them. And that will hopefully drive this and make it easier for everybody, ourselves, and those that come behind us. In terms of how this can provide an example for others to follow, I know that others have requested reporting information from us and we're happy to work with staff to come up with language that's not onerous to what we're trying to do, but that can provide information to others because this is a big task.

But the fact of the matter is we're not going to be able to find ZEVs in every category and there's an allowance for that within the Clean Air plan.

I appreciate it. I would suggest it's going to be really hard. In fact, it's probably not possible in the short term, especially in the heavy duty category, to find ZEVs. And so a little problematic if that doesn't happen on a couple of levels. Especially about meeting your advanced clean fleet requirements over time. But it's good to hear that you're open to some level of reporting.

Not onerous, but I would hope we'd include that in the budget language so that other jurisdictions would get the benefit of the leverage that Caltrans is going to apply. Thank you.

Senator Seyarto.

Thank you. I just want to touch. We have 3000 vehicles to replace, correct?

That's our plan for the next two years. Yes.

And the allocation needed is 558 million.

For the two years? Yes. 279 million a year. Yes.

Okay. So just as an example, a diesel fueled sweeper is $330,000 and a ZEV sweeper is about $708,000. So it's 114% more. And I'm not sure how because if we take that 3000, I know all of them aren't going to be street sweepers, but that's $186,000 per vehicle.

So when we're operating in a deficit that we don't see the revenue part coming back to life anytime real soon. It just seems to me, especially when we're not completely familiar with the long term technology.

In other words, we have a replacement program for the vehicles we know now. We don't know how long ZEV vehicles are going to last on the road, how long a ZEV street sweeper is going to last on the road. And if we're going to spend all this money, I mean, we're spending 114% more for a street sweeper trying to meet this goal.

And this seems to me the time that we kind of put those plans on hold for a little bit so that we can do things that make sense. If I went out to get a small vehicle for our household and I came home with a Porsche, my wife would probably look unfavorable upon that and she would probably question whether I should be beside her side much longer given just the financial implications of what I was doing.

So it doesn't make sense to me that we continue down this path of a very expensive plan to replace a bunch of vehicles, even if it's the air quality thing, the ZEV that we're trying to do, the electric vehicle thing, when we have a $73 billion deficit, we have to stop spending some money somewhere.

And everything I see is, well, we're going to spend more. We're justifying, well, we still have to spend twice as much on a vehicle here. So. How do we justify continuing down that path when we could get all the vehicles we need now or extend the life of some of the vehicles we have until we actually have an accurate read on what our revenue picture is going to get going to be in the future? Because that's the big thing that's missing.

If we had $100 million of additional revenue or $100 billion of additional revenue that we could see on the horizon that was accurate, I would be a lot more comfortable moving in that direction right now. We don't. And so I just don't understand how we are going to keep going down the road.

At some point we have to kind of, our departments who are in charge of spending the money are going to have to be honest with us and say this is not going to get our fiscal house in order in California if we keep doing this and staying the course on this while we have no way of paying for.

I guess my question is, are we able to extend the life of some vehicles and does it make more sense to replace some of those vehicles, like a street sweeper, with the same kind of vehicle that they have now for half as much? And then when that one runs its life, we have a better picture of what all of the other implications are of switching to a ZEV vehicle.

Certainly, Senator, your question really highlights the policy that we're operating under now. So we have a need to replace these aging vehicles and we have to do so under the current law and the policies that we follow.

Where we are now is a result of years of underinvestment in replacing our fleet. So some of our fleet vehicles are decades old and really cost more to repair than you can possibly imagine, especially some of the more specialized.

I'm familiar fire trucks are very expensive.

Very similar in the specialized vehicle. So the longer we push this off and we have for decades, which is why two years ago we came with this first step in this multi year plan. And really we need to follow the policies that are in place when we're replacing these vehicles. I will say, however, that these funds that we're using are state transportation funds, which comes from gas tax revenue.

We're not seeing the kind of shortfalls that we're seeing on the General Fund side in our own transportation space. So it's not quite the same calculation, but we completely understand where.

I understand the gas tax is what pays for this, but that's the pain we feel every time we go and pay $5 a gallon for gas. Understood. Thank you.

Senator Durazo. Thank you.

I want to ask, and hopefully I'm not too off on this, but it's my understanding that with regard to the fleet, that Caltrans is involved in building some of the state fleet in DGS facilities, and if so, are you procuring the parts and then manufacturing them in the facilities? Could you explain that build process?

Yeah, certainly. So, in many of our specialized vehicles, such as, for example, the guardrail replacement systems that I talked about earlier, those aren't things that you just go buy at a dealership. You need to first design your spec, your specifications for what we need to do. In this case, there's a crane on the back that helps set the posts, and there's a bunch of specialized equipment on a truck.

So what we do at Caltrans is we have an equipment shop, several equipment shops throughout the state, that will intake a blank vehicle, if you will, a chassis from a dealership or a dealer under contract, and then we fabricate and build what we need for Caltrans's purposes on that truck.

And that's part of what the staff that are mentioned in this BCP will be doing, is modifying the truck to fit our specific needs for that specialized equipment.

Okay. I didn't know we're in the manufacturing.

Zero, it's quite impressive. If you have time, we'd love to show you a tour.

Sounds like it. And I know you pay a lot of attention to the quality before purchasing the vehicles. And my next questions have to do with the quality not of the vehicles, but of the jobs that are created. And so, just wanted to ask about, can you, Caltrans, suggest ways for the framework of good jobs to be applied to other transportation investments? Can we use best value procurement with regards to enforcing job commitments?

And I say this because in 2022, we got high road standards for the school bus contracts. And then we also signed that year the law that requires DGS and Caltrans to apply standards for good jobs in zero emission transit vehicles or electric vehicles at $10 million or more. What is it that Caltrans can suggest to be applied to other transportation investments?

Senator, that's a very good question, and one I think that deserves a more complex answer than I'm prepared to give at this time. I'd love to work with your staff on that, but I will say with regards to best value procurement, we are utilizing that for at least half of our fleet that isn't subject to the DGS mass contracts. We actually really like that option. It gives us the option to look at what kind of jobs are created.

Also, what's the quality of the vehicle being purchased, not just the cheapest, but what's the best that will suit our needs last the longest and cost us the least in the long run.

Senator Newman.

So I just want to touch very quickly and add some context to Senator Seyarto's question, Mr. Keck's answer, because I think you have touched on something really important. So Caltrans and all these other jurisdictions are bound by goals that the Legislature has actually promulgated and embraced.

Correct me wrong, but the advanced clean fleets rule requires 50% of your purchases to be ZEVs now and 100% by 2027. And so your point is actually well taken.

There is the question, how do we find the right balance between sort of our fiscal constraints right now and those larger, very aspirational goals? We probably have to have those conversations in the policy form as well. But this is, I think, the tension that we're going to feel as we move through this budget crisis. So, I mean, I do appreciate the answer, but I think your point is good. It comes at a cost.

The predicate has always been that this has been worth the cost, but in an environment of real fiscal constraints, we probably have to revisit that at some point, because it has a huge impact on organizations like Caltrans. If you'd like to comment, fine. But I just want expressing my sympathy more than anything.

Appreciate that.

So I think it was mentioned that if somebody pulled up a Porsche in the driveway, what would happen? I think people would stay a little bit longer in that particular marriage, if there's a portion of the driveway.

There's no food.

There's a lot there. So one of the questions I have, it says here, obviously, $330,000 for a traditional type of engine truck and about $708,000 for a zero emission vehicle. The question I have is in regards to, is there cost saving analysis done in regards to the maintenance and the longevity of the vehicle. Is there any commentary on that?

Yeah, certainly. So in the short term, as we replace our fleet with electric vehicles, especially on what we've already experienced in the first two years of this program, we are seeing immediate reduction in maintenance costs because most of these vehicles come in under warranty.

Part of the problem that we have now is our fleet is, on average, I don't know the exact number, but it's like more than a decade old for each individual, on average for the cars.

So as they come in, they'll be under warranty. Also, what's not really talked about a lot is electric vehicles have a lot fewer and frankly, less complicated parts to them, and they do tend to last longer. So we are already seeing reduced maintenance costs.

We expect that to increase as we move forward. And by not allowing our fleet to age so much as we have by underinvestment, we'll see maintenance costs come down there as well.

Definitely. And I've also had conversations with other interested parties in regards to a cleaner environment, which we have to make investments in, whether they're tough or not, but we all want clean air and so forth. My understanding is that these vehicles, these clean vehicles are a little bit lighter as well and does less damage in infrastructure and potentially could carry. Is that accurate or somewhat accurate?

It is accurate in some cases. When it comes to damage on the roadway surface, you really don't see that until you get up into the ranges of many tens of thousands of pounds. A standard passenger vehicle does very little damage. It's mostly the larger vehicles. So it sort of depends on what we're replacing.

Okay. And then overall, I just wanted to also ask what is the estimated ongoing costs required to maintain and replace the fleet and how will this potentially evolve if we adopt more ZEVs?

Yeah, certainly. So the number that we've targeted for this PCP to about $279 million is very close to the additional funding that we need going forward. We estimate pretty roughly estimate that the cost to maintain our fleet and to keep up with replacement on a reasonable cycle that's consistent with Department of General services guidelines will cost somewhere around $300 million a year, some of which we already have, some of which we're asking for today.

And we expect as we move forward for maintenance costs to decrease and there will be increased costs as we move forward with these vehicles, because frankly, right now at least, electric vehicles do cost more than their Ayes counterparts.

Perfect.

It's kind of a balance.

Thank you. So with no further questions or comments, we can move on to issue number three, institutionalizing the California Integrated Travel project and building a data and digital service division. We're going to hear again from you guys, so please, you get five minutes.

I'll take much less than that.

Thank you.

In this request, we're looking for 70 permanent positions and ramping up to $26.3 million to institutionalize the California Integrated Travel project and establish a data and digital services division. This initiative aims to address the complex and fragmented transportation ecosystem in California, which encompasses more than 700 different transit service providers, a multitude of different fair payment systems, limited service applications, and diverse regional policies.

The lack of standardization and interoperability across these agencies, and even between the different modes leads to customer confusion and sometimes frustration, and it hampers ridership on our routes. This proposal will help to provide resources for the department to help agencies comply with general transit feed specifications and also known as GTFs, and for agencies to apply real time GTFs data and what the GTFs is.

It's a language that allows for transit routes and in the case of real time GTFs allows for the tracking of transit services in real time in an application like Google Maps or Apple Maps, instead of having a specialized application for whatever service you happen to be riding. It will also help us to help local agencies procure standardized enunciators and digital signage to procure standardized automatic passenger information systems.

To help locals expand the use of the open payment fare systems, which is very important for interoperability.

We will be able to provide rural and small transit agencies with federal grant assistance, be able to establish standardized transit and rail data across the state and provide data collection and analytics for those small agencies which will help them optimize their transit services.

The data and digital services division will oversee business process improvements related to that grant management, also performance measurement for these small agencies and the provision of technical assistance to them as well.

The program will help to modernize the transportation ecosystem and improve customer experiences. We want the rider to be comfortable and find it easy to use transit to increase that transit ridership and by leveraging the data that we have, the digital services that we intend to create under this program, and the partnerships that the state can create at the state level, not individual locals trying to talk to Google, we can really increase and create a more integrated transit program across the state.

All right, LAO.

We find that this proposal could have merit to the extent it helps increase public transit ridership, which aligns with certain legislative goals such as improving transportation mobility and reducing vehicle miles traveled in private vehicles.

However, particularly given the budget situation, we note that the Legislature may want to weigh the merits of this proposal against the budget situation. We note that this proposal does not use General Fund.

However, funding could be used to support other budget solutions, and also the Legislature could consider instead using the funding to provide direct assistance to public transit agencies that are facing fiscal cliffs.

Thank you.

James Worth, finance. We owe your staff an answer on one of her questions, and I just want to make sure that it's clear that this request doesn't come out of federal funding that goes to local transit, and it also doesn't take away from money that are going to the joint power authority, some of the anthrax that we fund through the state. So this is separate from both of those.

Thank you. Any comments? I do have one specifically working in technology in my previous life. My question is, how long is it going to take for you guys to actually develop a legitimate program that's utilized.

With regard to grant management? I think we've over. And, Keith, you can correct me if I'm wrong here. I believe that we completed development of that system with an earlier grant, and I think it's expected to go online this year, which will help to provide that grant assistance. What this is doing is actually providing. The digital data services division will help to provide that support for locals who will be using that system.

Most of these smaller and rural transit agencies don't have grant writers or even folks who can look every day to see when the latest federal grant opportunity is available. So those two systems will work. The system we've created will work together with the digital debate as digital data. I can't even say the division.

So my concern is that once a system is kind of developed and there's integrations, you don't necessarily need this much funding for ongoing support, especially if integration is in play and you have maybe one or two engineers working on it. So that's a concern I have.

The positions that we're looking for aren't to support the development and operation of the database or system. It's to provide the services to the local agencies, because we're talking about 700 different transit agencies across the state, most of which are very small. They don't have the not technical, but the knowledge of what's available to them to use at the federal side especially.

Okay.

And they don't have the systems to analyze their own data either. So the digital data services will be able to look at where people are getting on and off a bus, where the routes are experiencing delays. What can be done to improve that route, either physically or timing wise.

So back to my first question. How long is it going to take to really get this fully robust system in play?

Yeah, about two years before everything is completely in place. And it would be up and running, which is, as I mentioned earlier, we're ramping up to that funding of 26 million by year three.

Okay. I personally think those timelines are very long, especially for technology. And I'm just going to state this, I had a meeting with MTC that was talking about the Clipper card and it being utilized and them working on it for 20 years.

We also have, for example, DMV talking about how they have implementation of technology that is also taking years. And taking time and attention away from the services that are being provided on a daily basis to the general public.

So technology, honestly, the implementation and even the parallel service of what's in play now should be max, 12 months to maybe 18 months. And I don't understand why in government we are taking this long when we have this many bodies working on this project and we're wasting this much money without the feedback being quicker. Three years is a really long time.

Yeah, understood. And that three year timeline is for having everything in place, all of their system analytics in place, and providing that assistance to the local agencies. We already have. And one of the greatest successes of this program so far is this open, fair payment system that we've been pushing, which allows you to pay with something other than a clipper card, like a bank card, anywhere that you go. We already have nine agencies that are live on that program that we created that we've been spearheading.

Why do we do things internally? Do we not have consultants and other agencies that provide this type of data and these solutions out of the box?

Yeah, that is using out of the box technology and working with Department of General Services to get this equipment on their general.

Who's the provider?

I couldn't tell you. Do you know you don't have that information?

So we don't know the provider of probably this very interesting project that we're implementing for three years.

So to be clear, the implementation timeline is to get all of the services in place, the implementation of the database itself, we have that and we can provide that information. I don't have it personally as a finance guy, but we can provide that information for you. The three year timeline is to fully ramp up all the services that we're going to provide to the local agencies. It's not a technology service issue per se.

Why does it take three years?

I can be more detailed. Given a little more time, I can get back to your staff in a day or so with more information regarding.

Perfect. I want to make it very clear that as much as I support technology being utilized, the timelines from government agencies implementing technology as a whole is way too long. It doesn't matter which department I've talked to, every single hearing that has talked about technology, they're looking at three years, five years.

One agency that met with me in my office said 20 years. Coming from the Bay Area, coming from Silicon Valley. These timelines are not realistic for the average person.

I just want to clearly state that we need more aggressive timelines if we are investing, especially during an economic downturn, if we are investing in a particular project, we need to prioritize that with a faster timeline, faster metrics, more accountability.

If we have 700 agencies and the fact that they don't know what funding is available to them, number one, that's problematic to begin with from across the board on agencies, if we are not holding them accountable, as well as any other effort, accountable as to speed technology.

And again, service to the public at the end all be all. That's what's the most important in every agency. That should be priority.

And I'm going to be honest, going to the DMV just to do some paperwork, and you always have to, for some reason, go back inside. It's not good enough. So I just want to highlight that as much as possible. Three years takes way too long.

Everything should be basically on a 12 month to 618 month period. That's my personal opinion. We can move on to the next item. Thank you. Issue number four, establishing the office of Inspector General, high speed rail. We're going to hear from the office of Inspector General. You're timed at five minutes.

Good morning, Madam Chair, Members of the Committee. My name is Ben Belnap. I'm the first Inspector General in California of the high speed rail. The role of the office of the Inspector General the high speed rail is to improve oversight accountability by conducting independent, objective reviews of the operation, delivery and planning of the high speed rail.

The purpose of this budget request is to establish a fully functioning office of Inspector General of the high speed rail that can carry out the responsibilities outlined in state law, including the provision of independent assessments of the High Speed Rail Authority's business plans and project update reports and other reviews of the authority's project management, contracting and contractor oversight.

As to the specifics of this BCP, we are requesting a workload budget to hire an additional, or to hire 14 total positions, which equates to roughly $2 million in additional budget authority from the Transportation Fund. In summary, providing this requested funding at this time will improve oversight of the state's multibillion dollar high speed rail project. With that, I'll conclude, and I welcome any questions.

Senators, thank you so much. We have a few comments and recommendations on this proposal. Overall, we find that the level of requested resources appears reasonable for the OIG to accomplish its proposed work plan.

However, we do identify a few potential barriers to really the successful and independent operation of this new office, which was a real priority for the Legislature when the Legislature was negotiating, providing that $4.2 billion of remaining Prop 1A funds, the Legislature negotiated the creation of this office to really create very robust oversight over this multibillion dollar project.

So the three issues that we've identified, first, we note that some of the proposed positions are proposed on a temporary rather than ongoing basis, which could make it more difficult for the office to hire and retain some of those staff. We note that the original request put forward by the OIG was for permanent staff and that was modified.

Second, we note that the OIG currently lacks the authority to use one of the requested classifications, and the reason they want that classification is so they can pay a similar amount to some of the other audit agencies in the state or state agencies that use auditors, if I might.

And then the third issue that we identify is that there are a couple of areas where we think additional information to the Joint Legislative Budget Committee could increase the budgetary independence of the agency.

I'm happy to go into that in more detail if you'd like, but in the interest of time, I'll skip over that for now. So we have three recommendations that really stem from those comments. First, we recommend the Legislature Fund all of the positions on an ongoing basis and permanent basis to help ensure that the OIG can attract and retain the most qualified staff so they can do their work. Also that the Legislature provide the OIG with the authority to use the requested or similar classification.

And third, we have a couple of, again, pretty technical recommended changes related to the Joint Legislative Budget Committee process. I think the final comment I'd just like to add is that with the launch of the OIG, this is a really important time for the Legislature to assess whether the vision that's being put forward in this proposal, the work plan, is consistent with the Legislature's priorities for what this office should do in terms of the high speed rail project.

So to the extent that there are any changes that the Legislature wants to make, this is probably a good time to think about them, because you could provide either some direction to the new office or you could make some modifications to the budget to reflect whatever your priorities are. Happy to take. Questions?

Thank you. Department of Finance.

Bowen Peterson. Department of Finance so, since the High Speed Rail Office of Inspector General is a new Department. Finance feels as if the workload for all the positions may be justified, but without established workload, it is a challenge to determine exactly how many positions are going to be needed.

The temporary positions offer the flexibility needed to determine the total workload and their temporary nature will be reevaluated based on the actual work performance once hired.

Thank you, Senator Durazo.

Thank you, Madam Chair. Good to see you, Mr. Inspector General. I just want to ask, with regards to your oversight responsibilities, what is your role in the oversight of the procurement process?

Yeah, we have specific authority to look at the pre award of contracts that is built into state law. So one interpretation of that language is looking at RFPs. So we are currently working with the authority to review RFPs before they go out. So that's looking at statutory provisions, that's looking at scope of work, that's looking at term. Then we make recommendations based on what we're seeing in those RFPs. So we do have that authority and we are currently doing that.

And any follow up to the contract review of the contracts, like once they're awarded.

Absolutely. So part of our role needs to be the reviewing how the authority is overseeing its contractors. And also part of our role is to conduct investigations. So if our office receives allegations about a contractor, for instance, overbuilding, we need that authority and we have built into our work plan to review those allegations.

And with regards to the procurement process specifically, I know we're going through the purchase of the train sets. What suggestions do you have to make sure that high road and economic equity are implanted in that process, like the high road training partnership framework? And how do they inform the work of the agencies that are implementing the federal funding, the IJ funding that we're getting, such as high speed rail.

I know we both attended the same hearing where that discussion came up and we both heard the same presentation from the authority regarding certain provisions that are going to be in that RFP? It's on my to do list to go.

Although I've already reviewed that RFP. I didn't look for that specific angle. I'm going to look at that specific angle and make sure that those statements made in that hearing regarding those provisions are put in there.

Okay, great. Thank you.

Thank you. And I just want to ask you just what's the primary focus of the office and what are you hoping to achieve in the coming years?

Thank you. So since my appointment, I have hired three members of a management team and with that, what I would call a skeleton crew. We have started building out administrative functions, and we've also reviewed the 2023 Project update report.

That review resulted in formal recommendations we made to the authority about the business plan that's currently being drafted and will be finalized on May 1.

We are working actively with the authority right now to improve that business plan because we did find that there were aspects of it that were not addressing the SB 198 and state law that predates SB 198. So that's what we're working on currently.

Upcoming, with approval of this BCP, would enable our office to implement a work plan that we included with the BCP, or at least our discussions with finance and LAO.

That work plan includes reviewing the authority's efforts to control project costs, oversee its contractors, and secure the necessary funding for this project. We will finalize our work plan this spring through a formal risk assessment.

In that risk assessment process, we'll be reaching out to stakeholders that includes the Administration, legislative staff, and members where we can take in feedback and incorporate that in and finalize that work plan with the elements of the project that we think are most important to conduct operational reviews.

With those positions that we requested, we believe we can complete about six operational reviews each fiscal year in addition to our work on those annual reports. So that's what we're working towards right now.

Thank you.

Thank you, Senator Seyarto.

Yeah, I think we covered a lot of things in the hearing, and the role that you play here is just critical in determining whether this project is going off the rails, so to speak, because a lot of people in the public have lost confidence in the authority. And not just the authority, but the whole project, because the costs keep escalating and escalating.

And it's important for you have the tools that you need to do the job that we were hiring you for, which is to figure this out for us and give us an accurate read on either what we're in for or where we need to make serious modifications to our vision in respect to the four permanent versus temporary. The problem I see out there is the work environment.

The employment environment out there is you are competing with fewer people for those kinds of jobs are available for those, and they're not going to come to you with a temporary position. And if you have either a revolving door with four positions like that that are temporary could create this revolving door of people that come in for a few weeks and then until they land the job that they really want, that they're secure in.

Is that going to hamper your efforts to be able to do the job that we need you to do.

I think it could, when someone's considering leaving a job, a permanent job, and then go into a temporary position, I think I would use all my power of persuasion to get them to do that and to believe in the mission of this organization, I might be able to get people to come aboard.

But if the longer those positions stay temporary, and I think there's a three year window that the Department of Finance has put into the BCP, and I'm grateful for that.

They're not one year, they're three year. But as time progresses, I think those individuals would be looking elsewhere if those positions were not made permanent. I do think it would impact our ability for those positions to recruit and retain.

And to the Department of Finance, have you taken the current employment environment out there into consideration when you're making a recommendation that they be temporary as opposed to permanent?

Certainly. Matthew Macedo, Department of Finance. Understanding where Mr. Belnap is coming from as far as his challenges in the labor market and hiring people, but from our perspective, again, this office is new. There's not an established workload.

And so we didn't want to sort of provide positions that may end up getting jetty sitting around on a daily basis. I think in each budget window, we can work with the Inspector General's office to even make those permanent before the three year window is up.

So as the people come on board, we can definitely work with the Inspector General. And if there are challenges with sort of the revolving door, we can certainly work on that.

I would think it might be a little bit better to start with the employees you think you need. And if you need to add on, then you bring on permanent employees to get to the workforce that you need, as opposed to hiring a full contingent of people and then deciding, we really don't need those, because that's where it becomes problematic, I think, because at the end of the day, we want you to be successful in what we hired you to do.

One of my big beefs is we sometimes hire people to do stuff or create policies, and then we don't give the people that are supposed to carry those out the tools to do the job. And I want to make sure you have the tools so that we get what we're looking for as far as answers sooner rather than later. Thank you.

Thank you. Would you like to close?

Yes, madam, I'd like to respond to that. So my background is auditing. I worked two decades for the California State Auditor's office, eight years as deputy State Auditor. Part of my role was to listen to legislative requests for audits and create budgets for how long those requests would take to fulfill.

So when I create that work plan that outlines how many hours I think these items that are critical will take. It's coming from years of experience and I believe that the work plan we put out for this fiscal year is a baseline of what this office will be doing. We would only be going up from there, not below.

Thank you. Moving on to issue number five, motor vehicle account fund condition, we're going to hear from Department of Finance.

Bowen Peterson, Department of Finance. The motor Vehicle account provides funding to enforce the rules and regulations of the vehicle code and the use of vehicles on highways. The NVA continues to face operational shortfalls where the expenditures outpace revenues.

Since last May, revision revenue has increased $134 million over expectations from 2022 to 23 to 2024-25. However, new car sales and registration renewals continue to slow overall, affecting revenue growth.

The total revenue in 2024-25 is expected to be about $4.9 billion, with the main sources of that being a $71 vehicle registration fee and a $32 CHP fee. The expenditures are expected to total 5 billion, with CHP spending about 3 billion and DMV spending about 1.4 billion. Overall, the 2024-25 MVA Fund balance is expected to be about $53 million, and I'll be happy to answer any questions you may have.

All right, LAO.

Thank you, Lucasmar with the Legislative Analyst Office. Due to the ongoing structural imbalance in the MVA, it is currently projected to become insolvent in 2526 with the Fund balance continuing to grow negative after that. Based on current projections, we know there's a few major drivers to this.

First, there's the replacement of CHP and DMV field offices in recent years, workload associated with issuing new driver's license and ID cards that comply with federal standards known as real ID and supplemental pension payments related to a 2017-18 budget action.

Another major driver is increased employee compensation costs, which the state has limited ability to control because for more than 40 years, statutes has based CHP officer compensation on the average of five specific jurisdictions in the Bay Area and Southern California.

Because these pay increases for CHP officers, it's wholly dependent on the decisions made by these local governments. The state has limited ability to control the pay increases, and it could result in the amount of funding that's needed from MVA to be different than what's currently projected.

We note that the MVA has been expected to become insolvent in the past and the state has taken previous efforts to address this. Recent examples include ending the practice of transferring about 90 million annually from the MVA to the General Fund and allowing registration fees to be adjusted annually to account for inflation. We recommend that the Legislature consider the MVA cost pressures when evaluating new spending proposals.

Notably, as we'll discuss later in this panel, the Governor proposes new spending from the MVA that equates to roughly 22 million in 425 and 14 million ongoing until a plan is put in place. To address the MVA Fund condition, we recommend the Legislature set a high bar for considering new proposals funded from the MBA.

We also recommend the Legislature develop a plan to ensure the fund remains solvent. In order to do so, revenues must be brought into balance with its expenditure on an ongoing basis.

To achieve this, the state will need to either reduce MVA's costs, increase the fund's revenues, or adopt some combination of these strategies. We note that all of these options come with trade offs. For example, every $1 increase in vehicle registration fees would increase revenues by about $36 million. However, this would result in additional costs for households and businesses that own vehicles.

In addition, reducing costs could impact service levels, which would affect public satisfaction in the case of the DMV and public safety in the case of CHP. We also recommend that the Legislature consider these cost pressure impacts from employee compensation when addressing the MBA Fund condition.

To do so, the Legislature will want to consider how the fund will absorb future increases for employee compensation to ensure that the fund doesn't become insolvent again in the future, even if they address it currently, and then might also want to consider changing the methodology for setting CHP officer pay to increase the state's flexibility and oversight over the funds expenditures.

In addition, when evaluating a future memorandum of understanding negotiated between the Administration and employee unions, this Legislature may want to take into consideration the MVA Fund condition. Thank you. I'm happy to answer any questions.

Thank you. Any comments? So this is primarily a good chunk of this fund comes from vehicle registration fees, correct?

Correct.

Vehicle registration fees, even for the average person, has been going up almost nonstop, including my own that I took a look at. That was, and I will say it's for a family member's car, it's a lease and it was several $100. And this has fluctuated over the course of several leadership in the state. It goes up and it goes down depending on who's in office. My question is in regards to vehicle registration fees. Why is it annual and why can't we make it once every five years or change of title.

Matthew Mesito, Department of Finance. Yes, I understand the average fee for Californians is approximately $322, if I have it right. Just want to add to the record here that the revenue that goes into this fund is the flat vehicle registration fee of $71 and the CHP fee of $30.

The other fees that people pay that add up to several hundred are things like the vehicle license fee and the transportation improvement fee. And those go to other funds.

Certainly it wouldn't necessarily have to be an annual basis, but the departments that the MVA supports certainly have annual budgets. And so the challenge would be, would the revenue that we collect every five years, in your example, would that provide appropriate resources to the departments that the MVA supports?

So what does the registration fee really Fund just for the larger public? I just want to go through this with you.

It funds the regulation and enforcement of the vehicle code. And the departments that enforce the vehicle code are DMV and CHP primarily. There are some myriad other.

And what is this enforcement?

It is enforcement of traffic laws on the highways and enforcement of titling of vehicles and such.

Okay, but enforcement of traffic laws with CHP, correct?

Yes.

Okay. And those laws are usually under the jurisdiction of the Legislature, correct?

Okay. So why has it in years past fluctuated significantly in regards to the average person's cost?

Yes.

There are certain fees, like I mentioned, the vehicle license fee and the transportation improvement fee are based upon vehicle value, for instance. So the transportation improvement fee, there are certain brackets, ranges of vehicle value. So when you purchase a car, DMV sort of inputs that value, and then there's sort of formula that drops it down. And once you hit a certain bracket, just like tax bracket, it drops to a lower fee. So that's why it lowers.

And then there's adjustments upward, as LAO mentioned, the consumer price index adjustments.

Okay, and what are these brackets if it's not based on taxes? Correct.

It is not the brackets. I would have to defer to DMV's expertise on that. I could certainly provide it to you today. But they are, I want to say the top bracket is $60 for the tiff, for example. $60 for a vehicle worth over $50,000.

Okay. And then for leases and so forth, is that less or more?

Well, it would be paid by the owner of the vehicle. So they're the same for leases.

Okay. So we don't have necessarily a clear idea of what is in that formula.

We do. Every bracket has a fee tied to it.

And how are the brackets designated?

They're designated in statute. I believe. I'll get back to you on that. But they're, I want to say 40 to 50,000. And then I think it's like every 15 to 10 to 10-15.

What about a $20,000 vehicle?

I will get back to you on the specific fee for that.

And how are these fees really associated to the vehicles? Because when we had COVID and there was a supply shortage, on average, every vehicle had almost a $10,000 markup above sticker price. And that continued beyond COVID's supply shortage. That is not fair to our consumers. That is not fair to if this is part of the formula.

And I want to understand how you guys are basing the cost of the vehicle into this formula when it depends on the dealership, depends on a lot of other factors. And not everybody buys the same cost of the same vehicle for the same vehicle.

Certainly when you buy a vehicle the sale price is included as part of the entering it in for registration. And that is the value that they use. And then it's ticked down from there as years go by.

Okay. I'm very concerned about specifically our low income individuals, number one, because purchasing even a starter car, we always talk about starter homes, a starter car that is anywhere from 13,000 to 15,000 to even 20,000. The registration fees being several $100s.

I know you said the average is around 300 and something. It's more than that on average for a lot of people in my region, if you will, for cars that are cheaper than the $40,000 car you referenced.

So I'm deeply concerned about how we are prioritizing these formulas, especially when we know that there is a significant amount of greed also in industries and how that really correlates to the long term impacts and costs for the average resident who really cannot negotiate any other way out.

So if the registration fees are based on the sell of the car, not necessarily the average of this is what the car in total cost to make, which is a more standard figure.

Versus a dealership that is marking it up, 10-15,000 cash versus financing versus lease, versus whatever the case may be, versus somebody's credit. It's not fair. It's not a fair formula.

So I just want to highlight that when we're talking about equity in particular, especially as we are seeing an economic downturn, and we know poor people are usually the ones that suffer the most. And I just really want to highlight that even when we're talking about our formulas. Thank you.

We can move on to item number six. Issue number six, augmentation for retention of conflict of council we're going to first hear from CHP, the California Highway Patrol. You will have five minutes.

Good morning, Madam Chair, Committee Members. I want to thank you for the opportunity to be here today. I'm the assistant commissioner, Charlie Sampson. I'm here to talk about three different budget proposals. Also want to thank your staff for helping us prepare for this meeting today, and I'll be happy to answer any questions after. The California troll is.

California troll is requesting permanent funding augmentation of 4 million of the motor vehicle account for retention of outside conflict council to represent CHP officers in civil litigation arising from officer involved shootings.

The funding is required for retention outside conflict counsels because the Attorney General ago has declared a conflict of interest in their first AB 156 investigation pursuant to Government code section 12525.3 and will not represent CHP and its officers in civil litigation arising from the same incident.

The AGO advised their intent to continue to declare conflicts of interest in the government code section 12525.3. Shooting investigations outside counsel typically costs more than the AGO in most cases require several attorneys and paralegals.

As we know, in 2020, Governor Newsom signed into law Assembly Bill 156 police use of force, adding section 12525.3 to the government code that went into effect July 1, 2021.

Among other provisions, this statute required the AGO as a state prosecutor to investigate the incidents of officer involved shootings that resulted in the death of an unarmed civilian. Additionally, the department's ability to contract with outside counsel is authorized by government code section 1140 requires the written consent of the AGO.

Per government code section 1140, Legislature has declared that the overall efficiency, economy and state government be enhanced by the employment of the AGO as counsel for the representation of state agencies and employees in judicial proceedings.

However, the AGO has determined that its investigations of CHP officers involved in shooting incidents resulting in the death of an unarmed civilian pursuant to government code section 12525.3 will create a conflict in the AGO's representation of the Department and its officers in civil litigation arising from those incidents. This is a significant policy change for the CHP who has previously been able to rely on the AGO for representation.

The department will incur significant costs in order to hire multiple conflict counselors to represent the department and named defendants. This can result in multiple conflict counsel to represent the varying interests.

On average, the cost of a case with a single deputy Attorney General handling the aspects of a high profile, complex option involves shooting cases for the CHP, including costs of expert witnesses is approximately $1 million. Additionally, most cases there is more than one attorney per case and at least one paralegal also assigned.

This also does not include the amounts for settlements or judgment. If the request is denied, the CHP would not have the sufficient funds to cover the cost of retaining competent outside counsel without severely impacting CHP operations.

With the approval of this request, the department and its officers will continue to receive the defense and high profile, complex litigation by council with skills and expertise comparable to the AGO.

When the AGO declares a conflict of interest, the requested resources will be allocated to contracts within outside council and use with resources will be monitored by in house council, including review and authorization of expenditures by outside council forward to the defense of the Department and its officers.

The department is already subject to the costs associated with procuring conflict counsel in cases involving government code section 1225.3 upon implementation. On approval, implementation will be immediate. The CHP respectfully requests permanent funding augmentation of 4 million from the motor vehicle account for the retention of outside counsel. Thank you, ma'am.

Thank you, LAO.

We have not raised specific concerns of this proposal, but do note that it increases cost pressures to the NBA. Thank you.

Thank you. In recent years, how many CHP officers have been involved in shootings that has led to civil litigation?

Thank you, Madam Chair. We went from 29 to 23. As a grouping of officer involved shootings, we had 72 officer involved shootings with incidents in general. Within those incidents, we had 138 officers discharging their firearms.

Within those 72 incidents, 30 of them led to litigation between that five year period. But to note, within that five year period, litigation doesn't start immediately. When the incident happens, you have to adjust so that could be outside that window by the time litigation actually is received by the CHP.

The in since 2021, since 156 has been enacted, the CHP had seven involved shootings. Six of those have led to litigation, and of those, three of them have been received this year in 2024.

All right. And then how many have resulted in a death of.

All seven of them.

Are you talking deaths of all the 172 or just AB?

If you have the numbers, please share them.

Okay, I don't have the numbers for deaths involving all 72 Australian law shootings. That's specific to AB 1506.

Okay, and in the five years you had a total of how many shootings? 200 and something you said.

72.

72 in five years?

Yes. (09

Okay. And what type of policies or programs does the CHP have to minimize the number of officer involved shootings that could obviously take life?

The CHP has a robust training curriculum to prevent the use of force, or at least minimize use of forces as the California POST academy begins there with the cadets. We offer 1250 hours of training over 26 weeks.

Of that, 490 hours in 19 of the learning domains of the 52 are specific to law enforcement tactics that POST requires. Some of these courses include use of force, critical incidents, vehicle pullers, crisis crimes in progress scenarios, firearm trainings, arrest and control, and handling people in crisis.

Most importantly, the focus of the learning domains is to develop cadets ability to safely carry out their duties without exposing themselves and their partners and the public to undue risk and the department to liability. Our mission is to ensure they have fundamental understanding of when deadly force is justified as well as their actions may affect the incidents.

As important to maintain proficiency, officers complete continued professional training as required by post and their perishable skills program. Continuing training is 24 hours every two years with 20 hours of arrest, control, use of force tactics and firearms, strategic communication that have all elements of use of force and policies.

How many of those deaths were investigated by the AG?

Seven of them. (09

Okay. And then how many of them were deemed wrongful deaths?

None. (09

None. And what was the potential payout in those cases?

I don't have the specific litigation numbers for those at this time.

Okay. And the reason why I ask is because if the department is asking for a significant amount of money for outside council, which completely makes sense, especially if the AG wants to have zero conflict of interest in regards to representation, as well as investigation of the AG being able to take a look at any of these deaths, officer involved shootings in particular.

I just want to understand of these particular shootings, how much was paid out? Because that is important. If there obviously is a formula.

I served on local council. We obviously had to deal with some of these things. There is a formula, and I just want to understand, one, the length of the court cases. Two, how many were settled out of court? Three. What was the payout in general? Do we have any of those numbers?

I can give you a case study of a particular incident that may not cover all the areas that you asked for, but it'd give you a general idea of what.

Please.

Billing looks like for an Austrian wall shooting.

Yes.

Okay. In the current case, conflict council billed, in this particular case study, council billed for 224 hours and build a total of 123,000 for one year. He represents all defendants. That equals to an average approximately 559 hours per year.

At the outside council rate of $800 equals $447,200. However, even at $600, at 559 hours for the year, that would equal to $335,000.

This does not include expert fees and additional attorney fees or even paralegal support for the additional caveats, discovery motions, et cetera. As an example of CHP and two officers are named not only the one that shot the weapon, but all officers unseen.

This means that there could be three conflict council firms at three times 335,000 gets us to 1 million, slightly over 1 million, 1,600,000, and 200,000 per year. The lower rate of 600 for this one case, not including expert, et cetera. Having four officers involved in shootings in one year would equal to 4 million, as a conservative estimate.

Does your professional insurance cover any of this?

I don't have that answer for you, ma'am.

Insurance. So, for example, on a local basis, we have insurance. Obviously, our officers, it's part of their job that potentially something like this may happen. There's levels of being able to pay this out. But I just wanted to understand, is insurance covering any piece of it?

In my understanding, CHP is a self insured agency.

Okay. So I completely understand the need for funding and know representation. I appreciate this. I'm hoping that we can always take a look at the lowest end, a baseline. But I just want to also make sure that we are investing and try to ensure that some of these shootings do not take place at all.

People's lives are at stake, both the officer as well as the civilians that you guys have to deal with. But as much as possible, I just want to make sure that we're taking every measure to prioritize human life before anything. So thank you for your presentation.

Thank you, ma'am. (09

Issue number seven, capital outlay projects. We're going to hear again from California Highway Patrol. You will have five minutes.

Madam Chair. I have two capital outlay proposals, and I'll read through them both. The California High Patrol respectfully requests to replace existing current year authority of 13.1 million General Fund with 13.130 Public Building Construction Fund for the performance criteria phase of Gold Run, Redding, Los Banos, Antelope Valley, Barstow and the Porterville area replacement projects.

Each of these facilities were constructed in 1960s and have significant structural and functional deficiencies. Shifting the fund source to the Public Buildings Construction Fund ensures the mission critical projects can continue without undue delay during constraints of fiscal environment.

The California request 13.130 for the performance criteria phase following the following projects again Gold Run the replacement office, Redding area replacement office, Los Manos replacement office, Antelope Valley replacement, Barstow area replacement and Porterville area replacement. For the second capital outlay, it's the Keller Peak Replacement revert and fund.

The California Highway Patrol respectfully request replace the existing authority of 3,231,000 with a new appropriation of 4,877,000 from the motor vehicle account to the construction phase of the continuing Keller Peak Tower Replacement project. The project includes a replacement of a tower that collapsed in 2016.

The tower is needed to restore all in full communication capabilities. Keller Peak the Tower Replacement Revert Fund provided provide 4.87 million to revert to 3.31 at a net increase of 1.64 million from the motor vehicle count for the construction phase.

This project will consist of demolition in the existing tower foundation and construction of the 108 foot communication tower with antennas, foundations and feeding bridge. The total project costs are estimated to be 5,690,000, including preliminary plans of 220,000, working drawings of 590,000 and construction cost of 4,877,000.

The construction amount includes 2,841,000 for construction contracts, 199,000 for contingencies, 483,000 for architectural and engineering services, 778,000 for tower and 576,000 for other project costs. The preliminary plan started in July 2017 and were approved in April 2019.

Working drawings began in April of 2019 and were approved in 2023. October of 2023 construction is anticipated to begin in November of 2024 and completed in July of 2026. The design team has noted the original proposed foundation and retaining walls were insufficient for the 108 foot tower in high wind zones like Keller Peak.

In addition, construction must occur on a limited acreage site, increasing a project difficulty. The two factors resulting in the delay of the working drawings further increased cost.

Finally, the cost of steel needed to be needed for the tower have increased significantly since 2022. As a result, the existing authority is insufficient and the funding is necessary to ensure project this project can proceed.

Thank you, LAO.

We have not raised specific concerns with these proposals. However, we would note that while using lease revenue bonds reduces near term cost pressures, it does create greater cost pressures in future years.

The Administration has not yet indicated whether these cost pressures to pay the debt service would ultimately come from the MBA or the General Fund. But as we've noted in previous testimony, both funds are facing deficits.

Thank you. Department of Finance.

Randy Katz, Department of Finance no concerns with the CHP's request. And just briefly on the lease revenue. Part of the reason is debt service is an annual appropriation. So Governor's Budget. The Administration will request either MVA or General Fund and then the Legislature can deliberate with the Administration on which would be the better source for any given year.

Thank you. I hope that there is collaboration in long term focus. I do believe that when we have buildings and there are employees that go there, as well as the general public, that we should be investing in better and more secure and more energy efficient and longer lasting buildings.

So I appreciate your presentation. We can move on to the next item, issue number eight, capital outlay projects. We're going to hear from the DMV. We talked a lot about you guys today. Five minutes.

Good morning, Madam Chair. Members. LAO, my name is Lee Scott, chief budget officer of the Department of Motor Vehicles. With me today is our director, Steve Gordon. Thank you for the opportunity to address the committee today. We do have three items in front of you today. We'll start off with the calp outlay projects much similar to what was just presented with the CHP.

In the current fiscal year, we do have $2.5 billion that was approved by the General Fund for the performance criteria phase for the ELF Central Field Office Replacement project. This project is currently still in the acquisition phase.

The ELF central Field office is no longer a viable location and due to the structural functional deficiencies, we are looking to replace it.

This project will consolidate the El Central Field office, the leased Braley Field office, the Commercial Drive program, and the Local Investigation program into one state owned public field office. We are also requesting to revert 14.3 million in General Fund and replace it with 15.5 million from the Public Building Construction Fund to complete the construction phase of the Oxnard reconfiguration project.

The construction funding was approved back in 22-23 and the construction is estimated to begin in March of 25 as a result of the general cost increases, since the project was first approved back in 17-18, the overall project has increased a little bit by 1.5 million. With that, I'll pause and ask for any questions.

LAO.

General to the last item. We do not have any issues, but note the potential cost, pressure or implications.

Thank you Department of Finance.

Department of Finance no concerns and just echoing the comments from the previous item, thank you.

Thank you again. I do believe that we need to be investing in our infrastructure, so I appreciate your presentation and we can move on to issue number nine, REAL ID automated document verification. We will be hearing again from the DMV.

So again, thank you, Madam Chair. DMV is requesting 17 and a half million in fiscal year 24-25 for 21 ongoing positions. Software and consulting services supporting the Real ID document verification program. Since we implemented it in July of 22, the percentage of customers opting to upload documents prior to visiting a field office has grown from roughly 20% and climbing as high as almost 50%.

Customers who upload documents utilizing our services does reduce the overall transaction time in the office, which is huge for us, as well as making sure that we reduce it as much as possible by about four minutes. Included in this request is ongoing funding from our abbey AWS web hosting and EVE subscription services to support the program.

The program is already in place and will continue to be necessary in supporting new and existing workloads in the field offices, especially since the REAL ID enforcement date is upon us on May 7, 2025. The RADV technology stack has been expanded to some of the other customer service improvements, so it's not going to be just for our REAL ID.

Some of those are utilizing Abbey technology include our virtual field office that we've put in forward, a digital mailroom, lean sales, disabled parking placard, recertifications, online name changes, as well as accounts payable invoice processing. With that, we are happy to answer any questions.

Thank you, LAO.

We have not raised concerns with this proposal, but note the MVA cost pressures.

Thank you Department of Finance.

We have nothing to add at this moment.

All right, so I think you guys heard some of my commentary on the DMV previously, as well as registration costs and much more. So how does the DMV assess whether the RADV process improvement basically improves customer service?

And does the department have any information know the shortened the time the customers need to spend at a field office?

So Madam Chair, Steve Gordon, director of the Department, thank you for your earlier comments. I'm sure we have lots to discuss. So we absolutely do know that we're seeing a reduction in service times cycle times at the office.

When I started, if you looked at just REAL ID, there was a value stream map that detailed the steps it would take to acquire a REAL ID in the office and those exceeded 2021 minutes on average. That was done professionally third party consultants long before I got to the department. The transaction time now is sub 10 minutes, often running at eight minutes.

So we're seeing this technology changes in process improvements, removing unnecessary steps from the value stream app, have added significant capacity in the field office and also reduced the amount of time that the customer has to stand there while we're working and also reduce the pressure on wait times and otherwise.

So we've done a number of things that actually are measurable, demonstrable to show that wait times have come down dramatically and the ability to serve more customers with fewer resources has gone up dramatically.

Subscription costs year over year for these particular technology tools keep going up each year. How are you guys negotiating aggressively?

No, it's true. You are committed to a platform and some of these platforms we're building on. You talked about using things that exist in another set of terms. Many of the things we're building on are top of the Salesforce platform, but it is a platform that there is a possibility that costs could go up.

We are negotiating across the state with CDT and others to make sure we're getting the best possible negotiated rate given the size of the state.

So we're being aggressive, making sure the prices are as low as possible. We're using Gartner and other research services to figure out what the market will bear. So what are commercial firms of similar size? What are they able to get when negotiating these?

So we're trying to be as aggressive as possible, because in the end, this is our money we're negotiating with. We want to make sure this taxpayers that we're doing the best we can for that taxpayer, which in some cases is us.

So the State of California is considered a priority customer for almost every tech agency or a tech organization you can think of, right. Just based on economies of scale. If we have California residents using these particular services, the data that is being kept, how are you ensuring security of this data?

No, great question. So, first, any of the data that we actually collect during use on these systems is put into the proper FedraMp certified data center. So it is carved off air, gapped in many cases from any other commercial services.

So our goal is not to have this be in a public data set that an analytics company, somebody, maybe in your district, might be thinking about how to monetize. So we make sure that that is restricted and access is restricted and it's used only as appropriate for state services. So that's the overarching thing, Madam Chair,

What's the redundancy efforts?

If you think about redundancy in terms of AWS? So we use AWS as our hosting service, generally speaking. So we do have things in two particular regions. We do not a hot standby, because hot standbys are expensive, but we do have cold backups and so on to make sure that we can survive a critical failure.

Okay. And is there an investment in regards to all of the tech upgrades that you guys are trying to do in regards to privacy and security? Two very separate things.

Yes. And actually, one of the BCP proposals that is in your stack is for cybersecurity to meet the Cal secure framework. So, yes, privacy, we're also very focused on that. We get feedback from the ACLU and many others that participate in the space to make sure that, in fact, that any information we collect is needed, make sure we use it the proper way, and so on. And there are NIST guidelines and so on that we adhere to. And, of course, we take public comment.

Again, the ACLU has been very active in some of these areas, and we listen to their feedback and take it seriously.

Okay. And how are you securing it?

Securing back to the Cal secure framework is what we're using, where, of course, we do encryption, arrest encryption, to transit all of the basic stuff you would expect any agency like us to do. We, of course, audit ourselves to make sure that it works.

We are going through the state audit right now. The military Department is in auditing to make sure that we're hardened properly. Information is used properly, that we do penetration tests.

So we are hit from every agency, from CDT to military to others to make sure that, in fact, that we're doing all of the things at the highest level. It's easy to talk about, say, yeah, we're doing all these things. It's really hard to do. As I could tell by the expression on his face, it's very hard to do this well. But I think the team does a great job.

I appreciate it. I appreciate your answers, too. Thank you. Thank you for your presentation. No further comments.

Great. Thank you.

All right, we're moving on to public comments to ensure that everyone has a chance to be heard. Please limit your comments to 30 seconds. And if someone else has already made a similar comment, please just add a me, too. Thank you. Let's begin. Public comments.

Madam Chair, Aaron Reed, representing California Association Highway Partrolmen for 46 years. And in 46 years, they've only sent one letter, like, signed by the board of directors. This has never happened in my 46 years of representative.

That's how important the issue is of the LAO recommendation to modify or somehow eliminate the salary formula that's in statute. It was put in statute in 1974, signed by Ronald Reagan, and the bill was carried by Speaker Willie Brown. Willie Brown carried a second bill on the same issue. So the speaker did two bills relating to the formula.

Thank you.

If I may just say, we have 1000 vacancies and we have to do everything we can to recruit, and the formula only puts us in the top 100, in the middle, not near the top 10, not 25, not even the top 50. We're right in the middle with that. So I'd be happy to come to your office and go into detail, particularly about use of force.

I have a staff member named Elliot here sitting in the front row. You can definitely schedule something and have a conversation. Thank you. Next speaker.

Happy to do it. Thank you.

30 seconds again.

Thanks. I think it's still good morning. Steve Wallach. On behalf of the Alameda Contra Costa Transit District and the Napa Valley Transportation Authority want to speak in support of issue one to urge your support for the Governor's January Budget proposal regarding Transit Funding and particularly the proposal for the Transit Industry Rail Capital program. So thank you.

Thank you.

Good morning. Jeanie Ward-Waller here on behalf of CalBike, TransForm, Streets for All, as well as Leadership Counsel for Justice and Accountability, want to oppose the proposed cuts to the active transportation program. Super popular program.

90% of the funding has benefited disadvantaged communities. Would love to see that 200 million backfilled from the state highway account as the budget agreement last year agreed to. Thank you.

Thank you.

Hello. Michael Anzalone here with the California Mountain Biking Coalition, CalBike's dirtier cousin, just echoing the comments made by CalBike there. And we respectfully request that the funding be restored in the 2024 budget. Thank you.

Thank you.

Good afternoon. Mark Watts, representing the San Diego MTS and RCTC, the Riverside County Transportation Commission. On item one. We support full funding for that. In addition, we did submit a letter on behalf of transportation California construction industry and allied labor jointly expressing concern about what you just heard, which was a proposal by my predecessors here at the microphone to backfill the ATP.

I was very appreciative of your question that you asked about how the condition of the state highway account looks going forward, and we're getting close to that tipping point where taking any money out of the stream will be dangerous because we'll be not having a complete amount of funding coming through the process. Thank you very much for your patience.

Good afternoon, Chair Wahab. Brian Miramontes with AskMe, California. We understand the difficult decisions that the Legislature is going to make to address the budget deficit, and we appreciate the action that this body took last year to support Trans agency operations through the formula based TICRP.

That being said, we want to bring awareness to how the proposed deferral and potential clawback of these funds will impact the transit workforce and communities that depend on their services and as many of them face an upcoming fiscal cliff driven by the pandemic.

And so with that said, we are respectively urging caution on such proposals and look forward to working with the committee to identify budget solutions while mitigating the impact on the civil service workforce. Thank you.

Thank you.

Good afternoon. Kirk Blackburn here on behalf of the San Diego Association of Government, or SANDAG, first off, I want to thank the Legislature for their recognizing the importance of funding for transit in last year's budget and applaud the Governor for proposing to protect these critical TRSCP funds during this difficult budget year.

The TRSCP funding is essential to achieving the San Diego region and the state's climate and equity goals, and SANDAG strongly urges the Legislature to fight alongside the Governor to protect these funds.

However, also wanted to briefly express our deep concerns with the proposed cuts to the active transportation program. This is a critical program. Thank you.

Thank you. And just to FYI, all of you guys that would like to have a little bit longer, more in depth conversation, Elliot is here. We're more than happy to set up those conversations and talk about it, as well as, of course, our budget sub five committee staff. Thank you.

Thank you so much, Chair. Rachel Mueller, on behalf of NextGen California, aligning my comments on the proposed cuts to the ATP active transportation program.

It's a vital program and the ATP and other equity programs should be last in line for these cuts, especially because there's ample flexible funding that exists at the transportation agency thanks to the Bipartisan Infrastructure Law. We thank you for your consideration of this request. Thank you so much.

Thank you.

Madam Chair. Michael Pimentel here on behalf of the California Transit Association, also giving voice to the need to preserve the $5.1 billion for public transit agencies.

Want to note that that money came with extensive accountability requirements on our regions and our agencies on the use of those dollars and ultimately how they will be driving toward improvements to ridership and our fiscal stability as we move forward. We're also going to be engaging with the state in the California State Transportation Agency's transit transformation task force.

Thank you.

Those conversations are ongoing. We'll touch on a variety of topics, and so as conversations unfold this year, we'll be engaging with you and members of your caucus to help keep those funds moving to transit agencies. Thank you.

Thank you. I have great ideas of my own, so let's talk. Thank you.

Madam Chair. Alchemy Graham on behalf of CalTrain and the San Francisco Municipal Transportation Agency. Just here to echo previous comments made on the TIRCP.

These funds are necessary to deliver electrified service and support state climate goals. Redirection or delay of these desperately needed transit dollars will harm all of the riders and communities we serve, and for that reason, we urge your consideration in preserving these funds.

Good morning or afternoon, Chair. Anthony Tannehill with California Special Districts Association as well as portfolio for the League of California Cities, just want to thank Senator Newman for raising the issue on issue two of adding reporting language and thank the committee for entertaining it.

We know that this reporting language will help local agencies more effectively use vital public funds to implement the CARB mandates. Thank you.

Thank you.

Good afternoon. Danielle Bradley on behalf of the California State Association of Counties, want to echo the comments made by CSDA today on issue two related to the data reporting language for CalTran, zero emission vehicles and infrastructure. Thank you for Senator Newman's comments today and thank you to the committee for the inclusion on the agenda.

Thank you.

Good afternoon. My name is Waleed with the League of California Cities. I just want to thank you all for taking the time to speak on the action items, and I want to just echo the comments made by special districts and counties. Thank you again.

Thank you.

Good afternoon, Holly from any diocese with lighthouse public affairs here today. On behalf of Spur, a nonprofit public policy organization in the Bay Area, we urge the committee to maintain the 5.1 billion for transit agencies, and we also urge the subcommittee to consider restoring the 200 million in ATP funds because investments in walking and biking are not only cost effective, but they're saving lives. So thank you for consideration of these two measures.

Thank you.

Good afternoon, Madam Chairman. On behalf of the San Francisco Bay Area Rapid Transit District, we support the preservation of transit funding. Changing hats on behalf of the association of California Airports, we look forward to working with you and the committee on stemming the losses of FAA grants to small airports.

The Members of this Committee alone have lost 1.8 million from airports in your districts in the last 10 years, and we look forward to stopping the bleeding of FAA grants.

I actually have some smaller airports in my district. I would love for you to set up a conversation with our staff.

I think we're scheduled to meet on Monday.

Thank you.

Good afternoon. Afternoon, Madam Chair. Darryl Little, Jr. Here on behalf of NRDC. NRDC respectfully requests that the Legislature backfills the 200 $1.0 million General Fund cut to ATP with 200 million from the state highway account.

Restoring this ATP cut with state highway account funds is a straightforward solution with no adverse General Fund impacts and enormous clean air safety and equity benefits for all California communities. Thank you for your time.

Thank you. You're doing a double.

I'm back. I'll make this one quick.

10 seconds, okay?

Alchemy Graham, on behalf of CaCTI, the California City Transportation Initiative, just here to echo previous comments made on maintaining funding for the active transportation program. Thank you.

Pressure to be brief, Madam Chair Members Andrew Antwe here today on behalf of the Los Angeles County Metropolitan Transportation Authority, echoing comments that have been made by prior speakers in support of the governor's proposal for the $5.1 billion transportation funding package, specifically for public transportation, and then also on behalf of the Port of Los Angeles, we support the governor's $1.2 billion funding program for PFIP.

Thank you. All right, having heard from all members of the public Members, are there any additional questions? Seeing no members at all, we can move on. Thank you to all the individuals who participated in public testimony today.

If you were not able to testify, please submit your comments or suggestions in writing to the budget and fiscal review committee or visit our website. Your comment and suggestions are important to us, and we want to include your testimony in the official hearing record.

Thank you for everyone for your participation. We have concluded the agenda for today's hearings. The Senate Budget Subcommittee number five on corrections, public safety, judiciary, labor, and transportation is adjourned.