Assembly Budget Subcommittee No. 3 on Climate Crisis, Resources, Energy, and Transportation

Thank you. Good to know. Hey, good morning, everybody. Welcome to Subcommitee three on Climate Crisis, Resources, Energy, and Transportation. Today we're in room 447. We're going to have in person testimony only today. In terms of testimony, we are accepting public comments at the end of the hearing, both in the hearing room and on the phone. Public comment will be limited to 1 minute.

The phone number to connect is on the Committee website and should be also on the screen if you're watching over the Internet. The number, the public toll free number is 877-692-8957 the public access code is 1315447 if you encounter any problems, please contact the Assembly Budget Committee at 916-319-2099 and a staff member will assist you. We encourage the public to provide written testimony before the hearing. Please send your written testimony to budget sub six. Do you mean budget sub three?

budgetsub3@asm.ca.gov. I'm going to say that again. budgetsub3@asm.ca.gov. We're not ready to call the roll. We don't have a quorum yet, but welcome. Assemblymember Rivas right. We have 11 items on the consent calendar. I'd like to pull the vote only issue number three, and have Caltrans present on it after issue two and before issue three, and we won't take a vote on the vote only items at this point in time.

We are now ready to move to issue one, and that's the governor's proposal for budget solutions from the transportation budget, and we'd like to have all of the panelists come up. I'm going to ask the panelists to introduce themselves as they begin to speak, and I imagine that the undersecretary will be the first speaker, but I won't pursue that.

Thank you, Mr. Chair and Members, I will actually turn it over to Carlos Quant to present the first item.

And just to introduce yourself, please.

Mark Tollesfson, undersecretary, California State Transportation Agency.

Thank you very much, undersecretary.

Good morning, Mr. Chair and Members. My name is Carlos Quant. I'm the Deputy Secretary for Budget and Fiscal Policy here at the California State Transportation Agency. Today I'll be providing an overview of the General Fund augmentations included in the 2022 transportation supply chain resiliency and port infrastructure packages and the revisions proposed in the Governor's Budget. I have several Members of the Administration with me here today to help respond to any questions that you may have.

The 2022 transportation supply chain and port infrastructure package included an augmentation of approximately 10.8 billion General Fund for investments in the state's transportation, supply chain and port infrastructure. Specifically, this funding was comprised of the following investments. The first investment is approximately 7.7 billion General Fund in the transit and inner city rail capital program over four years for high priority rail and transit projects throughout the state. This included 3.7 billion that was available in 22-23 with 4 billion to become available after 22-23.

The next investment is approximately 1.2 billion in General Fund, which was comprised of 600 million annually in 22-23 and 23-24 for investments in port, freight and goods movement infrastructure. The next investment was approximately 1 billion General Fund for the Active Transportation Program. These projects encouraged the increased use of active modes of transportation such as walking and biking, and increased the safety and mobility of non motorized users. The next investment was 350,000,000 for high priority grade separation projects.

These projects support critical safety improvements at grade crossings. The next investment is 200 million for climate adaptation projects that support climate resiliency and reduce their risks to infrastructure and extreme weather events. The next investment is 180,000,000 for various supply chain investments which include establishing a goods movement workforce training campus, expanding the state's capacity to issue commercial driver's licenses, and improving port operations and goods movement efficiency.

The final investment is 150,000,000 General Fund to establish the Reconnecting Communities: Highways to Boulevards, which will inform the future conversion of key underutilized highways into multimodal modal corridors that serve existing residents. While the Administration has made significant progress in implementing these investments, the General Fund revenues have significantly declined, resulting in a structural budget deficit. To address this deficit, the Governor's Budget proposes several solutions, some of which impact the transportation budget.

Specifically, the Governor's Budget proposes a reduction of planned augmentations of 2.7 billion General Fund from the transportation budget. Funding delays and cost shifts to other funding sources comprised of the following solutions. The first solution is reducing the anticipated 4 billion in TIRCP augmentation to $2 billion. The out year funding augmentation would be spread across three fiscal years, 1 billion in 23-24 excuse me, and 500 million in 2024-25 and 2025-26.

This solution will leave an infusion of 5.7 billion General Fund in the TIRCP Program on top of its normal baseline funding for program operations. This funding will be used to leverage federal funding through the IIJA. I would note that this solution will not impact the current 2023 TIRCP Grant Program. The Governor's Budget also includes language that would restore this reduction to the extent that revenues are sufficient to support them.

The next solution would spread 600 million in port, freight and goods movement infrastructure, a plan for appropriation in 2023-24 across evenly across three fiscal years, 200 million annually across those years. We do not anticipate that this solution will significantly impact any of the projects as these large multiyear infrastructure projects will likely incur expenditures across multiple fiscal years. This solution aligns the availability of the funding with the anticipated receipt of the expenditures.

The next solution is to swap out 500 million General Fund in the active transportation program with 300 million from the state highway account. The solution would also utilize 200 million in previously authorized funding in previously reserved state highway account active transportation program funding from out year cycles available to offset the remainder of the 500 million dollar General Fund reduction. The CTC is currently administering a four year grant award cycle for the Active Transportation Program, which totals 1.7 billion available for grants in the program.

This funding leaves all of that amount intact for the current grant cycle and the program wouldn't realize that reduction until 2025-26. This funding would also be used to leverage additional funding through the IAJA. The next solution would delay the availability of 350,000,000 for high priority grade separations from 2023-24 to 2025-26. The funding for the grade separations was included in the 2023 TIRCP call for projects.

However, given the multiyear nature of these types of projects, the solution is not expected to significantly impact the ability to deliver the same number of originally planned projects that improve safety for people walking, biking and driving at rail crossings. This proposal also aligns the availability of the funding with the anticipated receipt of expenditures.

I would also note that this funding is a subset of the TIRCP program and because of the substantial availability of funding upfront, we anticipate that we should be able to manage the expenditures with available cash to the extent that we receive them. Lastly, the Governor's Budget proposes to replace 200 million General Fund augmentation for climate adaptation programs with funding from the state highway account. This concludes my presentation. My colleagues and I are available to answer any questions that you may have.

Thank you very much. Before we move over to fiscal policy, I want to welcome other members here and I think we can now take a roll and establish quorum.

[Roll Call]

Want to welcome Budget Chair Ting here also welcome. And now that we have a quorum, I do want to express and I appreciate the undersecretary being here as he was involved in all of this last year, but I would be remiss if I didn't mention that, the Legislature is certainly keenly aware that there are items in here that the Legislature had negotiated last year into the budget and they have been cut out of the budget.

And certainly there is a perception that those cuts have not been balanced in terms of it was all the legislators priorities that seem to have been cut. So it will be an issue we'll continue to have conversations with you about as we move forward. Department of Finance.

Department of Finance. Steve Wells from Department of Finance I just want to say we support the Governor's Budget and we're happy to answer any questions we have.

Great. Thank you very much. LAO.

Good morning, Mr. Chair and Committee Members. Frank Jimenez with the Legislative Analyst Office. When it comes to the governor's proposed solutions within transportation, we have four recommendations, the first one being we recommend the Legislature adopt a package of solutions that aligns with its priorities. Overall, we find that the governor's proposed solutions from the recent General Fund augmentations for transportation are reasonable. However, this represents the governor's priorities for what should be sustained and what should be cut.

The Legislature could come up with an alternative set of solutions that could be just as reasonable, whether that's a different mix of solutions within transportation or finding solutions from other parts of the budget to sustain high priority transportation programs. Overall, the Governor's Budget prioritizes sustaining funding for programs that have already been appropriated. If you look in your agendas on page 16, those are going to be the programs appropriated in 21-22 and 22-23.

We find this approach to be reasonable given that many of these programs have already started to award funding to projects and local agencies already underway. In applying for awards, the Governor also proposed a sustaining funding for a portion of the active transportation program and the full amount for the local climate adaptation programs. By shifting funds from the General Fund to the State Highway Account, the fund shifts minimize disruption to programs.

Similarly, many of these programs are already underway in allocating funding to projects, and local agencies are in the process of submitting applications. However, the fund shifts ultimately come with the trade off to the Legislature. Reductions in State Highway Account funds ultimately result in less funding for highway maintenance and rehabilitation projects. However, in our report, we note that the state is in a unique position to leverage the additional formula highway funding that's been made available under the Infrastructure Investment and Jobs Act, also known as IIJA.

While the fund shifts ultimately reduce funding for state highway maintenance and rehabilitation projects, the additional funding that's made available under IIJA would offset this one time shift. The largest reductions within the recent General Fund augmentations are for the population based TRCP funding that was agreed to in the budget year and the budget year plus one. We find these reductions reasonable given the magnitude of the budget problem facing the state in the budget year and the out years.

The Legislature provided a significant portion of its recent General Fund surpluses on one time and limited term activities. This provided the Legislature some underlying flexibility in case budget conditions weren't sustained. Given that we are in a different economic situation than we were six months ago, we find that these cuts are reasonable. These cuts would also prevent the Legislature from having to cut programs that are currently underway, and it would also prevent the Legislature from having to go into ongoing resources to find solutions.

Even with the governor's cuts to the population based TRCP, these still represent significant General Fund augmentations for transit capital improvements when compared to recent years. In our report, we note that some transit agencies across the state are facing operational shortfalls. The population based TRCP, we note, is for capital expenditures and shouldn't necessarily be viewed from the Legislature's perspective as helping with this problem directly.

However, the Legislature does have the option of opening up this funding for allowing some level of operational support, but we note that this would be a reprioritization of the funds and would likely require some statutory guidance allowing that. Our second recommendation is that the Legislature should reject the governor's proposed trigger restoration proposal.

The Governor's Budget includes a trigger restoration proposal for the population based TRCP funding from the budget year so that funding would go from 1 billion to its original 2 billion agreed to amount if in January 2024. The Administration estimates that the state has enough resources to fund its baseline activities and all of the programs on the trigger restoration proposal list. Currently, there's about $3.8 billion in programs on the trigger restoration proposal list, and it's an all or nothing approach.

So if the state does not have enough resources to fund its baseline activities and the full $3.8 billion, none of it triggers back on, we find that the likelihood that this trigger restoration occurs is very unlikely, and the Legislature should view these as pure reductions instead of programs that have the potential to be restored. We find that the proposal also minimizes the Legislature's authority and flexibility to respond to changing revenue conditions.

Our third recommendation is that we recommend the Legislature direct the Administration to not solicit applications or award funding before the Legislature grants spending authority. Costa is currently in the process of awarding the $600 million agreed to in the budget year for the port and freight infrastructure program. If you look in your agendas on page 16 it's the amounts agreed to in 2-324.

We also note that under the governor's proposal that this program would be delayed so that 600 million in the budget year would be three parts of 200 million over three fiscal years. While the out year funding was agreed to, it has not been appropriated by the Legislature and is still subject to adjustments. We find this particularly important in a year where the state faces a budget problem.

We find that the awarding funding before it is appropriated creates a dynamic where the Legislature would then need to consider whether it should cut funds that have already been promised to local agencies. This places the responsibility for the disruption on the Legislature's shoulders when it was the Administration prematurely awarding funding to local agencies and creating that promise. Our last recommendation is that we recommend the Legislature use spring to weigh alternative budget solutions and additional cuts.

Based on more recent economic data, our office estimates that the budget problem could be worse than what is currently estimated in the Governor's January budget. In our report, we identify several programs where additional solutions could be reasonable, either to sustain a different mix of solutions across the budget, both within transportation or in other areas, or also to address a much larger budget problem. These programs either have similar efforts and funding being provided at the federal level through IJA.

They have continuous appropriations that could cover out your cost or new programs with limited outcomes. For instance, the Clean California Local Grant Program has funding of $100 million agreed to in the budget year. It has two years worth of projects from previous augmentations that are working towards a completion date of June 2024. The Legislature could wait until those projects are completed, see what outcomes are, and see whether an additional augmentation is warranted. So reducing the amounts in the budget year would provide some additional budget solutions. With that ends my comments. Happy to take any questions.

Thank you very much. Appreciate that. Want to point out that two years of having surpluses, the LAO had one role, but now that we're in budget deficits, the LAO has, I think, a more critical role for the Legislature, and it is to make sure that we have many options and creative options in terms of what do we do with the various cuts that we have moving forward. With that, before I go to Member questions and comments, we've had a request from Member Essayli for a courtesy of letting him ask a question because he needs to leave, and unless any Members have the same similar kind of situation, I'll let Mr. Essayli ask us one question of the undersecretary and then we'll move on.

Thank you, Mr. Chair. I appreciate you accommodating me. I wanted to ask a question to the undersecretary for the Department of Transportation. Is it Tollefson?

That's correct.

Okay. Thank you for being here. So, I represent a commuter district. Most of the people in my district have to travel 30 plus miles either from Riverside County to Orange County or LA County for work every day. There's very limited public transportation and often they're forced to get on the 15 and 91 every morning. And it takes about 2 hours to go each direction.

And unfortunately, right now the only alternative they have is to use toll roads, which can cost up to $25 in one direction, which I think is very unfair to people who can't afford it. I only raised this to bring to your attention. We delivered a letter yesterday to your office and I'm hoping you'll get an opportunity to look at it on the 15 freeway there is a proposed project for the I-15 Corridor Operations Project to add an auxiliary lane from Calico to Weirick.

And it's totally funded and would be built by the Riverside County Transportation Commission. And it's adding less than a mile of road for an aux lane to ease the congestion. The project was denied by your agency due to an air quality rule. And I'm just simply asking you, please, for the sake of my constituents, if you'll revisit that and take a look at that. It is adding an enormous bottleneck and tons of congestion and people are desperate for relief. So it's more of an ask if you just will take a look at the letter and possibly work with my office on that.

Great. Thank you, Assembly Member. And we are definitely happy to take a look at that. I know there are obviously air quality kind of challenges in the region, but definitely our team will take a look at the letter and work with your office on it.

I appreciate it. Thank you so much. Thank you, Mr. Chair.

You're welcome. Committee Members, do we have questions? Go ahead, Mr. Connolly.

Thank you. Good morning and thank you, panel. Just a few follow up questions. Can Caltrans provide the Committee an update on the last round of TIRCP project awards, when the next round will be awarded, and how much funding was requested out of the 3.65 billion available for projects?

Sure. Thank you for the question, Assembly Member. So we are currently in the middle of the 2023 TIRCP grant award cycle, and thus far we have awarded over two and a half $1.0 billion to existing TIRCP projects. So the remaining 1.2 billion will be committed and awarded to projects. And we expect the award announcements to come by the end of April.

Great. Can you also discuss of the General Fund transportation programs, which programs have actually not been awarded and how much General Fund would that include? For example, the LAO mentioned Clean California as an example, how much has not been awarded out of that program?

Certainly. So we've committed to funding, or are currently in the process of committing funding for the TIRCP program, the Port and Freight Infrastructure Program, and the Active Transportation Program. So that leaves the Climate Adaptation program, the highways to Boulevards program, and the Clean California program with funding yet to be awarded. However, we've already begun the grant cycles and we intend to make those awards by the end of the calendar year.

Great, thanks. And finally, as we know and as was noted by the LAO, the Governor's Budget proposes to make funding cuts subject to a trigger, meaning if there are more funds available, the funding would be restored. The 22 Budget Act also included triggers. Can the Administration state whether the triggers from the 22 Budget act were restored in the governor's January budget?

Steve Wells, the Department of Finance. The last set of triggers that were included in the budget for transportation were originally, when we had the transportation program, the infrastructure program, there was included triggers that basically there needed to be a legislative action that was taken by October of that year. There was no legislative action taken. I mean, negotiations continued and then we, through AB 180 is when we replaced the 3.3 billion that was subject to the triggers.

We replaced that with 5.4 billion, which included increasing the amount from the TRRCP from the 2 billion that was originally proposed and included in the budget to 3.65 billion, which is the 3.65 billion that we've awarded in this first year cycle. That also included the 1.05 billion ATP, which is of the 1.7 billion that we are doing in this year's cycle. That's the full amount that we're funding.

It also included the $200 million for climate adaptation, the 350,000,000 for grade separations, and the 150,000,000 for Highways Boulevard. So all of those things were added and supplemented to the original 3.3 that was subject to the triggers that we had before. So all of those things essentially are part of already appropriated funding.

And to the extent that that funding we've talked about, our proposed solutions include the swapping of the SHA for the Climate Adaptation and the swapping of the SHA for the ATP to make sure that everything that we've gone out to on this year's cycle in the 2023 cycle can be fully funded.

Great, thanks.

Any other Committee Members? I have a couple of then follow up questions. First of all, I appreciate the answer on the triggers regarding transportation. How about the triggers in the other areas of the budget? Can you respond?

I'm unaware. I don't know of what the other areas are. I could check with my other colleagues and get back to you.

If you could do that and get back to us, we would appreciate that. LAO.

Assembly Member, I believe most of the triggers are in the climate space and environmental space, housing and transportation. So those are going to be the three main policy areas where there are trigger restoration proposals.

And do you know the answer to that question at this point in time?

No, don't have a response to that one. Sorry.

We will look forward to that. I think I've heard a little bit of a disconnect between LAO about port funding and your answer about port funding. So can you clarify on port funding? Have the dollars been awarded yet on port funding?

Sure. So we've actually started our port and freight infrastructure grant cycle, and we've made the $1.2 billion available for awards, and we are currently in the process of reviewing the port applications. We intend to make all of the awards by the end of March or the beginning of April.

Okay, so they haven't been awarded yet.

Right.

Great. Thank you. And then PID funding. LAO, you want to respond to that?

Rachel Ehlers with the LAO, I think just on this point, on the ports, they haven't been awarded yet, but as you just heard, they're in the process of awarding the funding even though the authority to spend the funding has not yet been granted by the Legislature until the next budget act. So that's really the basis behind our recommendation of directing the Administration not to proceed with awarding funding that they don't yet have the authority from the Legislature to spend.

Great. Thank you for clarifying that. Appreciate it. With the PID funding, it only includes the 50 positions, which is fewer than the authorized positions in 2019-20 and 2021-22. You're going to have a minimum of $2 billion in new highway dollars over the next five years. The fundamental question is, do you actually have the staff that you need and the resources allocated for the PIDs so that you can build the projects?

Thank you for the question, Assembly Member. I will defer to my colleague Steven Keck over at Caltrans.

We should have ditched finances. Good morning, Assemblymembers. Steven Keck with Caltrans. I'm the chief financial officer. With regards to the PIDs, our proposal for this year is part of our biennial zero-based budget for PIDs. We did an out-of-cycle augmentation to our PIDs workload last budget year when IIJA came along and provided us additional funding. At that time, we requested 50 additional positions above our baseline at that point, which was 370 positions.

So this current year request of 420, we believe, is the appropriate workload for us to be able to deliver all the PIDs. Important note, most of the General Fund funding that's coming to the Department will not require PIDs. CIRCP, for example, doesn't require PIDS funding going to local agencies that will be used off the state highway system will not require PIDs. So a lot of the money that California is receiving, we won't have to do PIDS for.

We've also changed the way that we do PIDs and now look at a multi-asset approach. When we go to do a project, we're not just looking at pavement anymore, we're looking at pavement, sidewalks, bridge rails, everything all at once. And that's really allowed us to do more with the resources that we have in place.

Great. Thank you. How many of the PID positions are vacant at this point in time?

Yeah, so PID workload is a little bit different than probably almost anything you're going to hear this year or any other year. When we do PIDs, it's a multidisciplinary approach. So we might have an engineer who normally would work on project specific work, do a PID for a week or two where the rest of the time they're doing some other work. We might have right away agents also contributing to that PID where they might otherwise be acquiring property.

So that time that they work on a PID, they charge to our PID workload overhead, not overhead, to our workload bucket. And that adds up to what you might consider to be filled positions. But there isn't a person whose job it is just to sit there and do PIDs all day long. So I couldn't tell you in the current year what our ultimate result will be until after the fiscal year.

But generally we utilize 320 or 340 PYs in the last year, equivalents, position equivalents in the last year to do the workload.

That's how many you have to do the workload or that's how many have vacant?

No, I'm sorry. Yes, 340 is about how many we have burned, utilized in the last year.

And how does that compare to 2015 and 16? Just to give us an idea.

In 2015-16, I have that number. I think 319 was the number in that year. Thank you.

All right, Department of Finance, any other members before we move on to issue two? Chair Ting.

Thank you, Mr. Chair. Just to follow up on the chair's previous question, on the port and freight infrastructure program, can you articulate under whose authority you were given to initiate the grant program?

Thank you for the question, chair Ting. So we set up this program consistent with the way that we award all of the other large transportation infrastructure programs, and we made the decision to make that funding available because it positions the state to leverage and maximize the federal funding that's available to support these projects. That was the reason we set it up.

But you don't have financial authority to initiate the program, so who gave you the authority to do?

So we, based on the budget agreement that we had with the Legislature.

LAO's saying that money's not there, the funding hasn't been appropriated. That's correct.

So how can you initiate a program when the funding hasn't been appropriated?

Steve Wells, Department of Finance.

How many other programs are you initiating where you don't have money to grant?

And I think that's part of the issue when we start talking about general fund versus our normal operating with SHA and our state highway account money and our SB 1 funds. So we have a stream of revenue, and then, because projects take a long time to initiate and they take a long time to plan, to organize, then the award is made, and then it takes multiple years to liquidate.

The process is to look at a four-year plan, look at how much money we're going to have available, and then start the process of saying this is going to be available. Because if we were to wait, as it is with capital projects, the longer you wait, the more the project costs and then just delayed in utilities.

So I think we've implemented the PORTS program using sort of the standard transportation process, which is to look at anticipated forward funds, start the process of requesting what we believe will be available, but then not promising the funds. The funds are always contingent upon them. They're being actually appropriated by the Legislature.

Is this general fund money or the state highway account money? I'm sorry.

What I'm saying, that's the normal process. Now, in the case of the PORTS money, this is general fund money. But the process that was used to go out for projects was essentially the same type of process that we use for all of the transportation projects. STIP, SHOPP, TRCP, ATP. All of those do forward-looking, and then we go out for call for projects against a forward-looking calendar of available revenues.

So you're telling me this is an agency that initiates funding grant proposals traditionally without any funding authority.

We initiate the process of calling for projects, of planning for projects based on planned available revenue. But all of the projects are then subject to the revenue, the appropriation by the Legislature. That's why when we have swings up and down, that's part of the process. But we do not wait until there's $100 million available and then set aside that $100 million for a project that might last six or seven years before it gets done.

From the planning process to the end process, we anticipate and then plan on a year by year basis based on the funding available, which again, is easier to do as we anticipate. Gasoline tax money is very reliable, very easy, and that's where we saw general fund. This is an augmentation. That's why we were focusing it on one-time projects.

But then as part of the process of, you know, going out for awards, at the point at which the funding is made available, we would traditionally have already available to us what people would want to do with it. And so the agency has made the call for projects to say, hey, on this $1 billion, what projects would you guys apply that to? And again, the awards haven't been made.

And then to the extent that the awards are made, all of our awards, when we make the awards, are contingent upon legislative approval of funding.

Got it. Go ahead.

Oh, if I may. Yeah, I was just going to add, while an award may be made, ultimately the cash will not be available until that appropriation is made in the latter year. And oftentimes with these large-scale projects that take multiple years, they're looking for the upfront commitment and not necessarily the cash, and that will help us position a project, the state, to potentially draw down future federal funds because of that commitment of those state resources.

So I'm going to ask LAO, so why did you highlight this one program, the Department saying this is their modus operandi?

Yeah, I think the distinction here, Assemblymember, is that generally with transportation projects administered by the state, these come from gasoline, diesel and a couple of vehicle fees. And those monies are generally appropriated annually in the budget act. Some are continuously appropriated so that revenue stream is steady and consistent. Same with federal funds. The Federal Government provides a five-year spending act, and the state has its known resources on what it can go out and award.

I think the distinction here with this particular program is that it's a general fund augmentation. The CalSTA received $600 million in the current year that it's currently awarding, and then it has $600 million agreed to in the budget year. So they're trying to advance that $600 million in a budget year to award in the current year.

I think that's where we draw the distinction of, hey, this funding hasn't been appropriated by the Legislature, and they're trying to accelerate this $600 million. Which puts the Legislature in a difficult position if they've awarded and promised this funding to local agencies. And at the same time, the Legislature is dealing with the budget problem.

So if you're trying to look for additional solutions to close the budget gap and the agency has already awarded projects, it puts you all in a difficult position, because then you would have to look at cutting funding that has been promised to local agencies when the departments haven't had the authority to award that funding.

Okay, but the Department is saying that this is how they generally do business. So you're saying this is the only area that's a general fund appropriation. All the other areas are special funds?

Generally with the special funds they're appropriated each annual year and through cash management, the Department awards projects out on a rolling basis. It looks at its window of when appropriations will be coming in and begins to award projects and uses its cash management strategies to ensure that appropriated funds are going to awarded projects. I think the distinction here is that this is general fund and quite unique.

So they're employing strategies that normally work with consistent special funds and federal funds to general fund, which doesn't necessarily line up with how the Legislature appropriates this general fund. And I think the issues highlighted even more given that we're in a budget problem where on the special fund side, we're not seeing a dip in revenues where it causes that concern. But then general fund side, I think that's where the distinction is.

I forget last year, but if you could refresh my memory, when we passed the budget act last year, I know we did a number of appropriations that were perceived as multi year. Obviously, you can't really do multi year, but there was the intention when we passed the budget last year. Was that part of our agreement last year?

Yeah, on page 16, it outlays the multi-year agreement of how the funding would be spent. If you look at the bottom of the chart, under the supply chain package, there's the port and freight infrastructure program. And as you can see, it's $600 million in the current year. $600 million in the budget year. So based on what has been passed in each budget act, the Administration only has the authority to spend that initial $600 million in the current year. That budget year.

Funding that $600 million is still waiting for appropriation, of course.

Okay, thank you. I also just wanted to just sort of reiterate, just going back to the broader issue of the governor's January proposal, just want to reiterate the chair's concerns, I think, around the transportation cuts, we thought very hard about the need to invest in a lot of infrastructure. I think there's a concern that the agency itself has not caught up to California's vision of transportation.

While the agency is called agency for transportation, it's very much focused on roads and cars and has not caught up on transit, has not caught up on active transportation. And we thought that the investments that were made last year was just beginning to start to try to even some of that. I don't think that for most of us who live in heavily urbanized areas don't really believe that we can sort of build enough roads to really move the population as we grow as a state.

And so I think the concerns is one of the main reasons. One of the main economic drivers for allowing us to grow, increase population will really be doing significant infrastructure investments on active transportation as well as on public transit. Just saying that we're going to keep repaving roads and hoping that gridlock and increased car traffic will allow our economy to grow. We think that's just not a recipe for success over the next 50 to 100 years. So we're very, very concerned about the governor's proposal.

We'll be obviously discussing that as we go and finish our June budget. But just want to just reiterate that for the record.

Thank you for that. And what I would say is that, first off, immense appreciation for the transportation package that was approved last year. That really fits in with a lot of the ideals that our California State Transportation agency as well as Caltrans has in terms of kind of moving towards a multimodal future. Our climate action plan for transportation infrastructure is going to guide us as we move forward, transitioning more, as you mentioned, away from just solely focusing on highways to looking at more multimodal options.

I think with a challenging budget, obviously, it comes with challenging decisions. That's one of the reasons why we, at least with those out, your formula dollars, wanted to include the trigger language that the LAO had mentioned to just show that that is still a priority. Should revenues become available, they will go back into those transit and intercity rail programs.

So very much appreciate the undersecretary's comments. I guess I would say if it's a priority, then it shouldn't be part of a trigger. Priorities aren't part of a trigger. They're in the proposal. So if we're going to prioritize transit, I can't say that I would prioritize transit in it for it to be in a trigger.

I would like to follow up by just trying to clarify how often have we used this advanced technique, this advanced funding technique with general fund dollars?

We normally don't have general fund dollars in transportations budget. I've been doing it for 15 years now and very small, little general funds, sometimes an operational thing, but as far as large-scale infrastructure, general funds just not part of our so this is.

So this is the first time that we have LAO pointing this out. They're pointing out something that's unprecedented generally for the state.

For transportation. Yes, this level of general fund commitment is unprecedented.

I would echo the same thing that Assembly Member Ting has just brought up. While we have cuts, while the budget proposes cuts on the transit side, we are doing this pre-authorization of the general funding that is not assured yet by the Legislature. So, Assemblymember Friedman?

I wasn't trying to wait until the end. I wasn't going to speak, but the chair is pushing me to. So first I want to thank the governor's office and the LAO for the analysis. And I do think that in a very difficult budget year, there are a lot of cuts here that are prudent. So I may be one of the only people involved in this to say that I do appreciate the work.

And I think that there's a balance here of shifting funds, of looking at what's actually ready to go forward and saying if it's not ready, we're going to push that off into later years. And I do think that the Governor and the Administration have made their values clear through CAPT and this budget and certainly through the budget allocations that were made last year. And I very much agree with the direction.

I would like to point out, though, that while CAPT is a wonderful guiding document, we still have a lot of funding formulas that are based on kind of the old way of doing business. A bulk of our funding still does go into highway capacity, increasing projects.

As you probably know, last year I did two bills to try to align our funding formulas with captive, with the governor's vision, and I wasn't successful in one case in getting them through the Legislature and the other one, it was vetoed even though it was codifying the administration's own goals. I found that very disappointing.

And I think it's very important that we do make sure that everyone from our MPOs and the groups that are planning our projects all the way up to CTC and that are all on the same page with that different mobility future, those alternate mobility type future projects that they may be on the books for MPOs, but they're not necessarily rising to the top of the priority list, nor are they receiving the bulk of funding.

So I do think this year going forward, it's very important that we do take a very hard look at the projects that are being funded. And I understand there's legacy projects, but just because we've been working on something for a number of years doesn't mean that it's the right project. Now, CARB has based their emissions goals for the state on a 25 percent reduction in BMT, but we don't have a clear roadmap as to how we get there.

So we have got to change what we're putting our funding into. And that means allowing us to change all of those formulas and all those directions at every single level. I've met with the MPOs, they bring up a lot of local barriers to moving towards projects that give us the VMT reductions that we're looking for. I think it's important that we look at that, and I think it's important that we allow this Legislature to do more aggressive work legislatively to align with those goals.

So, yes, I'm making a pitch for my legislative package this year in this space. I hope they receive a better fate. But I do think that if we are not in alignment, we may not end up with the kind of quality projects that we want. Thank you so much.

Just one final list of questions. So I know that you've mentioned, LAO mentioned the 600 million that's been already started to be initiated on the 600 million for the port and freight infrastructure program. Have you also initiated proposals for the TERSIP and the Clean California local grant program?

Thank you for the question, Chair Ting. Yes, we're currently in the process of initiating the grants for the TIRCP awards. So we've already awarded over two and a half billion of those awards to existing projects.

I mean, the ones that part of the agreement was the $2 billion for 23-24 and the $100 million for 23-24. So just like you're already going for the 600 million in plant, port and infrastructure program, are you doing the same for those other two programs?

No, we're not currently doing the same for those programs. And that funding was really reserved to be distributed on a formula basis by the locals. So we didn't touch those funds. Those funds would have been allocated in a future TRCP grant process.

I see. So because they're by formula, you didn't feel the need to initiate the program?

The authority was really for the locals to make those decisions. So we didn't want to touch.

I would just make a comment. Yeah, agree with everything Mr. Quant mentioned. On the population base, it's distributed on a formula basis, so there's really nothing to award. Once the funding becomes live, it gets sent out to the locals to propose projects. I will note for the Clean California local grant program, Caltrans administers this program and they're starting to solicit applications with the intent to award funding in the budget year.

So that's the distinction there, I think with the Port and freight infrastructure program, they're awarding funding in the current year that's planned for the budget year. Caltrans is soliciting applications with the intent to award in the budget year.

So then why would you award programs and not wait till July 1? I guess so.

When we award the program funding, we're not anticipating the expenditures to come in for several fiscal years. There are several steps that they need to take, the agencies need to take in order to start drawing down this funding and.

I'm sorry, can you repeat that? I'm just trying to process what you said.

I think one of the things I would like to add on the port funding. So on the clean California funding, we're not really using that to leverage any federal funds. But on the port funding, there is a timing issue. We basically need to tell the feds, hey, look, we've got 1.2 billion available. Give us however much money we're asking.

And what date is that? Do we have to let the Federal Government know?

That ongoing, I believe that there's no foes currently.

There's a variety of programs that the state can leverage at the federal level. Those will roll out at various times during the year. The Porton infrastructure development program.

Is there a deadline before June 30th?

So there are programs that will be rolling out this spring in which a lot of the port projects.

Is there a deadline before June 30?

There is, yes.

For which program?

So the Port infrastructure development program, I believe the raise program, there's a number of federal programs. I don't have those in front of me right now in terms of the timelines, but all of those will be rolling out this spring with deadlines likely before June.

Okay. If you could get that. Happy to do so back to us. We'd appreciate that. Thank you.

I would like to point out that I am very supportive of the port infrastructure programs, but I'm also supportive of making sure that we don't find ourselves in that awkward situation of having them be awarded in the Legislature, potentially deciding that there are other priorities that we have.

So before we go to item two, I do want to point out the fact that item two, I think, very much relates to the conversation we're having right now because we will be discussing the fiscal cliff, the transit fiscal cliff that is out there. And so this issue, in terms of what we're doing with the TERCP funding, I think we're going to have to have a very robust conversation about transit.

And getting aligned with the Administration will be extremely important for the health of transit agencies here in California. And so the comments in the conversation we've had here about where we're going and priorities will certainly translate over to that. So we look forward to working with you on all of this as we move forward, but particularly the issues that we've raised here today. So thank you very much for being here today. Really appreciate it.

And before we go to item issue two, we're going to do vote on the vote only items while we still have everybody here. It's vote only items except for vote only item number three, which we will cover later. Thank you. Great. Thank you. So we need a motion for that. Thank you very much, Mr. Connolly. Seconded by Assemblymember Reevis Revis. [Roll Call]

All right, we are ready to move to item two, issue two for us, and we have new panelists that want to come up. Thank you. All right, so before we begin this, I do want to start with a few comments. The fiscal cliff that we will be discussing, amongst other things, as we talk about transit is, in my perception, truly a really serious problem with very challenging and no obvious solutions for us at this point in time.

Today we're not going to be making any decisions, but what we do want to do is try to make sure we use this hearing to establish from the legislature's, from the Assembly's position, what's the process we're going to use to try to gather all the data that we need, make sure that we clearly look at all of the solutions out there, the advantages and disadvantages of various solutions, as we try to frame this issue for a healthy decision on our part.

For those people that are listening and aren't aware of what we mean when we talk about the fiscal cliff. The fiscal cliff is a serious deficit in the operations and maintenance budgets of many of the transit agencies and the important transit agencies here in California. Up to this point in time, the State of California has funded capital projects for transit agencies, but has not funded operations and maintenance.

And the State of California is now getting requests to fund operations and maintenance, which is a significant precedent in terms of that request. Just to set the scene, ridership in transit was dropping before COVID ridership plunged during COVID and ridership has not bounced back very much since then. And it is a combination of people's perception of transit now at this point in time.

The Los Angeles Times had a very significant article just yesterday about the metro ridership and remote work and changes in lifestyles as we move forward. I think the fundamental question that needs to be asked as we move forward is, is this drop in ridership temporary or is it permanent? Because that influences all kinds of decisions as we go forward. Whether those two things and those decisions lead, I mean, that question then leads to many other questions that are out there.

Who has what long term responsibility for the funding of operations and maintenance as we go forward? What is the role of local government, regional governments, these transportation agencies, versus the role of the state government, particularly in the area of operations and maintenance and decisions about what are the transit issues that go forward. And one of the challenges I think that we have to recognize is that in general, as technology improves in a society, the rate of change increases in a society.

And that rate of change means that a transit system has to also be flexible and be able to change with changes in lifestyles and changes in technology as they go forward. Trying to put that all together while we're trying to figure out this fiscal cliff is going to be a genuine challenge as we go forward.

So thanks for indulging me with that sort of overview, but I've been mentioning to my colleagues in the Assembly that this is going to be a difficult issue, that we need everybody to weigh in. We need stakeholders to be creative as they think about their situation and what they can do as the Legislature and the governor's office wrestles with this big challenge in front of all of us here in California.

So with that, appreciate the panel being there and if the panelists will introduce themselves as they begin their comments, and we'll start off, I believe, with the Transit Association.

All right. Well, good morning, Mr. Chair and Committee Members. I'm Michael Pimentel, Executive Director of the California Transit Association. I just want to start off by thanking you for the opportunity to be before you today to talk through the operational funding challenges faced by my California transit agencies and my membership more broadly.

And before I jump into my remarks, I just want to note for the record that our Association is a nonprofit trade organization that represents here in Sacramento more than 220 Member organizations from across California's transit industry, and that does include 85 transit and rail agency Members. I think as I look around, every one of the Members of this Committee have membership within my Association. And so the staff report, I believe, does a good job of setting the stage for this topic.

And it does so by making reference to the recent Joint Hearing of the Assembly and Senate transportation committees that was focused on rebuilding transit ridership. And I want to thank chair Friedman for having brought that forum together. Now, some of you may recall I presented at that hearing on behalf of my Members to discuss the challenges faced by my industry, the external and internal factors creating these challenges, and our recommendations for addressing our short term needs while we as an industry build into long term sustainability.

Now, in my testimony this morning, I'll reemphasize several of the critical messages I delivered at that Joint Hearing. But I also want to speak directly to various of the questions that were presented in the staff report for today's hearing. And I'll begin with, I think, the topic that is on everyone's mind, which is what is the need for the industry with regards to operations funding.

Now, based on a survey we conducted from our membership in January of 2023, we estimate that the operations funding shortfall faced by California transit agencies is at least $6 billion and possibly as much as $8 billion over the next five years.

Now, as we previously broadcast, these reported shortfalls are driven by a variety of factors, including first, Low transit ridership, which I'll just reflect as a function of changed commute patterns, rider safety concerns, as was noted in the start of this hearing, as well as our state's housing affordability crisis. All of these combined, again have influenced low transit ridership and have reduced fair revenues.

Now, I also want to note that we have also seen increased operational cost during the last few years, and this is driven primarily by a tight labor market. Here we see that workers have a bargaining advantage. They're utilizing that bargaining advantage to get higher wages. And we're hearing routinely of agencies that are entering into three or five year contracts that have within them inflators of 20% to 30% in that time frame.

Now, I also want to note that we are also facing the high cost of fuel, and this is just a result of supply shocks I think have influenced all of our daily lives. They are also having an impact on the markets that our agencies pull from. But I also want to highlight that we are facing increased costs for capital. A lot of this is being driven by the supply chain issues that are well noted across a variety of industries as well as inflation.

And then finally, want to make note of the reality that we are adopting cleaner, more expensive transit vehicle technologies. This is being driven by mandates here at the state level. The reality is that all those technologies cost well more than their internal combustion engine counterparts. Now, as you might expect, our survey data shows that projected funding shortfalls increase over time and are inversely related to the depletion of federal COVID relief funds.

And so, for some additional context, our data shows that 46% of our survey respondents will fully expend their federal COVID relief by the end of the next state fiscal year. That would be fiscal year 2324 and that another 10% will be fully expending their relief by that following state fiscal year fiscal year 2425.

Now, this depletion of relief funds by most agencies in that state fiscal year 23-24 leads to what is a fivefold increase in our projections for the statewide operations need between fiscal year 23-24 and 24-25.

And I also want to note, and I think this much is critical that the projected funding shortfalls that were presented in our survey do account for the changes to transit service that agencies implemented during the height of the pandemic and the factors and factors in the restoration of service that will be necessary to meet growing demand as that demand begins to return.

Now, while these shortfalls are without a doubt staggering, I also want to offer some broader context and here emphasize that we in California are not alone in facing these significant financial challenges. New York MTA, Chicago Transit Authority, SEPTA in Philadelphia and Womada in DC, some of the nation's historically most productive transit systems all face near term operations funding shortfalls.

And in fact, in a recent letter to USDOT Secretary Pete Buttigieg, these what we call legacy systems, joined by several California transit agencies, noted, and here I'll quote directly from the letter, the prospect of revenue deficits in the coming year may force our agencies to make drastic service cuts and lay off tens of thousands of workers. To avoid these draconian measures, we are discussing new revenue streams with our state and local leaders.

Now, the operations funding crisis is reaching a fever pitch nationwide and to that end, President Biden did reference it within his proposed fiscal year 24 federal budget and included some recommendations for how the states and how the Federal Government may approach this. Now I highlight this national picture to provide some balance in this conversation. I think as we go out, we meet with stakeholders, we meet with legislators.

Oftentimes there's this consideration that there's something exceptional about California transit agency that we've not recovered transit ridership, that we have these high costs. And again, as I'm attesting to, these are challenges that exist across the nation because of these larger external factors that are influencing our industry. Now, in my testimony for the Joint Hearing, I didn't focus much of our discussion on the additional support that we think the state should be in a position of providing this year.

And just to reiterate some of those points, we are calling on the Legislature and the Administration to provide short term but also multi year transit operations funding in this fiscal year 23-24 budget to address the immediate funding shortfalls faced by our agencies and to support the implementation of an array of ridership, retention and growth strategies.

Our near term state request is two pronged because we recognize that each transit agency has different needs, but also because we know that the Legislature and the public expect for us to adapt to overcome the factors like safety that are currently bedeviling our industry. Now, unfortunately, as I join you today, I'm not prepared to identify the various specific funding solutions we're asking the Legislature to consider.

But I do want to just note we are meeting on a weekly basis with a diverse cross section of our membership to try to arrive at what I've been describing as budget conscious recommendations by the end of this month. And here we are just recognizing the General Fund picture the reality that you may not be in a position to provide us with General Fund support. How can we get creative within existing funding pots to deliver the necessary flexibility, the necessary support to carry us forward?

And I'll note that within this context, our North Star is political viability. Recognizing that we want to turn over a proposal that has reception that can be something that is in fact implemented by the Legislature.

I also want to signal our interest in beginning a discussion this year with the Legislature and the Administration on addressing the long term operations funding needs that we have as an industry, and driving our interest in this discussion are the following the reality that even with progressive improvements to our services, we may struggle with transit ridership for years to come, but also our experience that year over year increases in operations and capital costs are outpacing the funding streams that we have.

And then finally want to recognize that the state's push to eliminate the use of diesel fuel from all mobile sources, and we would argue that is a good thing, will unfortunately erode the state transit assistance program over time, which is largely reliant on sales tax on diesel fuel. So we need to be thinking ahead about how these two dynamics meet.

Now, we expect that for both of these discussions, whether they're the short or the long term, we as an industry will need to come to the table with recommendations for legislative, administrative and operational changes to ensure that we deliver a more efficient, equitable and ultimately more financially stable transit network.

And our commitment to this work is reflected in our recently adopted strategic plan for 23 to 2028 and demonstrated, I think, by our track record of sponsoring or supporting state legislation to accelerate, for example, the delivery of capital, capacity building, zero mission and transit prioritization projects, our focus on increasing transit efficiency, expanding fare free and discounted fare programs, and then, yes, addressing safety on our systems. Now I'm about to wrap up. I recognize I've gone probably well over time.

But here I want to just note that as I conclude this observation about state support, I also want to highlight that we are looking for certain operational improvements and there are certain recommendations that already come forward from my membership. Of course, an interest in increasing service levels that, of course, will require some additional funds. So we're improving transit frequency and ultimately the attractiveness, implementation of service restructuring, which I think has been a topic of discussion here.

We have seen agencies implement what we call comprehensive operational analyses that better align their services to where demand is today, and those systems generally find that their ridership has rebounded with a faster clip and then finally have a focus on implemented targeted fare free programs.

Now, with all that said, I do want to just respond to final theme in the staff report and here make clear that our industry does see a path forward in seeking additional self help as a complement to our work here at the state level. You all understand well that there are some practical challenges to self help, one of them being the vote threshold.

We have had agencies as recently as this last year went out to the ballot, didn't secure the necessary vote threshold, therefore don't have resources in hand to do that self help. And I'll comment here that one of the first formal actions he took as an Association for, I think the third or fourth time was to support Assembly Member Aguiar-Curry's ACA one, which would lower that vote threshold for capital projects.

The idea here is that we relieve some capital pressure, we provide some flexibility to use some of those monies for operations. And then finally, on the federal side, we're now just beginning to evaluate the President's budget proposal. But we would just observe that one of the core recommendations, which is to flex urbanized area transit capital funds to operations, would require an amendment to the authorizing statute.

I'm going to stop you and ask you to repeat that because I missed that.

Sure thing.

Real quick. Go back about 1 minute.

Yeah. And so here I was just acknowledging one, our support for self help. We're going to position ourselves again to lower that vote threshold. And then on the federal side, the President's budget does include a number of recommendations. One of them is to allow for agencies to flex the capital funds that they receive toward operations. Just note for you that that would require an amendment to statute in this divided Congress. That may be a high bar to meet. And so that concludes my remarks for today.

I know that we're going to have a robust discussion. Looking forward to that robust discussion. And again, just want to thank you for the opportunity to present and for going well over my time.

Thank you very much. And we appreciate you taking plenty of time because we need to pick your brain pretty well here. And we're going to start with assemblymember Ting.

Sorry, I have to run. So I'm going to ask some questions before the rest of the panel goes just to Mr. Pimintel. So a couple of things. The feds were the ones during COVID to do the operational bailout. Was there a reason why that was unsuccessful? And I got a number of questions. So if you could just be brief with your answers. Yeah.

So on the support that was provided by the feds, I would just note that that was successful in providing us with the support that we needed to keep services online. But what it didn't contemplate was that ridership would continue to be as Low as it is for as long as it is proven to be. And so it was intended as a short term Runway, give agencies ability to ride the wave, be able to see folks come back to the workplace, ride transit services again.

And that fundamental assumption has not materialized and made it challenging for us to continue to live on past that federal relief.

Great, thank you. And again, I'm a huge supporter of transit. I think that we have to do everything possible to ensure that all the agencies can continue to operate. I think the question is at what ridership level can they continue to operate? Transit ridership, unfortunately was on the decline even before COVID, so what I haven't heard, and I'll just say more from the Bay Area operators, is what does ridership look like over the next couple of years?

Because my concern is, even if we did do any kind of assistance, does that just push the cliff out a year or two years, or does it actually get them to where they are stabilized? The challenge with the request as has been presented is there hasn't been, again, you mentioned there's been no number you've presented, and there's no number presented that gets them to fiscal stability. So we've done this. I'll just say, for example, we've done this for hospitals.

We did it where we bailed a hospital out a year, two years, two years later, they just closed. So what did we gain from just keeping it open for those two years? My bigger concern is there's a huge amount of public investment in all of your agencies. So to see them not be able to operate would be fairly catastrophic. I think.

I would just note on this front that one of the features of the federal investment that was provided was, in essence, requirement that agencies demonstrate that they were maintaining their workforce and maintaining their service levels. And so I think there have been broader questions as to why didn't the agencies during the pandemic do more to really restructure their service?

To be clear, that would mean cutting what could be tens of thousands of jobs in contrast to the requirements that were built into the receipt of those dollars. The feds did not decide to give transit agencies the relief funds with an eye of just supporting transit systems. It was a jobs program. And so I would just stipulate that if we move past that federal relief, we begin to talk about state relief. The agencies have a bit more discretion as to what flexible approaches they might pursue.

I don't want to suggest that the best and first option should be shedding of workforce. It is certainly the last option of option of last resort. But I think there will be difficult decisions that agencies are going to have to make in what additional runway they receive, potentially from the state to build into that long term sustainability.

I think the challenge is that you're asking us to make difficult decisions, and there haven't been difficult decisions made by the agencies. So you can't expect us to make difficult decisions if your agencies aren't willing to make them as well. In fact, going back to your point about self help, I'm not aware, at least in the Bay Area, maybe in other parts of the state, of any transit agency looking at 2024 revenue measure, how do you plan?

Even if we give you a little more one runway, how do you plan, and again, even if the revenue measure passes in 2024, you don't get the money the next day. It takes time to ramp it up, takes time to go collect it. So maybe you got a one or two year runway. So even if we can give you a little bit of runway, how do you plan on sustaining yourself?

Yeah. And that's where we see as part of this conversation the necessary flip side of funding, which is the reforms conversation around how do we make operational improvements. And we would imagine that, and we wouldn't expect that this would necessarily be a blank check, that there would be some form of clear direction from the Legislature on improvements that they would like to see in order for us to get into that more stable footing.

Now, I know that's not specifically answering your question about how do we have that guarantee, but I do know that we, as an industry, want to engage in that conversation about what types of reforms can be real. I mentioned, for example, that focus on comprehensive operational analyses that agencies have conducted and then implemented. For agencies that have done that, I'll take, for example, the San Mateo County Transit district.

They're at a ridership level of roughly 80% of their pre pandemic levels, and that is because they have restructured their service in a way where it now meets where the demand is. They may not have commuters anymore, but they may have other types of riders that can be brought into the fold. We see that as being part of the conversation.

So again, I know that I'm answering your question in a bit of a roundabout way, but that's the type of work that we'd like to conduct, but that will require some additional time in order for us to build into it.

Well, let me answer your question with a very specific answer, because I tend to work in specificity. If you come to us with a proposal to say, give us money and then tell us what to do, I will not support that proposal because that means you haven't done your work, you're not prepared to accept the money. You're not demonstrating that you have thought about what it's like to sustain your operations. And that would mean another conversation a year later for more money.

So I think you need to get to work. You mentioned you've been meeting weekly and I can't understand even after all the weekly meetings, because this has been a discussion for months now. This is not like this happened a few days ago. You and your operators need to come together with a plan, each of them, about how they're going to sustain their operations and what they need for help. The request for converting capital to operating doesn't work in our state because we have a Gan limit.

So because of our spending over the last two years, we were right up against our gan limit. And because of that, it's not easy for us to just say, hey, we're going to flip that switch. So I don't know that that's going to be a request that we could go with. So again, I think we need to see how are you all going to help yourselves? How are you going to ask your local communities to help?

San Mateo is not the best example because San Mateo, we worked very, very hard to get a local tax measure passed a couple years ago. So they're in a much different fiscal situation than all the operators, at least in my region. Right. So I think you asking for money just puts you in line with everyone else in the state. There's nothing unique about it.

If we're in sub one, those are much harder conversations because those are people without food, without health care, homeless families with disabilities who don't get care for their loved ones. So this is a very different. If you want to go compete with them, good luck. Right. So you better come together with a much more thought out plan how you're going to work and operate this and what you specific need for help. Just asking us and saying, hey, we need help. And we need money.

That's not a very successful strategy and it's not something that I could support.

Your comments are well taken, and it's certainly a message I'll take back to my membership in our continued conversations.

Well, hopefully they're watching.

Yes, based on something that chair Ting just said, which I think was absolutely spot on, by the way, and I share his feelings about this. What if we tagged state funding to ridership? If you don't increase your ridership, you don't get money. If you increase ridership, we fund it. I mean, funding based on population in this sense doesn't make much sense. We should be funding projects that actually serve the most number of people.

And we've seen some agencies put focus on increasing riderships, but it seems like it's very spotty across the state and there are other agencies that don't seem to be putting much focus on increasing ridership.

I think the challenge with that as an approach is that it ignores, in part, the reality that so much of what we have lost in transit ridership is not necessarily the result of operational decisions that the agencies have made. There are, for example, housing affordability issues that are pushing people out of urban centers into suburban and exurban parts of the state. Those are oftentimes now lost transit riders. There's commute challenges that we are faced with.

But then if your operators are just offering a service and deciding, okay, well, we're going to do a service and whoever comes, comes, we can't support that either. The fact that you're saying, zero, well, all these things are happening and it's not our operator's fault, well, then, I don't know, maybe we should fire all their management. Because then why do we need management then? Because they're supposed to be running something. They're supposed to be thinking about ridership.

They're supposed to be thinking about operations, why do we need any of them? They all get paid really well.

So my suggestion here is not to evade. What is the need for there to be a focus on ridership improvement? But you could see a ridership increase, but you could also then see ridership declines that are related to external factors. And it becomes-

I think your operators need to look within and then you need to come back.

Okay, thank you. Does DOF or LAO have any comments on this issue? Okay.

Okay, go it wherever you left it.

We don't have any direct comments to this informational item, but there are many options in front of the Legislature that each come with trade offs, whether that's looking within the General Fund that is available within transportation and providing additional flexibility, or whether that's providing additional flexibility within the state's current programs that support transit agencies. But all of those come with trade offs. No immediate recommendations at this point, but happy to work with the Committee and staff in ongoing conversations around this issue.

Great.

And Mark Tollefson, Undersecretary with CalSTA. I just wanted to say that this is an issue that we are tracking very closely. Happy to work with the Legislature on any potential solution.

Well, I really welcome that. We will need to work truly collaboratively, I think, across the state with all of the stakeholders from the governor's office, Legislature and the transit agencies and the local governments. Certainly, I think this is a long-term problem and it's a short-term problem and we should. That's one of my concerns is I don't want us to just look at a short-term fix that has no relation to the long-term issues out there.

It'd be much more intelligent for us to do that. And so I know Assemblymember Friedman has a question, but I have a number of questions for you after she finishes. Go ahead. Assembly Member.

This topic first. Well, thanks. So I do think that just to pick up, I do think that more of a focus needs to be put on increasing ridership and putting transit where the ridership is. It's certainly a chicken and an egg kind of problem, but we've seen some transit agencies focusing on that very thing and changing their service based on changing ridership needs, making their service more flexible. Ah, making sure that they address particular needs like the disabled community, women riders and their particular concerns.

Barriers that keep people out of transit, whether it's perception of safety, convenience, whether transit servicing young people who don't drive, that sort of thing, and then others continue to operate the same fixed routes they've always operate. The question of what kind of transit works in different areas with that changing population, is it bus rapid transit? Is it more light rail? What just sounds good and what actually gives us the increased ridership.

And I do think that it may be prudent to fix, to try to connect funding to ridership at this point and to make sure that our agencies also have a real plan when they come to us and that they're able to articulate how whatever funding they're proposing or they're going to be using directly connects to ridership is very important. I think transit is really crucial because you were talking about those people moving further into the suburbs because of housing.

That's also a function of the failure of transit in our urban areas to service our population. One of the reasons that people are moving away is because the reluctance to build housing in an urban setting often comes back to the lack of transit and communities feeling that if they add more residents or more housing for residents, that it'll increase congestion and parking issues in their own communities. And so there's an ignoring of the congestion toll taken by commuters, particularly the longer distance commuters.

But that's also because they don't see realistic and convenient transit for those same residents within their communities. So it becomes this really vicious circle of people not wanting to add housing because of the congestion impacts and then people moving further away, which just increases congestion, increases vehicle miles traveled, and certainly increases misery for everybody involved. So it's those focus on what actually works to give people mobility options in the urban setting that's going to prevent that kind of sprawl.

And I do think that agencies are looking at that and I see LA Metro trying to do more with bus rapid transit and other things and their micro mobility programs. But this is really what has to be the focus with real metrics of what's working and what's not working. And I do think that the Legislature needs to hear from the agencies about barriers to deploying that kind of transit and what we need to do.

But reevaluating whether some of the fixed rail, for instance, is really the best use of money.

Is that bringing the riders in, or is it more of the urban mobility and understanding through really rigorous data where our investments are going and what dividends they're paying off and also allowing for your riders to dictate even simple things that I've seen other agencies do in other states, and I don't think I've ever seen it in California, like after 09:00 allowing riders to be picked up anywhere along a bus route and dropped off anywhere along a bus route, whether or not there's a bus stop.

There's a Bill by Isaac Bryan about street, about furniture and amenities for bus stops. And I know that it's expensive and difficult, but people aren't going to take transit if they have to stand in the sun or if there's no place for an elderly person to sit. How are we getting people to those bus stops if the sidewalks are broken or don't exist? I mean, there's a lot of things that fit into the system that become real barriers.

And what we're left with, certainly in Los Angeles, is a system that can take two to four times longer than driving. Who would do that? If you have any other option? So we have to look at the totality of those systems if we're really going to get ridership on, and we need our cities and our MPOs to cooperate, they need to put funding into supporting transit. It's not just the agencies themselves, it's how are cities designing around their bus stops and around their trains?

What's the role of cars in these areas? And I've done work on removing cars from transit areas, but if we're going to have transit corridors that support more housing, it all needs to work together. So I think that this is incredibly important for housing, for equity, for climate.

I do think it deserves the budget that you're asking for, but I don't yet see the coordination in terms of actually getting people into the system and reimagining the system so that it works really in concert with all of those other things with the equity piece, then why no such a little focus on how do you get a handicap person even to those stops? And how do you have an elderly person? You can have them sit on the ground at a bus stop.

I don't see it all kind of always working together as well as it should. And it's not all your issue. I think we've kneecapped our agencies because we're expecting you to operate from fairbox retrieval. We don't support you in a really rigorous way like we should. We're supporting electric cars which feed into all of our problems in some ways. I mean, it's important, but just getting more cars out there is not going to help with all of these issues.

And yet we think nothing of putting a ton of money into that. But putting that kind of money into transit, I think, becomes more difficult. But we've kneecapped our agencies because we don't always think about other ways to bring money into the system. And we all know that in other countries, for instance, development around stations and commercial development powers their system and funds their systems. But we don't encourage you or allow you in some cases to do that.

And we need to hear from the agencies and have them think about how are we going to build stations that generate revenue to put into the system? How do we make you sustaining? Because I agree with Chair Ting that this can't be, we give you money this year, you come back and ask for money and we give you money next year, the system limps along. How do we put you on a real path to sustainability going into the future? That's beyond fair box, beyond sales tax.

Can you become a revenue generator? And I'd like to see a lot more thought go into that. How can we leverage the private sector, private capital for public private partnerships to support all of this? So we're obviously not going to answer that here. We're probably not going to even answer it this year. But we should start thinking about what do we need to do legislatively to remove barriers.

And I've heard from some, from the MPOs, but I have yet to see a transit agency really come in and say, hey, if you could change this, this and this, we could now bring commercial development into our transit stations and we could generate revenue. We need to hear more of that in terms of the section about homelessness and servicing homelessness. I actually don't want to be giving our transit agencies a lot of money to deal with unhoused riders in their system.

I don't want to stand up all new homelessness agencies within the confines of LA Metro and BART. We have homeless providers in our urban centers. They are not servicing transit right now. So I'm doing legislation this year to compel them to go and service transit. It's a start, but we need to coordinate those efforts. It shouldn't be your job to start a whole homelessness agency under the umbrella of transit agencies, and I don't want to see budget items to do that.

We should be giving that money to our homeless providers who actually have the manpower and the expertise to do that and then get you guys to work together so that they're on your system without worrying about liability or access or anything else. Do what you need to do to foster those cooperations.

But I don't think we should be spending money to stand up entirely new homeless providers under the umbrella of agencies that know how to run buses, run trains, but not necessarily offer help to someone in their service within their system. I do have one question just about the TDA law that allows localities to divert local transportation funds that are used for transit to street and roads if there's an unmet transit need.

And I think that's under this section, and I wonder how that's defined and how that money gets used. I'm just a little worried that that's a way of taking money out of transit systems just to go to kind of to roads again.

Yeah. So if I may, just before I touch on that specific question, I do want to just acknowledge that we are looking forward to engaging with you on the transit transformation task force concept. I want to just relay that from my membership. There's a strong interest in seeing if we can have that type of frank conversation about the laws and regulations that often impede transit success. And one of the firm recommendations that we've offered your staff already.

And I think we would like to have a follow up conversation with you directly on this, is the idea of having a greater focus on convening the CEOs and General managers of transit agencies across the state for what would be an unfettered conversation, separate from that broader conversation with academics, transit advocacy organizations, labor organizations, et cetera. Because, as you can imagine, some of the topics that we're going to bring are going to have some impacts on some of those other interests.

Why do you need us to just. I'm just curious, why would you need us to convene that? Can't you all do that yourself?

I would say that we have convened that and we routinely provide advice through the sponsored Bill packages that we pursue. And just to reflect on some of the things that I would acknowledge are fairly substantial. The work that we've done over these past few years, working with Senator Scott Winter to wholly revamp CEQA, to focus on transit prioritization, that is something that was for a long time a holy grail of focus for transit agencies. That was work that we did to ideate and pursue that.

The idea of focusing on forward facing cameras and clearing transit only lanes and making sure that they're efficient, that was met with some strong opposition by the folks in public safety, but we were able to overcome it and deliver that type of success. And so I would just reflect in our legislative program on an annual basis we are doing this type of work.

But what we're suggesting here is that there is only so much capacity that we have as an industry, as an Association to put forward Bill ideas in a given year. As I do a call for proposals, I probably get a dozen proposals. We can maybe move forward with three or four in a year, but we can have a candid conversation with the Legislature, and if any Member wants to take up those proposals and make it an author sponsored proposal, we would endorse that.

And so I think there are a variety of things that we can pursue on this front, but also just wanted to reflect that within that conversation. There's just a few things that come to mind already. I mean, local control, we talked about housing. Local control is something that has impeded that affordable housing development.

And while I appreciate that transit needs to be more robust to attract housing, there is a reality that if you've got Nimbus interests that are opposed to transit generally or opposed to Low income folks living in their neighborhoods generally, the focus on transit is perhaps more of a secondary or tertiary consideration in that conversation, as opposed to the primary. And so in any case, I just want to signal our interest to continue to make progress on that front.

To your question on TDA, under the current structure, you're right, there is an ability to consider whether or not there are any unmet transit needs that cannot be reasonably met. If jurisdiction finds that there are no unmet transit needs that can be reasonably met, they can use those monies for streets and roads. We've had conversations the past on whether or not we would look to reconsider that as a policy at that point in time, the answer was generally no.

And I think the reality is that it's a difficult conversation to have here in Sacramento for all the interests that are reflected in those conversations. But certainly as the Legislature moves forward, we think it is certainly the Prague of them to consider what is the valid approach for funding transportation more generally, whether it's local streets and roads or public transit. That's not me endorsing a change in policy, but just reflecting that. It's a conversation that seems germane.

Well, thank you. And I definitely appreciate the work that you've all done on removing those barriers to making transit operate. Well, I'm on your side with all of this.

I guess I'm thinking more specifically about the financial side of how we reimagine the way that we can fund transit, especially if we're really going to consider free transit in the future and if the agencies are going to consider that, and I would always be happy to try to convene whatever discussion you think would be helpful, but it would be good to find.

So you've done a great job at removing those barriers, like you said, for getting bus rapid transit deployed on having cameras so you can get all those cars from parking in the bus lanes. Everything else. I think what I would like to hear, or have you think about going into the future is how can we get more revenue into the system that's beyond fairback.

Box if you were to reimagine what stations look like, if you were to reimagine how transit interacts with communities, what would it be and how can we help? Totally agree with you about local control. And I live in a community. I represent a community that's been fighting a bus rapid transit project now for like three years. So I totally understand how frustrating a lot of these conversations can be.

And I would support efforts to try to find a way to make it easier and remove a lot of those barriers as we go, and I always have when going into the local communities. But unless we think that we're going to see a dramatic change in ridership, we're going to have to start thinking about other ways of funding our systems. As you see, we can't have this conversation every couple of years or we can't have it every time there's an economic downturn.

We have to figure out how to make transit financially healthy and also essential, even more essential to everybody. And I know that that's what your job is and I know that's what you all work on. I'm here to help. I know Chair Ting is here to help. We are passionate about this because we are just as frustrated as you to see the fiscal cliff looming. We know how important it is.

So I think that there's a lot of your agencies and you who are thinking out of the box. I guess I'm asking all of them to think if the state's not going to be there, who's going to be there to help make this real? And then what do we need to do to support that? Because I am not a transportation expert. I don't do this for a living. Every single day you guys do.

So we are going to keep relying on you to bring us those ideas.

Yeah, and I appreciate that. And just to maybe just reflect on the general sentiment, of course, we see the work that you've done in your tenure here in the Legislature. Appreciate all the work, the focus on public transit, and would just emphasize that I made a vague allusion to a strategic plan that we just adopted. To be clear, that focus of that strategic plan has top priorities. How do we build into sustainable funding? How do we build into a network that is safer, more efficient?

And we have broken down that work into a series of task forces and subcommittees to develop recommendations. And those are things. Some of them are going to be operational, things that we can distribute amongst our membership as things like best practices. Some of them are going to be legislative and regulatory. And for those that may be sponsored legislation that we're looking to pursue and see if we can find some reception here in the Legislature so we can make some continued progress.

But I just want to thank you for your continued steadfast support for the industry.

I appreciate Assembly Member Friedman's eloquence on many of the issues I was going to bring up. So you've saved me some of that time. In terms of that, I want to make sure that we pull it together. I think it's going to be really easy for us to pick a spot here, a spot there. We're going to work on this, work on that. And at this moment, I don't think that that's where we need to go. I think we have to begin the process.

We won't complete it this year, but we have to begin the process of the true reimagining of transit. What are the transit options out there? The true options out there, and that means even looking at how the agencies are pulled together, et cetera. If we want to look at reimagining revenue and we want to look at reimagining delivery of service, everything has to be on the table. That's not going to be easy to do for people that are necessarily in an agency to be that open.

But what I want us to fight is just the urge to come up with a quick solution that doesn't include that. And so I really appreciate you being here and I really appreciate the agency's sort of commitment to trying to solve this problem. And I appreciate sort of the collaboration that we're trying to establish. That Assembly Member Friedman was referring to and Assembly Member Ting, et cetera.

I think one of the real challenges is to try to bring, when you have disparate in a democracy, you have dispersed power. And the problem with dispersed power is it's hard to get it all coordinated when you have to do hard things. We have hard things that we have to do. I think you've identified just even some of the problems that are out there.

We have to try to get everybody on that same page, and we will use more than this hearing to be able to make that happen. So I would like to ask for a couple of things here at the beginning. And one is we need a list of all of the things that are challenges that we should consider. And the reason for that is you just pointed out diesel funding. Right.

As we're going to ramp down diesel revenue because we're going to ramp down the use of diesel. That's been a funding source. So if you could help us.

I will be tasking LAO, quite frankly, at the end of this, who is the agency that the Assembly asked to do this, to compile this list, but we'd like to have your help. We'd like to have the administration's expert advice on this also. But I want to task the LAO what are all the issues that need to be considered in terms of reimagining revenue? What are all the issues to be considered in terms of options and solutions, creative solutions for delivery of service?

What are all the issues in terms of maintaining flexibility as we go forward?

And we need that so that a year from now we can say, well, we've addressed this part, but we still have these issues coming up so that we don't just take this potshot sort of approach in that I would like to make sure that we raise the question, and that is if, in fact, transit agencies representing local governments essentially are coming to the state and asking for General Fund Dollars, right, at a time when we have declining General Fund Dollars and at a time when we recognize, and we've always recognized we have such variability in our General Fund revenue that we've always tried to focus on one time monies, money for projects versus operation and maintenance.

And that, as LAO pointed, healthy, we can have healthy budgeting when we have steady funding streams. General Fund has generally not been that healthy, steady funding stream. But if local governments through the transit agencies are asking us to do that, what are local governments doing from a General Fund standpoint to support operation and maintenance? And what should their role be in terms of operation and maintenance from a General Fund standpoint, I'm sure that's a really easy issue and you'll get a quick, nobody will complain about.

But transit is very much a fundamental part of local government's delivery of services to their people and I think it's a fair question for us to ask in terms of that as we try to pull together all of these reimagining of the options. So one question I have is, do you know at this point in time to what extent local governments are using general funds to support transit in general? I don't think it's a significant amount, but maybe I'm wrong.

Yes, I don't want to speak totally out of turn and without full visibility into what the local governments are doing, but just want to reflect on the fact that for many the agencies in the state, they are established via statute of special districts and so they don't have that direct, necessary tie with the local governments. And I would suggest that for those special districts the answer is probably very likely that they're receiving little to no support from their local governments.

For those that are outfits of municipalities, say San Francisco, MTA, LADOT, I know for a fact that SFMTA within the county structure has engaged in conversations about additional support. Understand that there's going to be some commitment for some additional support, recognizing the needs that the agency has, but know that SFMTA's challenges are still fairly significant. But beyond that, without venturing into conjecture, would probably defer to a later time to provide you with a response to that.

But that's certainly something we may be able to pull together. The list of agencies that are municipally operated is fairly defined. We may be able to get some clear read on what their support has looked like.

Same thing with the question about to what extent is transit funding being used for roads because people have not identified transit needs. We obviously statewide have a huge transit need for operation and maintenance and to turn around and say, well, some of those transit dollars are going for roads and road improvements because in that particular area they don't have it when we statewide have this challenge out there.

So quite a bit and we could go on for a long time about all the options, but I will be at the end of the hearing reinforcing my request for LAO, and I'd like to ask you to work with the Transit Association to the extent that you can work with the Governor's Office also and with the Senate. But I would like us to have options, advantages and disadvantages. Those options, issues and options and advantages and disadvantages of those.

That is almost a document that we can put out to the whole public and say, okay, how can we improve on this document? What else does need to be considered? I think that's the only way we're going to get the real creativity that we need to come up with short term solutions that flow into a better long term solution as we go forward. Thank you very much for that. Do we have any other comments by any of the stakeholders here? Any other questions by Members?

Okay, great. Mr. Assembly Member, Con.

Yeah, thank you, Chair, and really appreciate the discussion this morning. So probably more comments, but there might be a question or two embedded within as well. And I'll just state up front, I am one of several legislators who wrote a letter as part of this process just flagging the importance of finding funding solutions to public transit. It's one of the two features of the proposed budget that are problematic to me.

One, and we talked about it last week in the Subcommitee, is around cuts to our ambitious climate planning that we're undertaking as a state. The second is around public transit, and as has been noted, systems around the state are facing a fiscal cliff right now. At the same time, I think the message you're hearing clearly today is, and it is unprecedented for the state to even be contemplating playing a role around operations and maintenance.

I'll talk about why I think that is appropriate right now, but at the same time, the fact is that transit needs to undergo a transformation. Right now, things are not going to be business as usual. We're seeing that now.

I think there are a number of reasons outside the control of local transit agencies that are bringing us to the point we're at, whether you look at it both short term and long term, the drying up of substantial federal relief money that's happening right now, issues relating to ridership, and we're going to keep coming back to that, whether it's directly tied to funding or certainly at a minimum is a key factor in our evaluation of funding. We're seeing some bright spots.

I mean, one thing I'll say locally, and I represent a couple of counties in the Bay Area, is a lot of people still are using transit. Transit dependent riders, seniors, students, those who don't necessarily have any other options.

It's no surprise that in the Bay Area, the agency that is actually leading the way in ridership recovery is Marin Transit, a local agency, and it's not that unusual with other local agencies where ridership didn't drop off that much at all during the COVID crisis and is actually recovering fairly quickly. On the other hand, you have systems that are relying on commuters that have taken a substantial hit. And the question is, is that ridership coming back?

I tend to believe yes, but it's going to have to be intentional. You are seeing congestion back on our roadways now, almost up to pre-pandemic levels, if not getting to that point already. But folks are still staying away. Some are working at home more. They're shifting patterns in where people are living and where people are working. Those have to all be taken into account. But the agencies that are doing what they need to do are being intentional around how do you get that ridership back?

One concept that I know the Legislature has been looking at, and certainly regionally has been explored around the state, is seamless mobility in the Bay Area through MTC, which I served on before getting elected to the Legislature. There's the transit transformation action plan that calls out several strategies, including fair integration, how can we make fare systems around a region dovetail more seamlessly wayfinding and better customer information accessibility improvements and creating a transit network to ease ridership. BART is on its knees in many ways.

That's the canary in the coal mine right now. But that's not the only system, Golden Gate Transit in my district, which relies on more discretionary ridership commuters that is still hurting at this point. So I agree with my colleagues. I think local agencies have to step up. We have to keep looking at ways of not just improving ridership, but also other sources of revenue potentially thinking creatively around our systems. And I think otherwise it's going to be a tough sell.

So I think bottom line is we're recognizing that there's an ongoing need for transit that exists now. I believe there's a pathway forward for more discretionary ridership systems to increase ridership, but it's going to have to be intentional. We have to keep in mind that public transit is a key component of our climate solutions as well. So that's something I have in mind also. So I think that's a long winded way of asking a couple of questions.

How are transit agencies continuing to work to build ridership? How will that continue? What steps are agencies taking to address the fiscal cliff, especially mid and longer term, beyond this immediate 1, 2, 3 year time frame and crisis that we're now facing? And then, of course, in a measurable way, how does it interrelate with our ambitious climate change goals as a state as well? And again, we talked about that last week also. So I think things are being done out there.

And I think again, as congestion returns, there will be an ongoing market for public transit for all the reasons that have been stated. But we are going to be looking at, particularly if we take the step of General Fund monies toward operations and maintenance, to be looking at measurable ways that the systems are improved and reimagined.

Thank you very much, Assembly Member Conley. And I'm going to take it to your questions. I'm going to take them as rhetorical right now because we're looking for the answers and we've asked them multiple times. But go ahead.

Would want to just acknowledge a few things. And I think too, the final point that you made with regards to what are our agencies doing to increase or retain riders? One of the things that our survey did ask for was please identify strategies your agency is pursuing to increase and retain ridership. We have a cascading chart of the various strategies that agencies have pursued.

I'll note that the most popular option that folks could pursue, and they could select a few, were the pursuit of integration or coordination with nearby agencies. You see that of course, in the Bay Area, similar conversations are happening in Southern California, the increases in service levels, which again, we've got to talk about headways and frequency of service as a way of having a very material impact on am I going to wait for that bus for another 30 minutes or another five minutes?

That presentation really matters to whether or not someone rides public transit. They are implementing real time information through GTFs, which means as I look on my phone, I can see that that bus is coming in 51015 or 30 minutes. Make a decision as to whether or not I'm going to ride. And then also a few other popular options implementing contactless fare payment systems. Some of them are being used through mobile apps.

Apple, for example, allows you to add a tap card in LA, add a Clipper card. In the Bay Area, agencies like Monterey Salinas Transit are allowing you to use a credit card in your wallet to simply tap onto their bus and ride their system. And then finally, that implementation of service analysis and restructuring. What I've been referring to as a comprehensive operational analysis are the types of things that agencies are pursuing. But I also want to just reflect on just this concept of seamlessness.

Without a doubt, having a more integrated, connected network, making wayfind consistent, making fair payment systems consistent are going to be an advantage to public transit. But I also want to highlight that it is by no means a panacea to the crisis that we are faced with. In advance of this hearing, I pulled the ridership numbers from other agencies that you would argue, anyone would argue have seamless systems like New York MTA, their ridership level is currently at 83% of their pre pandemic level.

Chicago Transit Authority is at 64% of pre pandemic levels. Wamada is at 60% of pre pandemic levels. All of those systems have one unified network for the entire region that they serve. And yet they compare fairly favorably in terms of ridership growth to Le Metro at 74%, SFMTA at 73%.

And so again, just want to suggest that what we're seeing on a national level, while reforms are necessary and things that we want to lean into, want to recognize that it is reflective of broader exogenous factors that are limiting the uptake of public transit. If you're not going into the office five days a week, you're going in two days a week, you're taking perhaps four collective trips as opposed to 10. And that much is something that does undergird what is a challenge in the transition.

The final point I want to make here is that there's a lot of focus on transformation. Transformation can mean a number of things. One is changes to the systems themselves. But one of the areas where we have really been driven to transform ourselves has been on the vehicle technologies that we're using.

And so I do want to just reflect, while we support carbon, its regulations, to transition us to cleaner technologies, I would be remiss in also not noting that that transition is going to cost potentially tens of billions of dollars. And for those investments and the staff time and resources that those transitions take, that is moving the agency's eyes off of operational improvements and onto cleaner vehicle technologies. Just to give you a reflection of what that means, a bus today, CNG costs about 500 and $600,000.

A zero emission bus, about $1.0 million plus. And so that is additional capital resources. Staff needs to learn how to operate those technologies they have to build in transition plans, et cetera. That is time and resources. Not to suggest that our support for that has weakened that transition, but just want to reflect. Those are the types of complicating factors and complicating charters that make it hard for we as an industry to be focused squarely on ridership.

And just want to make sure that I'm reflecting that in that conversation.

And $1.0 million bus that does not have very much ridership on it is very hard to justify as an investment even a $500,000 bus at the same time. All of this, I think, speaks to the point that I want to end with, which is the creativity should know no limits at this point in time, in terms of where we're going to go.

When you talk about the nationwide changes that have happened, the only way we can come up with a long term sustainable transit system and revenue is we have to be creative about how do we maintain that flexibility to adjust. And flexibility should be very broadly interpreted as we're looking at it. So thank you very much.

We will be leaving this open and I will reiterate the request of this Committee for LAO to really come up with a specific set of issues, options that they have collaborated with the Administration and with the transit providers to let us sort of corral this issue as best we can as we move forward. And we will try to do this as publicly as possible so that we get as much as we can from all the stakeholders. So thank you, Members. I really appreciate it.

This took some time, but it's an issue that justifies a significant amount of time and pass our appreciation back to the agencies that you represent that have already come together and started working on this. And I'm sure they've sort of felt like they were doing it in isolation, but that isolation hopefully will be decreasing at this point in time as we all become partners in trying to solve this.

Thank you for the opportunity.

Great. Thank you. And thanks to the Administration for being here. And, LAO, I do want to go back to vote only so that we can add Members wishing to add on, and that would be to all of the vote only items except item three. Could we call the roll, please?

Roll Call

All right. We will now move on to item three and ask the folks to.

Okay, thank you. Steven Keck, Chief Financial Officer for the California Department of Transportation, presenting item number three, pulled from the vote only agenda. This is a request for a one permanent position for $1.7 million for traffic operations to reconfigure up to 6000 traffic signals for a leading pedestrian interval. And a leading pedestrian interval is an interval where a signal will wait three to 7 seconds after giving the go ahead walk signs before it gives the green light to a vehicle traveling in the same direction.

Please go ahead.

And that really increases safety for the pedestrian as it establishes their right of way in the crosswalk. This reconfiguration of our signals is required by Assembly Bill 2264 it which requires us to update these signals with this leading pedestrian interval in certain areas with very high concentrations of pedestrians or bicyclists. So that is basically a summary of our request.

Thank you very much. Members. Any questions or comments? Okay, great. LAO.

Thank you. Senate Member. We would just like to note for this proposal, the Administration has proposed a budget augmentation that ties to the original physical assessment when the Bill was making its way through the policy process within the proposal. There's an alternative to that would better align actions with what was intention in the bill.

The reason for the discrepancy, as we understand it, is that at the time that the analysis was done, it was CalTrans understanding that they would have to update these signals anytime that the signals needed to be replaced. But the Bill actually requires CalTrans to make these adjustments anytime they do any work on the signal. So the signals would need to be changed at a much faster rate. So the second alternative within their proposal better aligns with the intent of the Bill.

Great. Thank you very much. Any Member comments or questions? All right, so we will take a entertain a motion on this item. We're recommending that we hold the item open, actually.

All right.

Give staff more time with this item. Thank you very much. All right, now we will go to item. So now we go to item three, which is resources for homelessness in the state. Right away.

Thank you Assembly Member. Stephen Keck, again with CalTrans. So this item includes two of our budget change proposals, and I'll briefly describe each one. The first is a request for a three year, limited term General Fund increase of $5.8 million for 30 positions and seven positions for two limited term years to support our efforts in addressing homelessness within the state highway system.

This includes our encampment coordinators, which are very highly specialized positions that act as conduits between the persons experiencing homelessness, the communities in which they shelter, and between Caltrans and the local agencies who provide services to their citizens. The second of the two proposals is a request for a two year, limited term increase of $20.6 million from the state highway account to fund the removal of hazardous material from encampment statewide.

These resources allow for us to come in after we have cleared an encampment to make that area safe for the traveling public, whether they're pedestrians, bicyclists, motorists. We need to ensure that that right away is safe for them. So oftentimes we need to utilize a hazardous waste removal contract to safely remove, transport and. Thank you. Dispose. That's the word I couldn't think of. And dispose of the hazardous waste. So those two combined, they're related, but they're independent as well.

Anybody else from Administration side?

Nothing to add?

Great LAO?

Yes, we have no concern with this proposal. As the Administration mentioned, that these are largely continuations of previous augmentations and individuals experiencing homelessness on the state right away is an issue that Caltrans finds itself more involved in, then these augmentations seem reasonable.

A couple of quick questions. I'm going to try to move this hearing along. We've been at this some time, but how does CalTrans work with the local agencies on the continuum of care when the people clear the encampment, and then how much notice are local governments given when an encampment in the state right away is being moved?

Yeah, certainly. So the whole role of these coordinators is to address the needs of the persons experiencing homelessness by getting the local agencies involved. So to answer your second question, first, when we can, we offer a two week notice to our local agencies and also to the persons experiencing homelessness. Two week notice prior to posting the required 48 hours to vacate. Posting before we do the cleanup. To answer the first question.

Second, we communicate with them to coordinate site visits with the local agencies providing services to the site we intend to clean up two weeks in advance if we can. We schedule CHP and maintenance staff to escort social services folks to the site as well. We notify and coordinate with our partners in the local social services continuum of care and any other local agencies, including sometimes local police, fire, and other areas that need to be involved.

So that's really the role that we're taking on, is to coordinate these services so that when we do need to remove these persons experiencing homelessness, that they have those services available to them.

An issue that we have wrestled with 20 years as a county supervisor is we clear an area, we deal with the whole issue of the waste and trying to get people located, et cetera. And then six months later, we have the same problem again. What is CalTrans policy after they clear an area to try to keep the area clear?

Yeah, that's a very good question, and we see the same thing. So first, the whole role of these coordinators is to try to prevent that from happening. Right. So that we can get folks into some sort of housing. But secondly, we do sometimes enhance patrols and especially a very popular site. We will have CHP do enhance patrols.

Our own folks will go out there, and these coordinators may make contact with a campsite that they see beginning to crop back up again and say, hey, there's these other services available. And that kind of contact is how we deal with that. But ultimately, we need all these services to do their part as well. So our role is the safety of the state highway system, and really, these coordinators help us to get those services in place.

But beyond that, yeah, it's a problem we deal with as well.

Because you can do a great job with the people that are there, new people that then start to be there. And our experience has been, if you don't get on it right away, once the encampment gets built up, it's much more difficult for you to do the clearing where it is that you have decided to do that. And it brings up the whole fundamental question of what's the state's role once people are moved and once those encampments come and stuff.

And if we had an easy solution to this, we would all be jumping on it at this point in time. Members, any other comments or. Go ahead, Assembly Member Rivas.

Thank you, Mr. Chair. I appreciate the effort that CalTrans does to ensure that unhoused individuals at homeless encampments on state right of way are offered the services and the necessary resources right before cleanup and repairs are conducted on the state property. But I have concerns that our state is spending hundreds of millions of dollars to conduct these cleanups, yet we continue to see encampments return to these same sites often.

I see it all the time in my district, on my freeway exit to my home, and this is something that my district office works on. The majority of the services that we provide in my district office is contacting CalTrans, district seven, because we get so many calls from constituents. This is probably the number one issue in my district in terms of the number of calls that we receive.

And as legislators, we are currently focused on the funding that goes out to local governments and putting in accountability measures for the funds that we provide local governments to work on homelessness. But I'm concerned that do we have these same accountability measures within our systems, within our transit agencies and CalTrans, because are we being effective with these state dollars? Right. Because we do clean up the encampment and then it comes back. Right. Are there ways that we can be more effective? Right.

And I know that some of it relies on other service providers that your encampment coordinators work with. But if, as the state, we're going to be hard and put in more accountability measures to our counties and our cities and our continuums of care, I think we need to look at our own, the services that we're providing, whether they're effective or not. I also believe that there was a CHP encampment patrol program that would patrol these encampments after it's been clean.

However, I hear that CHP is no longer patrolling these sites because the funding for this pilot program ran out. So one of my questions is, can we direct some of these beautification funds to the encampment patrol program? And also, what are we doing to assure that our current process with the encampment coordinators and cleaning out these encampments is effective?

Thank you for the question. And for part of that, I'll defer to my colleague. First, I want to say these are not beautification funds, not to be confused with the clean California efforts that are also going on. This is focused just on clearing encampments that are a danger to public safety. That is our duty to perform. And really, you hit the main issue right on the head. Our responsibility is the safety of the highway system.

Outside of our control are the entire issue of persons experiencing homelessness. They need a place to go, and the best way that we can handle that is to provide this coordination with local agencies who are receiving funding to provide alternate housing. With regard to the CHP question, I'll defer to my colleague.

Thank you for the question. Keith Duncan CalTrans Chief Budget Officer. We are engaging with CHP in relation to that continuation of the pilot. We do have existing funds where CHP does provide patrol for safety, for highway, as well as our construction workers. But we are continuing to have discussions with them to see what we need to be able to do to continue with that pilot and those continued follow up visits to those sites.

Is it a funding issue? That's what I was told, that we need more funding to continue that pilot program.

Part of it is trying to figure out, is it truly a funding issue as these programs? Because this is just as part of our homelessness encampment coordinator effort. This is just, we're two years into this program, continuing to evolve, continuing to learn, and that's part of also working with CHP and our other partners, and that's part of also working to expand whether it's a policy related item or if it is just a funding relation.

So we are looking into that, and once we find that the solution out would definitely be coming back to the legislature. If it is a need for additional resources, we would put together a proposal and bring that to the legislature.

And how are we measuring the effectiveness of this? What metrics have you put in place, or do you plan to?

Yeah, that's another very good question. So at this point, especially two years into this, as was mentioned, we are more qualitative than quantitative, if you will.

More qualitative?

Qualitative.

Right. So what we're seeing out there is a greater acceptance to our presence. We're seeing much greater coordination with our local agencies. For example, in the latest round of California Interagency Council on Homelessness, the latest round of grant funding saw huge increases. So as we're getting out there and educating local agencies what they can do and what resources are available, we're seeing much greater interest on the local side in working with us. We've had some really great successes.

The Wood street encampment in Oakland is one where there's a huge encampment, over 200 individuals. We worked very well with the City of Oakland and the County of Alameda. We were able to clear out that encampment of more than 200 individuals living there, 4000 cubic yards of trash and debris, more than 400 derelict vehicles were removed.

And to answer another part of your question, we also, after clearing the encampment, installed more than 4000ft linear feet of mitigation measures to help prevent this, fencing things off, putting up barriers to access, to try to keep this particular site from coming back in the future.

We're also looking to get information from our partners who perform services for the homeless about the number of site visits that they're making, like who's coming out, the number of people that were offered services, who accepted those services, not who, but how many accepted those services, how many were offered shelter and who took up that offer. Those are metrics that we don't track. But we are now working with our local partners to consolidate that, to provide better answers to you and others.

That's great. The ultimate goal, right, is that these individuals are housed and not just removed from the state right of way. That's part of it. But we want them to be housed and stay housed.

And the reason I'm asking you these questions, because if we see the same people return after they've been removed, right from the right of way on some of these highways, and so we're just continuing to do that and spending millions of dollars in some cases, and seeing the person come right back to the same location often. And I know that Caltrans isn't a homeless provider, but we need to work better with our local homeless providers so that doesn't happen.

But I want to know how that is being identified, right? I mean, I can see it, right. zero, they're back. The same individual is back. And what is that feedback? How does that feedback get to the homeless provider, right. That they're back at the same location is this going to be a continuous cycle of spending of state dollars so that the individuals are back? And why isn't whatever service that was offered to that individual, why hasn't that worked? Right.

Yeah. So first part of your question. I absolutely agree. This request is limited term in the hopes that we eventually start to solve this problem. We don't need this level of investment. Secondly, our focus, again is clearing the encampments for safety reasons. We really need to rely on the local social services to do that identification. Hey, we gave you a contact two weeks ago. Why are you out here again? In particular, we don't keep data on who is removed. Right.

We don't feel that that is appropriate for CalTrans to do.

Who keeps that data? Who is tracking that? Is that locals?

Again, that would be our local partners who are offering these services. What we do, though, is we keep in constant contact with these local services so that when an encampment does crop up again, we're having that contact with the persons on site and with social services. Hey, this is happening again. And we go through this process, we can't force an outcome, but we can coordinate our efforts with the efforts of the local agencies.

I guess my overall concern is that our success is being defined as that we have removed the encampment off the right of way and not whether the individual is housed and will not return. I know that, like you said, you're not tracking that, but we need someone that is. That is in charge because we are spending too much state funds on this and not getting a successful result.

I'm going to add just a little bit. After working as a county supervisor, there is actually now a state mandated reporting system that the homeless providers enter everybody into. So the providers that CalTrans would be coordinating with are the ones that would know, hey, this is the same person that we had three weeks ago or whatever, just because they're trying to coordinate those services. The exact name of it, it's IHSS or some program like that that is out there.

I think the key, from our experience, I just want to emphasize, was the places that were successful had a regular patrol, and when the first encampment got there, they were on that first encampment because it's, once it's built up. And so if you have identified a place that is, for safety reasons, needs to be cleared, which is what you're referring to, then you have the responsibility to make sure you patrol it often enough that when that first encampment gets there, you get them alerted right away.

So you don't then attract everybody else. That's been the only successful solution that I have seen. I know. Assembly Member Friedman wants to make a comment.

My comments. As a Member of this budget Subcommitee, our responsibility is the effectiveness of the State Dollars that go towards your program. I do expect us to track these dollars on whether they're effective. Right. And not just track the X number of homeless encampments have been cleared without knowing whether they're back. Right. So I don't count that as being effective. And I know it's challenging, but we are approving these homeless encampment cleanup dollars. And from where I sit, that's what I'm looking at for you.

Thank you, Assembly Member. Assembly Member Friedman.

Thank you.

Sure. Just a comment. I don't think that it should be CalTran's job to be offering homeless services or tracking individuals, but I do think it is your job to coordinate very efficiently with local homelessness providers. And I think it's gotten better. But we have had in my office some experiences trying to help foster some of that coordination and communication between agencies, and not with unsophisticated small agencies, but with City of Los Angeles.

We spent quite a while trying to help City of LA get an encampment cleared under a highway in the City of Los Angeles in Hollywood. And what was frustrating to LA were two things, and I'm just telling this to you for your information. One was that it seemed that both agencies were pointing fingers at each other as to who should pay.

The City of LA at that point felt that CalTrans was not blocking the area sufficiently, so it was sort of inviting people to come and they felt that CalTrans should make the investments to sort of physically wall off some of these areas and that they should be paying to have the encampment removed. I think CalTran's position was, as City of LA people, it's your problem. You should be paying. That was frustrating for us to navigate. That shouldn't happen.

This should all be understood and we should be working together. It's all taxpayer money. The residents don't care who's paying. They just want to know that it's not there anymore. And then secondly, City of LA felt like the actual clearing process was going to take too long and that they weren't being given sort of access and right of way permission. They were fine with going and clearing themselves, but because it may be of liability that CalTrans wasn't allowing them to enter the property.

So my point is not I have no dog in the hunt as to kind of who is right or wrong. It took us maybe nine months to try to negotiate this out, and I feel very strongly that, I know that the cooperation is spotty across the state, that some places seem to have it kind of together more than others.

We need to have a cohesive cooperation plan in place with every agency in the state so that this never has to reach my office or any Legislator's office. That residents don't get frustrated, that you don't have council Members telling residents, hey, that's CalTran's problem, or CalTrans telling residents, that's not our problem, it's a city's problem.

I feel that in many of our areas, and I only know Los Angeles, that between many agencies, whether it's CalTrans or Army Corps of Engineers or know Lhasa, homeless providers and others, there's a real lack of understanding with some of the, particularly the multi jurisdictional areas, who's the lead agency? Whose ultimate responsibility is whether it's Tujunga Wash. Where you've got three or four agencies, whether it's CalTrans, where you have two, or LA river, where you might have CalTrans and Army Corps and City of LA.

There's this very frustrating process where people literally move across the street where they feel it's the other agency's responsibility, and then it takes another nine months to get that dealt with. Sometimes where Lassa doesn't feel that they can or should be offering services because it's another agency or federal agency, residents don't care. They just want it dealt with.

So I think we all need to spend more time, hopefully kind of figuring out who's the lead and making sure that it doesn't take months and months and months to get things dealt with. And I do think that the issues that Assembly Member Rivas was bringing up about how do we make sure that we get people into comprehensive services so they don't end up back in that location again? That's another side of it that we definitely have to deal with.

But it seems like these are manifesting more on these sort of public infrastructure projects than in other places. Whether it's under highways or in riverbeds, we see a lot of these encampments growing. And whatever the agency's role is with the providers, we need to get all that in place. It can't be done on a spot by spot basis. We need a sort of a comprehensive plan of cooperation, and I'm happy to help.

I know Assemblymember Rivas, and she's the chair of the LA caucus, so she's really important in this space to help coordinate the, in fact, I would say Assemblymember Rivas is really your go-to for, for all of this coordination efforts. But I would just say I think it's getting better, but it just seems like there's a frustrating, sometimes bureaucratic lack of responsibility taking.

And we're going to go to our last comment by Assemblymember Rivas.

Thank you.

Last comment. Thank you, Assemblymember Friedman. I just wanted to be clear that I didn't want to suggest that CalTrans should be leading this effort, but as you can tell, as legislators, we're very frustrated because this is an important issue in our communities and we want to make sure that there is accountability and that you should have clear data on how these funds are being used. So thank you.

Thank you.

Thank you very much. Any final comments? Right. Thank you all. We're going to hold this item open. I don't believe we're going to have comments or questions on our other items. So we're going to go to issue four highway maintenance safety program, and if staff that is participating on this will approach. And, Mr. Keck, I think you're going to kick this off again.

Very good.

Briefly as you can. Great.

Absolutely. So on this one, CalT rans is requesting four year limited term funding of $48.4 million and 38 positions from our state highway account to continue and to expand our HM for safety pilot program. This program supports our goal of reaching zero fatalities and serious injuries on the state highway system by 2050. This is a continuation of our current pilot, and the Department is planning to learn more about the scalability of our pilot program, the impacts of adding safety scope to HM, sorry.

To highway maintenance work, and really looking more at the benefits of the first two years of the program because it will take us some time to gather safety data on those first two years. So again, an expanded pilot for four more years.

Great LAO?

No concerns with the proposal. As the Administration mentioned, it's an augmentation of a previous pilot, and we think it's reasonable to use the pilot to get out safety projects quicker.

Great. Unless I hear objections, we'll move on. Great. Our request is to hold this item open. Also, we're at item five, various positions for growth.

Mr. Keck, item five is three separate budget change proposals which I will very briefly go through. The first is a permanent increase of 23 and a half positions and $4.4 million for our Administration program. Really, this program hasn't seen a growth despite the entire Department growing quite a bit in the last few years. We haven't seen that on the Administration side. This is to provide services for human resources, especially for procurement and contracting in other areas where we're really starting to fall behind.

The second item is a request of nine permanent positions and $1.3 million for our external affairs efforts statewide. This will help us to address California public records requests as well as additional legislative analysis. And the third request is a permanent increase of 17 positions and $3.4 million from the state highway account for our legal program to address increased legal workload in the Central Valley, essentially establishing a new Central Valley legal office.

No concerns with the proposal. The augmentation seems reasonable given the workload.

Department of Finance?

James Moore, Department of Finance nothing to add. Happy to answer questions.

Thank you. Okay, any questions? Okay. There are none. The recommendation is to hold this item open. Next, issue six.

So the next item in our final item is a request for $1.3 million in eight permanent full time positions to implement the new transportation Wildlife connectivity remediation program created by Assembly Bill 2344. This Bill requires us to establish this program in consultation with the California Department of Fish and Wildlife for the purposes of increasing connectivity across our transportation systems for wildlife. I'll just end there.

Okay LAO?

No concerns with the proposal. The augmentation allowed the Administration to complete the activities under AB 2344.

Thank you. Department of Finance?

Nothing to add?

Thanks. The Committee will hold this item open, but the Subcommitee may wish to ask CalTrans to explain why they need eight positions, or like, do you want to comment?

Yeah, certainly. So I believe the question written in the agenda is why it was greater than was identified in our original analysis of the Bill. Our original analysis of the Bill indicated that we would need minor resources for this program. And I think what we have is on our part, we're talking about a program that is 11,000 full time equivalent positions. So when we said a minor increase, eight positions for, for us is a very minor increase for this workload.

We've been working in consultation with Fish and Wildlife on the amount of work that needs to be performed. We've got our workload analysis included with our BCP. Eight is definitely the right number and.

We recommend that we hold this item open and we now will go to item eight, capital outlay proposals. Thank you, gentlemen. Thank you, Assembly Member Rivas. Sorry, did I go to eight? I'm sorry, I meant to go to seven. My apologies. We wouldn't have had enough chairs up here for seven and eight panelists. All right, there we go.

Good afternoon, I'm Mitch Weiss, Executive Director of the California Transportation Commission. I'm here with my colleague, Paul Golazewski. I thought we're off the hook for a minute.

I recognize we're one of the things standing between you and lunch, so I'll do my best to be brief, although that's not my strong suit. This request is for 200,000 for per diem Advisory Committee Member compensation, and there's accompanying trailer Bill Language that would authorize us to make this compensation.

This need was recognized as we worked with Caltrans and the California State Transportation Agency in forming an equity Advisory Committee, and this funding would alleviate the burden for people serving on such a Committee and compensate Members for their expertise. The Committee will help us in equity issues related to transportation planning and programming. And this is similar to what's already in statute for the Air Resources Board, the Energy Commission, and the Public Utilities Commission.

LAO?

No concerns with the proposal. We find that it aligns with similar activities and statutory authority that other departments have.

All right, great. Thank you. Any questions? We're going to hold this item open. Thank you very much. And now item eight, cast of thousands. Pull the others up from the front row as needed. Right. All righty. Capital outlay proposals.

Yes. Good afternoon, Chair and Committee Members. My name is Lee Scott. Thank you. My name is Lee Scott, Chief Budget Officer here at DMV. With me today is Director Steve Gordon.

We have three issues on the agenda. Like to provide a quick overview of them. DMV is requesting 2,458,000 from the General Fund Fund the performance criteria phase for the continuing DMV, El Centro Brawley DMV field office and Commercial Drive Test center replacement project. That's the first one. The second is the Inglewood onsite replacement project.

DMV is requesting to revert 20,928,000 from the General Fund and replace it with funding from the Public Buildings Construction Fund for the previously approved construction phase of the Inglewood Field office replacement project. Construction of the onsite replacement facility will comply with current building codes and is tentatively scheduled for October of 2023. And the last item here with us at DMV is the San Francisco Onsite replacement project.

DMV is requesting 41,654,000 to Fund the design build phase of the San Francisco Field office onsite replacement project utilizing lease revenue bonds. The performance criteria phase was funded in fiscal year '21-'22 for two and a half million. We're happy to answer any questions for these three specific capital departments.

Lao.

Thank you. Rachel Ehlers with the LAO. So essentially, the proposals before you are switching the funding source for these capital outlay projects from the General Fund to lease revenue bonds. There are trade offs with that, obviously, because that incurs debt service. But given the condition of the General Fund, there's certainly an argument for that. I think our concern is that the Administration hasn't identified what Fund source will be used to pay the debt service for those lease revenue bonds.

We think it's important when you borrow money, you know how you're going to pay it back. But in particular here, because the two sources really have trade offs associated with them. The two potential sources, the motor vehicle account, is what has traditionally been used, and there's a real policy rationale for using that because drivers are paying for the services that they are taking advantage of. But that Fund has a structural imbalance and is projected to have deficits in that years even without this.

On the other hand, the General Fund, you're getting into some unprecedented policy issues, or largely unprecedented in using General Fund, General Tax Dollars to Fund these services. And also, we know that there are some issues with the General Fund health. So we really, our recommendation to you is identify which Fund source you're going to use for paying the debt service before you do this.

We think the administration's proposal of let's just wait and see when the debt service comes due, what Fund source we'll use precludes your ability to make changes to the motor vehicle account if you want to use that source and generate additional revenues or build it into your multi year General Fund plans if you want to use the General Fund. So that's our overall recommendation, really, if you're going to take this lease revenue approach, identify what Fund source you would use.

Thank you for that input. Appreciate it. Go ahead.

Hello. Randy Katz, Department of Finance. We support DMVs and CHPs when they come up their facility projects. We are opposed to the LAO's proposal about specifying the Fund source for which debt service would be paid. Debt service on these bonds would be for 25 years. So it would be talking about having us locked into a specific Fund source from '26-'27 or '27-'28 through the 2050s.

Our projections only go out three or four years, much less than nearly 30 years of bond funds. So by having us locked in restricts both the administrative and the Legislature's flexibility to choose what is the best Fund source for any given year. We would also note that anything that precludes using General Fund as a backstop could risk making the bonds more expensive.

Does the LAO want to respond to that?

Yeah, I think our recommendation is not necessarily that you lock yourself in and wouldn't have flexibility, it's just really having a plan. What is your plan? If you're going to borrow these monies, what is your intention? For which Fund source and are there steps you want to take right now? For example, if you want to use the motor vehicle account, are there steps you want to take to make that an option because of the existing Fund source?

So it's really not limiting flexibility, not locking in, but having a plan that you've identified.

Department of Finance, you want to respond to that?

Sure. We'll try to get you out of here soon. It's the best way for us to get to what we think is policy. So again, our concern is about limiting flexibility. We would also note that for these projects, we're talking about 25 million a year or so in debt service, which is fairly small potatoes in the realm of all the other pressures that affects below our threshold for multi year.

Thanks a lot. We'll end the back and forth there on that. Members, any questions or comments? Right. Okay. All right, we're going to hold this item open. Thank you very much. Gentlemen. We are at issue nine wireless mobile video audio recording systems and body worn cameras statewide implementation. I assume the Highway Patrol will begin this presentation?

Yes, sir. Good afternoon, chair Members of the Committee. Assistant Commissioner Brandon Johnson with the California High Patrol with me today. I have Lieutenant Caleb Brock with our legislative unit.

I appreciate the opportunity to be with you today to discuss the California High Patrol's proposals. The California High Patrol is requesting 11 permanent positions and a multi year budget augmentation from the MBA to extend the WMBArs, that's our wireless mobile video audio recording system project, and implement body worn cameras statewide. This proposal requests a one time budget augmentation of 9.8 million for fiscal year 23249.9 million in fiscal year 2425 and a 4.9 million ongoing budget augmentation beginning in fiscal year 2526.

The requested 11 positions will allow for proper maintenance, support and oversight of the body worn camera program and departmental compliance with the requirements of the California Public Records Act and other statutory requirements for information disclosure to the public. Many high profile national events have created a growing public expectation for use of body worn cameras by law enforcement agencies. Use of this technology is critical to meet the public's expectation for increased transparency.

We believe the use of body worn cameras can increase public trust and confidence in the police. The pilot was overwhelmingly positive in favor of the use of body worn cameras. Not only was the feedback from the public positive, but our officers were in favor of the equipment as well, knowing their interactions were in the public view and recorded. Most enforcement contacts made by Members of the CHP involve vehicles and are recorded by the in car WM bars system.

The pre stop observations captured using an in car camera system are invaluable in providing transparency and documenting the circumstances and events leading up to enforcement contacts. The use of bodyworm cameras provides an additional view of an officer's contact with the public, which is not always captured on the in car camera system. This project will greatly benefit the CHP's efforts for increased accountability, transparency, and improved community relations. If approved, this proposal will provide a body worn camera for every uniform CH patrol employee.

Additionally, each CHP patrol vehicle will be equipped with one docking station where the body worn cameras will be synced with the in car camera system. When synced, the body worn camera footage is associated with the in car camera footage. With the statewide body worn camera implementation, the Department is requesting authority for 11 new positions to support the increase in workload and staff work associated with the new program.

Additionally, a portion of the funding will provide essential video redaction software licenses needed to redact necessary information from the captured footage prior to release of the information subject to PRA. We are respectfully asking for your support on this proposal and I'm happy to answer any questions you may have.

Any other presentations from the Administration? Great, LAO?

We don't have any concerns with the proposal. It seems like it would go a long way to increasing transparency and accountability. We will just note that this is proposed to be funded out of the motor vehicles account, which, as I noted, is projected to have a structure, currently has an operating imbalance, and is projected to have a deficit in the future years. So that's something you'll have to confront, especially if you're adding additional costs.

One quick question, what is the official then policy of the Department for the Officers in terms of the wearing of their body worn camera? So, the Department policy requires specific mandatory activities that the officers must activate the camera.

It includes enforcement contacts, vehicle searches and inventories assisting disabling motorist confrontational interactions with Members of the public, and searches Department policy also defines optional activations, which include pre enforcement stop activities and observations such as pacing, speed violators or suspected DUI drivers.

Thank you very much, and you said strong acceptance by the officers.

Very much so. Yes, they support it.

This issue, when cameras first came out, there was skepticism on the part of many officers. But I have so many officers now tell me that the cameras have been the best thing that's happened to them in terms of protecting them from allegations, et cetera, as it goes forward. So we're going to hold that item open also. Thank you very much. Appreciate it. We are now going to move to public comment.

So we're accepting public comment at the end of the hearing, both in the hearing room and on the phone. Again, the phone number to connect to the Committee is on the website, should also be on the screen if you're watching over the Internet. The number is 877-692-8957 the public access code is 131-5447 and we'll start with public testimony here in the room. Welcome all. The public testimony is limited to 1 minute. If you're briefer than that, nobody would be unhappy. Thank you.

Good morning, Chair Bennett and Mr. Garcia. Jennifer Fearing, on behalf of the National Wildlife Federation and the Nature Conservancy, in support of issue six. This BCP funds Caltrans to add new positions that we heard are needed to implement last year's AB 2344 which was authored by your colleague, Ms. Friedman. And that would require Caltrans and CDFW to work together to establish an inventory of wildlife connectivity needs and perform assessments to identify potential barriers on the state highway system.

With the recent news of the state's agreement with Brightline to build and maintain three new wildlife crossings imminently along the new rail line and I 15, a new ambitious philanthropic effort to raise 500 million for new wildlife crossings and the first bobcat using the undercrossing along Highway 17. There is a lot of positive momentum behind California's efforts, so we urge you to approve these positions and we appreciate Cal Trans enthusiasm for this work. Thank you.

Thank you very much.

Good afternoon, Chair Bennett. Not so many members, but Members, thank you so much for your comments in this hearing earlier. We really appreciate your support for transit. I'm Rebecca Long with the Metropolitan Transportation Commission. We're the regional planning agency for the nine county Bay Area, and we face a significant fiscal cliff in that region. I wanted to just highlight the climate and equity impacts for the region. We cannot achieve the state mandated climate goals in our region without a robust, reliable transit system.

So that is a huge concern. And then I did just want to make a couple of quick points. A couple of times in the hearing it was mentioned that the state does not currently provide transit operating assistance, but that's actually not correct. There is almost $1.0 billion provided in state transit operations, but it's not from the General Fund.

And we would submit that finding a multi year solution, which we entirely agree with you, we need a short term solution, albeit multi year, and we need a longer term solution. But we do think what would be preferable is looking to sources other than the General Fund, such as special funds.

Thank you very much.

Thank you very much.

Yeah, so we're going to take a quick pause here because I want to ask Assembly Member Garcia. What's that? You've already voted already. Oh, thank you very much. I wanted to make sure that. All right, great. We'll go back to our speaker here.

I'll try and fit this in. Steve Wallach, on behalf of the Alameda Contra Costa Transit District, the Alameda County Transportation Commission, the Golden Gate Bridge District, the Napa Valley Transportation Authority, and the California Association for Coordinate Transportation, we're encouraged by the comments you made and others made regarding the transit operation funds, and we look forward to working with you on that and maintaining the commitment for the terse of capital funds.

On another issue, on behalf of the California Association of Port Authorities, we also encourage you to consider maintaining that funding commitment that's in the Governor's Budget. These are funds that are going to be needed for leveraging federal funds. And we'll get back to you on the federal funding that be used for. Thank you.

Thank you very much. Next speaker?

Yes. Dear Members of the budget Subcommittee, my name is Sofia Rafikova. I'm a policy advocate with the Coalition for Clean Air, and we urge you to restore the original allocation to the active transportation program. This program has funded over 800 active transportation projects throughout the state, yet the proposed budget would cut this program by 200 million. The active transportation program advances our state towards achieving multiple climate and air quality mandates passed by the Legislature by encouraging Californians to walk and bike instead of driving.

Therefore, we ask the ATP funding is completely restored through an additional allocation from the state highway account funds. We also ask that the Legislature restore the 2 billion cut to the transit and intercity rail capital program. Investing in public transportation is one of the main ways we can increase transit ridership, which is especially important when many transit agencies are facing a fiscal cliff.

By making transit more reliable and accessible mode of transportation, we can also more easily meet our climate and air quality mandates through the reduction of vehicles miles traveled and greenhouse gas emissions caused by transit riders. Thus, we ask the Legislature to restore this cut. Sofia Rafikova.

For the benefit of the speakers. When you hear that buzzer, that is the 1 minute mark.

I'm going to push one more second. Just kidding. Hi, Mark Watts, representing two clients. First, Metrolink. I just want to align my comments with the representative from MTC on their behalf. My second client is Transportation California. We've had a long history developing funding solutions, including funding for transit, so I want to put that up front.

Our main concern today is the backfill with state highway account funds, the cuts, and we think that even though there is a lot of IHAA funding coming in and other sources of funding coming in, we think it's kind of supplanting and we don't know how long or if there's going to be an extension of IHAA. So it amounts to supplanting.

And I think we think it will simply add to the 10 year highway state management plan, which has already got a huge shortfall of $14 billion on an annual basis. Thank you.

Hi, Chair Bennett, my name is Eli Lipmen and I'm here on behalf of Move LA, a transit advocacy group, and we align with Metrolink and MTC supporting operations funding to keep transit frequent and reliable. But we cannot fill empty seats.

So we are here today as primary sponsors of AB 610 and AB 1919 for Fairfree student transit. We have 20 students from San Francisco, Sacramento, Placer County, La, and San Diego requesting $94 million in this budget to support Fairfree student transit. You've all worked on visionary climate legislation, especially you, Mr. Garcia, Assembly Member Rivas, Assembly Member Friedman, and you've all spoken in our panels at some point, and we'd love to have you. This is a big investment in climate. Let's be real.

Every Bill we have supported is long term planning and land use changes that'll take decades. We need solutions today. That's what CARB said. We need to reduce VMT 25% by 2030. This is going to result in VMT reductions this year. 239,000,000 miles is our estimate in the first year and nearly 2 billion in five years. So please support that Fund.

Good morning. My name is Belen Hernandez, policy advocate with mid city Canon organization in San Diego. 10 years ago, mothers and Members of the community in a Low income neighborhood of San Diego began proposing that access to reliable transportation would change the life of their kids. So they began advocating for no cost transit passes for their students and as of 10 years later, as of May 2022, we launched a pilot program in San Diego. We are asking the state to contribute to this funding.

The local agencies are willing to match, but many other cities like San Diego will need the state in order for the funding to continue and not leave the students without transportation. Thank you.

Thank you.

Good afternoon. My name is Frida Martinez and I'm with Mid City Can. I have been a transit rider my whole life, starting since elementary school all the way to college. I am currently a community college student in San Diego and as a low income student, I cannot afford a car or the myriad of expenses that come with owning one. So I rely on this program. I relied on it in high school and I didn't have it.

That's why I'm here to ask you to allocate $94 million to Fund our youth transit passes across the state. I meet this program in high school and I didn't have it, so that's why I'm here advocating for it. MTS saw an increase of 106% of rides taken by youth, which equals 60, sorry, 600,000 rides that month. We need this state's funding to make sure that these new youth riders can continue to ride with us. Thank you.

Thank you very much.

Hi, my name is Omar Federico. I'm from southeast San Diego and I'm a lifelong transit rider. The bus is directly responsible for me accessing spaces that have allowed me to become the first in my family to enter University.

While many transit agencies across the state have seen negative fiscal impacts due to decreases in ridership after the COVID-19 pandemic, San Diego has actually seen an increase in ridership, especially amongst youth, directly because of our youth opportunity program pilot program, the number of individual youth riders increased from 16K from before the program to number of youth riders tripled in less than a year. And many youth like me will continue to need to utilize transit as we go into adulthood.

We need more people out of cars and on public transportation to meet our climate goal. The state needs to allocate 94 million to continue programs like ours. We need state dollars to continue our San Diego program, which will run out of local funding next year. Thank you.

Thank you very much.

Good afternoon chair. My name is Mike Borasov. I'm a student at Glendale Community College and I'm also the ex official sustainability Commissioner for the City of Glendale. Students are today's riders and tomorrow's ridership.

We need to reduce the average vehicles miles driven in the State of California by 25% by 2030. Let's not procrastinate on this issue. This is immediate ridership, the easiest type of Low hanging fruit. Transit ridership is a core pillar in upholding a clean, equitable and sustainable California. We have less than a decade to reach our climate target goals. Let's start with a strong swing this legislative cycle. Support fare free transit for students across the State of California. Thank you.

Good afternoon. My name is Pearl Sunkami and I am a student leader representing Cal Poly Pomona and I want to touch up upon the need for AB 610 which would provide a free bus transit pass for all California students. A free transit pass would promote student success and retention. Students can utilize their time in the bus to catch up with work.

For a student that lives in Los Angeles and goes to school in Cal Poly Pomona, that's two to 3 hours of valuable time that could be saved. They don't have to worry about how to get to and from school, which is required by law for those under 18. It's a basic need for those who do not have access to a car and it lowers vehicle miles traveled and greenhouse gas emissions, which follows California's goals.

That's a reduction of 105,600 metric tons of greenhouse gas emissions and 239,000,000 miles in a year, equivalent of taking 22,000 cars off the road. Thank you.

Thank you.

Hello, my name is Lorelei Claxton. I am a personal product of the public transit system, specifically the foothill transit system in the San Gabriel Valley. As a student at Cal Poly Pomona University, I have been allotted many opportunities but have only been able to participate in leadership on campus because of my access to free transit pass. I live 6 miles away from Cal Poly at a commuter school, but it is extremely difficult to reach the school safely by other means like bike and scooters.

Prices are high, especially for students that have automobiles that have to pay for maintenance, gas and other expenses like annual parking passes costing $462 annually. 33% of students at Cal Poly Pomona that have irregular access to a vehicle use public transit. Students want to be mindful not only of their expenses, but their actions regarding sustainability and reducing greenhouse gas emissions. For others, the ability to purchase an automobile is near impossible while paying full time tuition transit costs. Thank you.

Thank you very much.

Dear Members of the budget Subcommitee, my name is Heather Brandt. I am a full time California community college student, student, parent, and mother of three, currently serving as the CCSF student, chancellor and delegate on behalf of my college. Within the SSCC student Senate for California community colleges. I am here today because AB 1919 was vetoed due to funds not being put in the budget. Transit access and affordability is a basic need among California students.

We are asking for your help to remove barriers in accessing education by investing $94 million in transit and thus in us and our futures through the support of AB 610. This is an equity issue when we're talking about who has access and who does not, who can afford it and who cannot. We have seen that through data that when supports are in place through transit pass programs, graduation rates increase as much as 27%, as shown with Rio Hondo College in Whittier, California.

It would also help grow enrollment. Coming out of the pandemic. Let us help rebuild transit ridership and be a part of the solution to some of the issues we have heard today. Thank you.

So these individuals are highly represented in our system and the State of housing. Inflation and other macro and microeconomic effects disproportionately impact these individuals that are highly represented in our system. So I come to you all to say, please support AB 610. Thank you.

Thank you very much. Don't forget to pull that microphone down.

Thank you. Yes, I know. My name is Alisha Nagpal and I am a student and part of the associated student body at Folsom Lake College. I'm here to ask you to budget $94 million for AB 610. My college is within the Los Rios district, which has four main campuses plus satellite campuses for all four colleges, which is a lot of places that students may need to travel to. Many students take classes in all four of these class campuses, or just two of them.

Whatever the situation may be, they need public transit. Not all students can afford cars, and having free public transit systems would allow the students to achieve academic success and infaturate future. Thank you.

Thank you.

Good afternoon, Assembly Budget Committee. I'm Hector Ledesma, student trustee of Cerritos Community College, and I'm here in support of AB 610. Assembly Members Holden, Borner, Horvath, Fong, and Pellerin are asking the state to invest $94 million this year to implement a fairfree, statewide student transit pass pilot program that will help California demonstrate how we can help achieve our education, antipoverty, climate and transit goals.

Together, this ultimately will reduce vehicles mileage traveled by 239,000,000 miles in one year and almost 2 billion over the course of five years, ultimately reducing greenhouse gas emissions by over 105,000 metric tons in one year as well. I also wanted to mention that Bearfree student transit provides accessible and equitable educational opportunities to the forefront of student needs. Thank you.

Thank you.

Hi, my name is Kantemir and I'm a student and Senator at CCSF and I want to talk about the topic that affects many of us here, the cost of transportation. As a college student, we know that getting around can be real financial burden. Many of us are already juggling the cost of tuition, textbooks and rent and other expenses and adding transportation cost of that can be overwhelming.

For example, I'm originally from Mongolia, so in Mongolia, all public transit is free for college students, which can be a solution for some issues faced by Mongolians. So one of the main reasons is increased access to education. By eliminating the cost of transportation, making transit for free for college students can remove one more barrier that prevents students from attending classes and studying at library or participating in extra activities. Thank you.

Thank you very much.

Hi there. My name is Thea Selby. I'm a former trustee at City College of San Francisco and a co chair of the San Francisco Transit Riders. And I was so excited today to be listening to you talking about reimagining transportation, because really it's all about funding. It's all about funding and that's why we're here today, because we really have to understand that we need funding to make that truly accessible, affordable transportation safe that we talked about today.

We are asking you to invest, not very much money, $94 million to save California families 375,000,000. That's a three time return on your investment. That is a very good investment. I can't find an investment that good these days. That is a very good investment to make. And you will be helping supporting at a minimum 1.3 million students from K through 12, community college, UC and CSU system. Please consider funding this. Thank you.

Mr. Chair Members Andrew Antwih, on behalf of the Port of Los Angeles to thank the Governor for sustaining the supply chain investment, the 1.2 billion. We're looking forward to the PFIP awards soon. And then on behalf of La Metro, we thank the chair and staff for teeing up a conversation about transit operations. We are implementing local solutions.

I know that was part of the debate and the line of questioning in this Subcommitee earlier today on the ground, but the state has been a partner to achieve the state's climate goals and also VMT reduction goals. And we're in tough times, so we should approach the problem together as far as finding a solution there.

We actually want to say thank you for the award from cycle six from TIRCP and those dollars, and we look forward to sustaining the $4 billion that was part of the budget agreement in this last round as part of our overall strategy to make sure we stay on track with our transit goals, especially from the operations perspective. Thank you.

Thank you very much

Chair Members Dan Chia with Omni Government Relations. On behalf of the Port of Long Beach, we'll make this quick. Thank you very much to Legislature and the Governor for historic advancements last year to ports in response to unprecedented congestion and supply chain issues. So we ask that you maintain that funding in this year's budget. We want to obviously do as much as we can to maintain the resiliency of ports to avoid future supply chain congestion.

Finally, we're currently facing a slowdown in trade due to lingering pandemic impacts and the broader macroeconomic environment. So now is the time to make these investments to keep California ports competitive and to assert our trade leadership in this country. Thank you very much.

Thank you.

Good afternoon, Mr. Chair and Members. Andres Ramirez, on behalf of the Trans Bay Joint Powers Authority, first of all would like to thank the Administration and Legislature for incredible investments in public transit infrastructure over the past several years. But we are concerned about proposed cuts to the planned funding for the transit inner city rail capital program by $2 billion.

TJPA is tasked with delivering the downtown rail extension project and this project is currently in the Federal Transit Administration's Capital Investments grant program, which is expected to provide up to 50% of the project cost. The TIRCP program is a major source of non federal matching funds. So if cuts are made to this program, we realistically face the possibility of not meeting the local match requirements and subject ourselves to further cost escalation, which for DTX is about $300 million annually.

So we look forward to working closely with you all, the Administration and others to ensure that current and future planned funding remains intact. Thank you.

Thank you very much.

Thank you, Mr. Chairman and Members. Moira Top on behalf of the Orange County Transportation authority, we are very grateful for this really thoughtful discussion on transit operations. We too are appreciative of the Administration for their maintenance of $2 billion of the TIRCP funding, but are concerned with the $2 billion proposed cut to TIRCP. Mostly at this late hour we would align ourselves with the transit Association's comments, but just to underscore two points very quickly. One, it was mentioned that not all transit agencies are the same.

That is very true. Our agency, we are back to about 80 or 90% of ridership pre COVID, but what we do see is long term operational issues. So we really appreciate the fact that you're looking at short term as well as long term issues in transit operations. And then secondly, we think it's very important to continually look at our routes and our usability. We have a robust system within our agency to always look at it.

We looked at it in COVID and we will continue to always review our routes.

Thank you very much.

Good afternoon. Council Member David Martin with City College of San Francisco. I'm here in support of free transit for students throughout the State of California. With every single cost associated with education rising over the last decade, we have an opportunity here to make a difference and open up a window for students who may not have access to higher education and the ability to chase their dreams. So please consider funding free transit for education. Thank you.

Thank you very much.

Good afternoon, chair and Members Nuna Garapian On behalf of the Community College League of California, I want to align my comments with all the students you heard today. They came here to Sacramento to really show you all that the time is now to support free transit for our students across the state. It couldn't be more clear. We urge you to support AB 610 bias. Remember Holden. And also to allocate the necessary funding to finally get this done right this time around. Thank you so much.

Thank you.

All right, good afternoon. I know lunch is very soon. My name is Angelica Campos. I'm a student at City College of San Francisco. I'm also a lifelong rider and actually a lifelong rider of many systems that are impacted by the fiscal cliffs that we may be facing with our agencies such as BART and SFMTA. That's why it's so important that we allocate $94 million to this pilot program, aka AB 610, because it's so important, and there are co benefits.

When we provide free funding for students, more students will go to school, be able to go to school, and more, well, more transit agencies will have more riders, potentially longer in the long run with AB 610. With that 94 million, you may see up to, I believe it's 9% increase within two years. And I'm losing the other number for what increase of ridership would look like in 10 years.

But there is studies showing that there would be an increase, and of course, we're here today asking for that funding because with Assembly Bill 1919, it did have the support of. Thank you.

Thank you very much. We will now turn our testimony to the phones. And, operator, if you will open up the phone lines, we're accepting public comments. 1 minute. And, operator, you may begin.

Thank you. If you have a public comment, please press 1 and 0. We do have a comment from line seven. Please go ahead.

Good afternoon, Mr. Chairman, Members Alchemy Graham with the California City Transportation Initiative, representing California's eight largest departments of transportation and or public works departments.

In reference to issue number one, specifically, I'd like to register support for maintaining funding for the active transportation program at the levels included in the fiscal year 2022 and 2023 budget while we understand the current budget outlook is dire, investments in the ATC are essential to cities delivering on the state's several climate, mobility, public health and equity objectives. We urge the Subcommitee to support maintaining funding for the ATC. Thank you.

Thank you.

Thank you. Next is line 32. Please go ahead.

Good afternoon. Audrey Ratajczak from Cruz Strategies on behalf of the Southern California Association of Government Gag respectfully requests that the proposed cuts in the governor's January budget for transportation programs be maintained specifically for the Tursip, ATP and safety grade separation programs. We're hoping to maintain their funding levels established last year. Thank you.

Thank you. And we'll go to line 33.

Good afternoon, Mr. Chairman. Member Steve Cruz, representing the City of San Jose and others wanted to express our support for maintaining General Fund for transit funding and respectfully oppose budget action to cut transit for funding, particularly for capital. Were one of the projects in particular that would benefit would be BART to Silicon Valley, and it's in a position to leverage nearly $5 billion in federal funding. So we're hopeful that we can work with the Legislature to maintain that funding in the budget. Thank you.

Thank you. Next we will go to line 37.

Good afternoon. Chair Bennett Members Alex Walker, manager of government relations at San Francisco Bay Area Rapid Transit District, or BART Jones, thank you for covering issue two today in this hearing. We understand there's a difficult budget outlook.

We hope we can agree on keeping Tersa funds at the previous level and just want to also mention that while we are going to be seeing by 2026 fiscal year, 300 $1.0 million a year deficits, we have been working to try to make our federal funds last as long as possible. We had a hiring freeze during the pandemic. We were taking efficiencies, but with high fixed costs we'd had a slash service to really afford much more in the way of savings.

So we really do appreciate that this will be a short term fix to try to get us to a longer term reimagining of our fiscal structure. So we appreciate your support in that effort. Thank you.

Thank you. The next line 43, please. Go ahead.

Good afternoon, chair Members Kirk Blackburn calling in on behalf of the San Diego Association of Government SANDAG on issues 1 and 2.

SANDAG is supportive of the comments of the California Transit Association and urges Subcommitee to maintain funding for the TRSCP at the current levels. Also, as transit agencies face significant operating shortfalls over the next five years, SANDAG wants to underscore the importance of providing funding for transit operations and finally want to stress the importance of extending statutory relief for transit agencies through fiscal year 2024-25. Thank you.

And next we go to line 48. Please go ahead.

Good afternoon, Members of this Committee. My name is Laura Tolkoff, transportation policy Director for Spur. SPur strongly supports the request that the state take action to protect and improve public transit. We aren't seeking a bailout, but a bridge to help transit survive the fiscal crisis and transition to a thriving, financially stable business model with strategic, sustained and coordinated effort. We hear the call for reforms and accountability and have been vocal in our advocacy for these two.

But there is simply no path to financial stability for transit, let alone improvement, if California's largest systems slip into a death spiral of ever deeper service cuts and disrepair. This funding for operations is absolutely urgent and essential for the future of transit in this state. State funding makes up only a small portion of the operating funding for the systems that are most in need today. Consider that state funds account for only 9% of Mimi's operating budget.

Thank you very much. Thank you very much.

Thank you. Line 46, please go ahead.

Yes, hello, my name is Philip and I'm a resident of Sunnyville, California. And with the most recent atmospheric river and the one last January climate catastrophe is here and we need to absolutely be funding transit with 94 million from AB 610 to enable California students to utilize public transportation, reduce carbon emissions by taking cars off the road and future proofing our infrastructure.

We cannot allow our public transportation systems to fall into the death spiral and we need to help address that fiscal put so please fund public transit. Thank you.

Thank you.

Line 47, please go ahead.

Good afternoon, this is Peter Straus on the Board of the San Francisco Transit Riders and I'm calling in support of operations funding and pretty well aligned with the comments of the CTA speaker. I'll speak on items issues 1 and 2 on the Governor's Budget proposal. We're particularly concerned that reducing transit funding is definitely a step in the wrong direction. With respect to issue two, I will assert that transit is fundamentally sound.

Peak ridership to downtown has plummeted as the paradigms surrounding office work have changed. But if you look at the numbers, other populations continue to ride and depend on transit for all those non downtown, non office trips. But transit needs a new fiscal model to reflect those changes and right now require state assistance until new resources are put in place. Your support for transit operations funding and continuing transit vitality is urgently requested. Thank you,

Thank you.

And line 11 please go ahead.

Good afternoon Assembly Members Adina Levin with area 10 state coalition and the surviving prize coalition on issue two, urging the Committee and the Assembly to support operating funding for public transit. The state will not meet our climate goals or our housing goals or equity goals if we do not keep public transportation running. The importance of regrowing ridership is critical, and here in the Bay Area this week, one of our ridership regrowth strategies and all agency path is showing a 40% increase in transit ridership.

For people that have an all agency path, the strategies to regrow ridership will differ by region, but that investment is absolutely needed to keep the service running and to implement the strategies to regrow that ridership. Thank you.

And line 36, please go ahead.

Hi, good afternoon, chair Bennett, Members of the Committee, Andrew Saul with the Riverside County Transportation Commission just calling on issue one. I'd like to echo the comments of the speakers before me and share our support for maintaining previously approved funding levels for the TIRCP program. We do know that this Committee and the Legislature at large, as well as the Administration, have to take a hard look at spending with the projected deficit this next fiscal year.

However, we do support the restoration of the proposed $2 billion in cuts to this program, which are critically important, particularly as the state prioritizes investments in cleaner and safer and more equitable modes of transportation. So with that, thank you for your time.

Line 16, please go ahead.

Hello. Good morning, Mr. Chairman and the Committee Members. My name is Miya Walker and I'm Director of Public Affairs here at Cerritos College. As you just heard from our student trustee, Hector Ledesma, who just testified before you, Cerritos College supports the $94 million to fund this year for free student transit that has been envisioned under AB 610. The data shows that there's an increase in recruitment and retention for community college students at a time when our campuses are already struggling with enrollment.

We know for sure that at Cerritos College we've seen the benefits of making public transit free and available to our students. We have about 1200 students who are using our free metro pass, and that gives them access to mass transit to school and work. We want to see more students have this benefit. So again, we support funding for AB 610 and ask the Committee fund free transit for students. Thank you for your time.

Line 39, please go ahead.

Good afternoon, chair and Members. This is Emily Loper with Bay Area Council. We represent over 300 major employers across the Bay Area, and we strongly support the ask for operating funding to make sure our transit agencies do not hit this impending fiscal cliff. We know that public transit is essential to our state's equity and climate goals, but it's also the lifeblood of our economy.

Residents of all income levels depend on transit to access their jobs, and providing comfortable and convenient transit options is really critical to our ability to attract and retain workers throughout our region. It's impossible to imagine a world where these operators are required to make such severe service cuts that they're no longer a viable commute option for people. So we know we need to safe transit now. By covering this shortfall, we also strongly support the comments made by Members earlier in the hearing.

We are committed to working to build these systems into a better service that provides safer, cleaner, more reliable travel options within a more seamless and integrated network. Improvements to regrow ridership will help ensure that these systems are more sustainable going forward so they won't be coming back with this ask in a few years. We look forward to working with you to build that better system for the future. Thanks very much.

Line 34, please go ahead.

Hi, my name is Amy Thomson. I'm a Transportation Policy Manager with TransForm. TransForm promotes walkable communities with excellent transportation choices to connect people of all incomes to opportunity, make California affordable and help solve our climate crisis. As discussed today, transit agencies are in crisis and I appreciate the urgency.

72% of California agencies will run out of federal release money for operation support in the coming years and many will be forced to make service cuts that we cannot afford if we don't invest in transit in the short term. While we figure out a long term funding model, we will be in crisis.

Transit is an essential service and we hope that that includes in this year's budget some operations support while not compromising capital investments, Harb determined that we need to double transit service across the state to reduce driving and combat the climate crisis. It's our responsibility as both climate and equity stewards to expand public transit to be the most comfortable, relaxable and safe travel option. Complementary to transit is active transportation. We need walkable, bikeable, accessible communities with frequent and safe connections to family, friends and essential services.

Thank you very much. Your time is up. Thank you very much. Your time is up.

Line 41, please go ahead.

Hello chair Bennett and Committee Members. My name is Elias Garcia. I'm the training and policy manager at the California Community Economic Development Association. We're an Association of over 300 nonprofit organizations who serve people of color and work to create economic opportunity and social equity in Low and moderate income communities. I'm here to ask your continued support for the DMV now self service terminal program.

This program provides access to Latinos and immigrant communities across California. Approximately 313,000 Latinos use the services offered at the kiosks annually, and these kiosks help immigrant and working Low income, diverse communities have access to vital DMV services without leaving their own communities and helps navigate any language or technology barriers. The kiosks include over five languages and there are 364 kiosks in retail and DMV locations statewide, with many accepting cash.

This network of kiosks serves Low and moderate income communities and is a vital service that needs to be continued.

Thank you very much. Time us up.

Line 35, please go ahead.

Good afternoon, I'm Jp Rose. Representative, Diversity we strongly support item six to help Fund the implementation of AB 20. Bold action to address wildlife connectivity is critical to the health of California ecosystems. Some of California's most iconic species, like the mountain lion, are threatened with local extinction due to a lack of wildlife crossings.

Car strikes also kill wines per week in California. The good news is that wildlife crossings work in states that have built them. There have been reductions in vehicle wildlife collisions by up to 98%. Crossings are also cost effective and can be a synergy. Fitting an existing culvert so it's wildlife friendly. AB 2344 is a win for people in our environment. Please support item six to help implement the law. Thank you.

Line 51, please go ahead.

Hi, good afternoon, chair Members. I just wanted to make a comment against public services in BART and support funding for transit agencies. Public transportation in the Bay Area, particularly BART, is an essential part of a healthy and thriving Bay Area. To address climate change, it'll be important to increase the number of people who take public transit is choice instead of just because they don't have the means to drive a car. I take BART weekly and so do many of my community Members.

Reducing the frequency of BART trains will erode trust in the system and push more Bay Area Members to turn to cars for transit, which will increase traffic and congestion and move us away from climate goals. Also, I'm just a resident of San Francisco, not associated with any groups.

Thank you. Thank you. Line 40, please go ahead.

Good afternoon. My name is Jason Baker with the Silicon Valley Leadership Group. We represent about 350 tech and innovation economy Members throughout the Nagan County Bay Area. We support more funding for transit, both operations and infrastructure spending to allow transit to survive its current challenges and to thrive to continue to be a key way for California to meet its climate, jobs and quality of life goals.

Connecting people, helping humans move within and between cities to access jobs and healthcare services and all the things they need to live, work and play is a fundamental function of government and public transit is one of the best, most efficient, cleanest ways we have to connect people. We've had success in the Bay Area at attracting businesses to develop and invest near transit that's better for planning, better for pollution, better for jobs in the economy.

But businesses can only make those investments based on the state and the region's commitment to high quality public transit. Now is not the time to retreat from that commitment. Thank you for your work on this important issue. We stand ready to emerge from this crisis with a better transit system that can serve our needs.

Line 38, please go ahead.

Hi, Jared Conscious, copy. Thanks for being here, chair Bennett first, want to thank the Senator Ting and the Senator Friedman for your earlier comments on the need to adequately Fund active transportation and for questioning our status quo transportation system. At a minimum, we should hope the Legislature restores the plan cut to the ATP, which the Legislature approved last year

Moreover, we request for additional, ongoing and consistent funds to the ATP from the state highway account in order to meet your state policy goals. But we must do more than just a single funding program for active transportation. The ATP only represents 3% of our state transportation budget. Also, request the Legislature prioritize funding for complete street infrastructure by reallocating SSA funds that are going to highway capacity expansion. The proposal will dramatically cut greenhouse gas emissions and deprioritize products that bake in higher emissions for decades to come.

We hope you consider this quest. Thank you for your time.

Line 10, please go ahead.

Good afternoon, chair Bennett and Members. Thank you for the opportunity to comment today and thank you, Assembly Member Friedman, for your leadership on addressing transportation impacts to wildlife and offering AB 2344 my name is Mari Galloway, the California program Director for Wildlife Network, a 501 C three nonprofit which helped organize a sign on letter with almost 100 organizations in support of issue six, which provides Department efficient wildlife and Caltrans with new positions needed to implement last year's past.

AB 2344 this legislation requires agencies work together to identify and remediate potential wildlife connectivity barriers on the state highway system. California's efforts to improve safety for people and wildlife is fueled by collaboration across the state to plan and construct wildlife crossings, but state agencies need adequate staffing to ensure these efforts are successful. Thank you for voting to approve this important proposal today.

Line 28, please go ahead.

Good afternoon chair Bennett, Members and other listeners. I'm Zach Accardi, senior transportation advocate at NRDC, calling in regards to issues 1 and 2. The American public sector has a long and storied legacy of disinvesting in public transit, and California has an opportunity to choose a new path that shares responsibility for the statewide transit network the same way the state once committed to building out and maintaining the state highway network.

This must come with increased accountability to transit agencies, but also to and from the state, whose investments in road and highway expansion have dramatically undermined the transit industry's financial stability for 70 years. The Governor's Budget proposal increases Caltrans funding by 5 billion year over year, which is enough to allow the state to use flexible federal funds to increase year over year ATP and TRCP funding and cover the transit operations fiscal clip gap with other even more flexible General funds.

For example, this funding level is likely to be sustained for the next three and a half years of federal infrastructure law support. Thank you for your time and attention,

Chair Bennett there's no one else in the comment queue.

Thank you very much. Appreciate it. And it's been a long testimony and we will now adjourn, but we have a lot of work to do ahead of us. Thank you. Thank you.