Assembly Budget Subcommittee No. 4 on Climate Crisis, Resources, Energy, and Transportation

All right, great. Hey, good morning, everyone. Welcome to Assembly budget sub four. Today we're going to hear from our transportation agencies. We have seven items that are planned for discussion. For each presentation item, I'll ask each of the witnesses referenced in the agenda to introduce themselves before they begin their testimony. At the end of the presentation items, Members of this Subcommitee may ask questions or make comments on any of the 23 non presentation items. We'll not be taking any votes today.

After all the items are heard, we'll take public comment. Each Member of the public will have 1 minute to speak. There will be no remote testimony in this Committee. And let's take roll, please.

[Roll Call]

So issue item one, transportation budget solutions, if you'll. Good morning. Whenever you're ready, gentlemen. Just pull that nice and close, you won't have to lean so forward and we'll hear better.

Thank you. Good morning, Mister chair and Members. My name is Carlos Quant. I'm the deputy secretary for Budget and Administration here at the California State Transportation Agency. Today I'll be providing an overview of the General Fund solutions included in the governor's 2024 transportation budget. With me here today, I have Chief Deputy secretary for rail and Transit Chad Edison and Steven Keck, the chief financial officer at Caltrans, to help assist answer any questions that you may have.

Over the past 30 years, with the support of the Legislature, California has made some significant investments in the state's transportation infrastructure totaling $16.1 billion. Specifically, this funding was comprised of the following 7.65 billion General Fund for the transit and inner city rail Capital project for rail infrastructure and projects that improve statewide rail and transit connectivity between state, local and regional services and are designed to reduce traffic congestion and greenhouse gas production.

4.2 billion in Proposition one a bond funds for the high Speed rail project 1.2 billion for investments in port, freight and goods movement infrastructure 1.1 billion for the Zero Emission Transit Capital program, which supports investments in zero emission vehicles, associated infrastructure or transit operations 1 billion General Fund for the Active transportation program projects which expand walking and biking networks to increase the safety and mobility of non motorized users 400 million for climate adaptation projects that support climate resiliency and reduce risk to infrastructure and from extreme weather events 350 million General Fund for high priority grade separations projects which support critical safety improvements at grade crossings and finally, 150 million General Fund for the reconnecting community's highways to Boulevards pilot program, which will inform the future conversion of key underutilized highways into multimodal corridors that serve existing residents.

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

The proposed budget includes 2.75 billion in cash management solutions, including 2.1 billion from the Competitive Transit and inter city Rail Capital program, 400 million from the Active transportation program, 150 million from the Highways to Boulevards program, and 100 million from the Port and Freight Infrastructure program. These solutions are not expected to have any programmatic impacts on these programs. The next solution included in the Governor's Budget is a funding delay.

The Governor's Budget proposes to delay 1 billion in TIRCP formula funding from fiscal year 202425 to 202526. I would note that this solution has been adopted as part of the early action agreement between the Legislature and the Administration. The next solution is a Fund shift. The solution proposes to reduce $791 million in the General Fund appropriations in the TIRCB program and backfill them with greenhouse gas reduction funds. The final solution is a budget reduction.

The solution proposes $296 million in General Fund reductions, including $200 million from the Active transportation program and $96 million from the 2021 Port of Oakland appropriation for various port improvements. I would note that the active transportation reduction will not impact any existing commitments made during the last active transportation grant cycle as the reduction would be applied to future grant award cycles.

Of all the solutions proposed in the Governor's Budget, the Legislature Administration have taken early action to partially address the budget shortfall and approved the cash management solution for the port and Freight infrastructure program and the reduction to the Port of Oakland appropriation and, as previously mentioned, the funding delay for the formula TIRCP program along with various Fund shifts from the General Fund to the Greenhouse Gas Reduction Fund.

While the Governor's Budget for transportation includes several solutions, it also maintains roughly 99% of the funding for the historic investments made in clean transportation infrastructure. These investments are already benefiting communities throughout the state and have leveraged nearly $30 billion in federal transportation funding from the bipartisan infrastructure law. The Administration looks forward to working with the Legislature to continue to pursue investments in transportation infrastructure that improve safety, address climate action, and advance equity. At this point, my colleagues and I are happy to answer any questions you may have. Thank you.

Before we go, do any of your other colleagues want to be part of this overview presentation before I start asking questions? I don't think so.

I think we got it covered here.

And I know we have LAO here, but I do want to just mention one thing as you moving through those well, I think it's accurate to say at least significant percentage of the Legislature Members have approached me. The active transportation program is one that the Legislature has pretty strong interest in. I'll be asking some questions about that, but if there's an area of concern that I want to point out in the overview, that's what I'd like to do. Thank you, LAO.

Thank you. Luke Koushmaro with the Legislative Analyst Office. We find that many of the proposed solutions are reasonable. Notably, we find that the cash flow adjustments are designed in a way that will provide for near term cost pressure relief without impacting funding that already has been committed to projects, although we do note that this would create cost pressures in future years when that funding is restored.

We also find that the proposed Fund shift for competitive TIRCP reduces General Fund pressure while maintaining over funding that already has been committed to projects. And given the budget problem, we find that the reductions to ATP as well as the port of Oakland, which was approved as part of the early action, are reasonable, as this funding has not yet been committed.

We do note that additional solutions may be necessary if the budget problem worsens and the Legislature could consider a couple options, such as adjusting the General Fund amounts to be provided for formally to IRCP and could also consider shifting funding from programs currently supported by General Fund to other state transportation funds, such as the state highway account or the road maintenance and rehabilitation account.

We note that a similar action was taken last year when the Legislature shifted $500 million of one time General Fund augmentations for transportation to the state highway account. This could help address the General Fund condition, but comes with some limitations and trade offs. Notably, the funds can only be used for certain purposes, and it also reduces funding for other activities that are currently supported by those funds.

In short, we recommend approving many of the proposed solutions, including the cash flow adjustments, the Fund shift for competitive TIRCP, and the reductions for ATP. We also want to note that historically, General Fund has not been a major source of funding for transportation, given the surplus. In previous years, recent budget agreements have provided or plan to provide an unprecedented amount of General funding for these purposes. The governor's proposals ultimately impact $4.3 billion in General Fund. However, through a combination of the different Fund shifts.

Most of this funding is actually preserved for these programs using the Fund shifts, cash management, as well as delays with a small amount of reductions as well. So overall, given the budget condition, this does a good job of maintaining the priorities from past budgets while bringing up General funding. Have to answer questions.

Thanks. Thank you very much. Welcome, Assemblymember Wilson. Appreciate your attendance and with your particular transportation Committee role, I'll let you start off with questions. All right, great. You're welcome. I have a number of questions, and the first one is with the what is the difference between the competitive transit and inner city rail capital program and the formula based transit and inner city rail capital program? So we get that out on the record, please.

Thank you, Mister chair. So the funding that was provided in the transportation infrastructure package for TARCP was comprised of two separate programs. One of them was a competitive grant program. And so that we did a call for projects, we published guidelines, we had several agencies apply for grant funds. We've awarded all of those funding.

The second set of funding was the Transit University Rail Capital Formula program, which was a program that we worked with the Legislature to establish that provided local agencies funding for transit and capital projects. And so those were allocated on a formula basis. And I'll defer to Mister Edison to provide any additional information about those.

Yes. So the first batch of funding, the competitive funding, allowed agencies that had cost pressures on existing projects to come in and apply those funds for more projects. They were also available for project development on key projects like the, like the portal project in San Francisco, and then they allowed some funding for new projects.

When we did, the formula was part of last year's budget agreement, SB 125, and it allows regional agencies with their transit agency partners, to propose money to both complete essential capital projects as well as Fund operations. So they have funding flexibility within that funding. And most of them have 45 of the 49 have already submitted their plans for how they will spend at least the first year of that money, although most agencies, including the large ones, have submitted plans for all four years in recent months.

And the competitive grants, could they use that for operations and maintenance?

The competitive is not available for operations and maintenance. The formula is.

And in the formula, what percentage of the formula funding is going for operation and maintenance and what percentage is going for new projects.

So this is still under review because applicants haven't asked for all the money yet. But the SB 125 funding is both TRCP and zero emission transit capital, and, well, at least 20% to 25% of the requests to date have requested that money for operations and the rest is going to major capital projects. But we will have more details in the coming weeks on exactly what those requests are.

Do you have a rough idea of what, of the requests that have come in, what that rough number is? How far are we in terms of the request for the.

Yeah, so we are. We are close to. Of the $5.1 billion available, we are approaching $4 billion of that being requested. And of that, well over $1.0 billion is being applied to operations in the initial requests of the agencies.

Great. That's very helpful. Thank you. Want to take a look at in the 2021-2022 1.1 billion over a three year period for the Clean California initiative and that supports the activities such as highway litter abatement, state and local beautification projects and public education campaign. My understanding is that all of these appropriations haven't gone out. This is a possibility for a cut that's been raised. What would be your reaction to the Legislature cutting some part of that program?

So the Clean California program actually sunsets at the end of this fiscal year. There are some funds that have not been fully utilized. The original appropriation was a continuous appropriation from the General Fund. The Department is using those funds to continue along course of increased litter abatement across the state into next fiscal year as well until we can fully utilize all those funds.

I think what we're looking at, if that were to be used for a General Fund solution, we would have to pretty much curtail those activities and look at a potential reduction in force for the folks that we've hired to do that work.

And what percentage of it is litter activities and what percentage of it is beautification projects and public education campaigns?

I don't have those exact numbers. We'll get those to you. Of course, my understanding is that the beautification projects have all been awarded or programmed for award already. So it's pretty much just litter abatement at this point that has not yet been fully utilized.

Public education campaign. Same thing.

I'd have to double check on that and get back to you, sir.

Did get those numbers. We'd appreciate it. Great. All right.

Thank you. Through the chair. Can I ask a follow up question on that? You noted the amount that was left over from the original 100 million. How much was that that you're carrying over into the new year?

I don't have that exact amount because, of course, we won't know until we finish this fiscal year how much has yet to be encumbered or liquidated.

Okay. And do you even like an idea.

Of percentage wise, it's relatively small something.

On the order of about half of one year's worth of litter pickup.

Okay, thank you.

And could you tell me what 5.5 million General Fund for sideshow task force means?

That's a CHP thing, is it?

I think CHP. If. We'll have to check with CHP and get back to you.

All right, thank you. zero, CHP. Looks like somebody may be ready to answer that question. No, I don't think Andrew's going to answer that question.

We'll provide you that information. Chair.

Thank you. Unless Andrew's jumped over to the CHP recently. All righty. Okay. If I could move over.

Chair.

Hi, this is Kathy McCloud, Department of Finance. You asked about the sideshow task force that was temporary funding to, for CHP to put a task force together to address sideshows. It, it ends at. I want to, I'm almost positive it ends at the end of this budget year. It was a one year funding that was approved.

When you say sideshow, what?

So I know, correct me, CHP, if I'm wrong, but it's when all the cars get together and they're doing shows on the intersections of our city streets.

When all the Highway Patrol cars get together.

No, all, it's usually young people.

Enforcement against. Okay.

That would be a cool.

If you just would have said, you said fast and fast and furious. I would have known exactly what you're talking about. All right, great. Thank you very much. Right. Okay. The, and so the status of implementing the dollars previously appropriated, do you have that to your satisfaction? Now? The administration's not backfilling the cut to the active transportation program with the state highway account consistent with what was done last year. And can you explain your rationale for that?

Certainly, sir. Steven Keck with Caltrans. So the driving factor behind not proposing that backfill for the reduction in the augmentation is because in this case, these funds have not yet been awarded or programmed to projects. So by reducing that augmentation, we will not impact any project that's already been planned to move forward.

In contrast, in last year's budget, the $650 million that was shifted to the state highway account, including 200 million for ATP, that was because we already had projects programmed for that money, and to take that away at that time would have impacted those projects negatively.

So I appreciate that program that we're trying to be cautious about any place where we haven't actually allocated the funds. I also appreciate the fact that we're in a transition because of climate change, etcetera. We are trying to pull people out of vehicles, decrease the vehicle miles traveled, try to encourage more people to bike and walk and become less car dependent. And the active transportation program seems to be the major focus there.

And I'm not sure that the Legislature, at least the Assembly side of it, is ready to say we want to walk away from that, particularly as pedestrian deaths have been going up, bicycle deaths have been going up, and we have more and more people moving to those two forms of transportation. So appreciate that it falls into the normal category of not allocated. It's an area where we will want to have further conversations with the Department on. So thank you. And chair, excuse me, could I provide.

Just a couple more points of context on that?

Chair? I always appreciate that.

So I think that it's important when we talk about this to, to know that whenever we use other transportation funds to backfill, in this case, in essence, we're taking away from shop, which is the bread and butter major highway rehab program that Caltrans operates. We were, because of the, we want to make sure we're not breaking commitments.

We did that last year, 650 million is not, it's not as if that is, you know, half of shop or something, but that's a pretty significant cut to the shop program. We really didn't want to go back to shop every time we have a problem because of the work that's important. There's been a lot of storm damage, as you know, since that happened. And we're really trying to save every dime that we can for the shop.

I think the other thing that I try to reiterate to people is that ATP remains an enormous priority even with this reduction, if it was accepted in full. We're talking about the ATP, which gets around $250 million a year, even if with this reduction, we're still talking about a one time influx of 850 million on top of the 250 million. So I think it's important to contextualize that we're not cutting all of it or decimating the program. This is in our eyes. I know that advocates would frame it slightly differently. This is a relatively modest reduction to a very large augmentation to the program.

That's all one time funding. Yes, and that may be something for us to consider. If in fact there is a transition in terms of where we want to go mobility wise in the state, we may want to consider that, but that's very helpful. Context. Appreciate you adding that to the conversation as we move forward. Forward in terms of trying to, you know, reach the climate change goals. We have to keep, keep working on that.

But if we could, the 280 million proposed for electric vehicle fleet replacement is why is it more appropriate to use the SHA dollars than funding the transportation infrastructure to allow Californians to walk and bike safely, which is going back to ATP. So tell me about that specific vehicle replacement. I understand shop and the damage that's out there. It highlights, it really highlights that in many areas we have funding challenges. We have a challenge transportation funding model in the State of California right now.

All recognize that with more electric vehicles, and we're not at vehicle miles traveled yet. So we have those significant challenges out there. But while we're doing that, how about vehicle electric vehicle fleet replacement? So what you to be able to get on the record, why do you think that's more appropriate?

Thank you, chair. To reiterate a little bit of what my colleague from Department of Finance mentioned earlier, the active transportation funding, in addition to having its ongoing funding of, I would say $275 million a year for active transportation, it's not the only source of active transportation type of elements that are funded through the state. We call it complete streets in the shop.

And the recently adopted shop that was adopted by the Commission in March contains over $1.0 billion of bicycle and pedestrian improvements for the safety of the traveling public on the highway system. The recently approved state transportation improvement program, also adopted in March by the Commission, includes an additional $200 million for those same types of elements. So the ATP just happens to be the only program that is solely focused on those elements, but it's not the only program that funds it. Those elements.

With regards to our fleet replacement, the primary driver behind replacing the Caltrans, these certain elements of the Caltrans fleet is the age and condition of that fleet. We have for far too long deferred the replacement of that fleet. Right now we have more than 6200 vehicles in the Caltrans fleet that, that are beyond what is considered useful life by Department of General Services standards. And we began two years ago implementing a program to replace that fleet, a ramped up program.

It is not specifically to replace them with zero emission vehicles per se, but that is the current guidance that we're receiving is while we're replacing the fleet, to begin to transition to electric vehicles without the funding that we're asking for in this budget, there is no other program for us to undertake that replacement of our fleet at the level that we need. So that's why we would, in this case, we are proposing that fleet replacement.

And when you say at the level that we need, what are the parameters? What is the level that you're trying, how often are you trying to replace vehicles? What is it, three years, five years? Number one, I don't have, and number two, what percentage do you have an existing percentage of electric vehicles that were first generation electric vehicles that you're trying to replace if you have that data?

So I don't have that particular data with me for that second question, I will say that in phase one of the vehicle replacement last year, we purchased almost 3000 vehicles, the majority of which were zero emission vehicles. In this phase two, we're looking to be able to purchase at least half of the vehicles as zero emission vehicles. I don't think we're yet at the point where we're replacing old electric vehicles with new ones.

We're looking at the oldest, most polluting vehicles first to replace those before we start replacing first gen electric vehicles. So our goal, in addition to keeping a fleet that will serve the public, we want to get rid of those least, well, let's say the most polluting and the least operational vehicles first.

Thank you. And there was a little distraction here for a second, so I missed the first part. Did you answer the question in terms of what is the number of years that we have? What's the standard we're trying to achieve that you need extra funding for to.

Make sure we get there? So there's a, it's not just a year standard. There's the use of the vehicle, the miles of the vehicle, the condition of the vehicle. And it varies by vehicle type. So passenger vehicles might get a different replacement schedule than a heavy duty vehicle. And it's all controlled through DGS guidelines, which I don't, I can't completely describe to you at this time, but point. We'll be happy to provide more information.

Currently, about half of our fleet is in that range from dgs of needing replacement. So 6200 vehicles is about half of our Caltrans fleet.

Thank you. And without Assembly Member Wilson here, I have no further questions on this. Thank you very much. Really appreciate this helpful overview. And we'll go to issue number two, institutionalizing the California Integrated Travel project and building a data and digital service division.

Thank you, chair. We've had a little staff change. I'm joined by Keith Duncan, our chief budget officer at Caltrans. So this first item. The Department is requesting 70 permanent positions in 26 million in funding to institutionalize the California Integrated Travel project and to establish the data and digital services division within the Department.

The initiative aims to address the complex and fragmented transportation ecosystem in California, which encompasses more than 700 transit services, a multitude of different fare payment systems, limited service applications, which may only work for one of those providers and not all of them, and very diverse regional policies. The lack of standardization and interoperability between these different transit services leads to customer confusion, frustration, and really hampers ridership on our transit systems.

This proposal will provide resources to allow the Department to help agencies comply with the General transit feed specifications known as gtfs. Those that's the language that programs like Google Maps and Apple Maps use to be able to tell the public bus schedules.

Transit schedules and real time gtfs data will allow you, as a rider of transit services to tell where your bus is while you're waiting for it, if it's going to be delayed while you're on it, how long it's going to take you to get to your destination in real time. Those standards are used very extensively throughout the rest of the country and in Europe, not so much here because of our fragmented system.

It will also allow us to help procure standardized annunciators and digital signage in conjunction with some of those smaller transit agencies to help procure standardized automatic passenger information systems so that we can tell which passengers are getting on, where and where they're getting off, and will help to expand the use of open payment fare systems across California.

Excuse me, an open payment fare system is where you can use your phone, just like you do at the grocery store or the gas pump or even at the restaurants these days to tap and pay. You can't do that on all of our transit systems, and sometimes you need a separate pass for this agency, a separate pass for that agency, and maybe a third one for another agency. So we're looking to try to standardize that across the state.

We're also going to be able to help small and rural transit agencies seek and apply for federal grant funding. We've identified more than 50 different federal grants that are available for small transit providers that they just don't have their wherewithal to keep track of, know when to apply or even how to apply. And we can also help them to utilize those federal funds because most of them, again, are not familiar with the federal funds process.

The data and Digital Services division itself will oversee process improvements in grant management, as well as helping local agencies delve into the data that they'll be receiving from these new systems so that they can optimize their routes. I talked about automated passenger information systems. Right now, they don't know where people are getting on and off. Right. You have the driver who can generally tell, but they don't have specific counts. Without that information, it's difficult to know how effective your transit service is being.

Does it make sense to continue to stop here if nobody's getting on or off? So that will really help to provide that information as well. And finally, by bringing all these small local agencies together under the state's umbrella, not under our control, but we can really maximize our purchasing power. Right.

Instead of having each individual agency go out and try to find these products that we need, we can get it all into one big service contract through Department of General Services and help leverage our dollars that way and local agency dollars as well.

Thank you. To the extent that the proposal increases.

I'm sorry, are you Department of Finance or.

Okay, nothing to add at this time.

Great. Thank you.

Thank you. To the extent that this proposal would increase public transit ridership, we find it could have merit as this aligns with certain legislative priorities, such as improving transportation mobility and reducing vehicle miles traveled in individual automobiles. However, particularly given the ongoing nature of the proposal and the budget situation, the Legislature may want to consider whether other priorities may be a better justification for the use of this funding.

For example, it could consider using the funds to sustain funding for programs that it had planned to support with General Fund that are now subject to budget solutions. It could also consider providing additional assistance to public transit agencies directly, are facing operational shortfalls. Thank you.

So I understand that this program is ongoing, and now this will make this program have sort of a permanent status, correct?

And so how much of this permanent status is going to be an expansion of the program from its current level?

Yes, sir.

Yeah. So specifically, the data and digital services division would be a new service that we would be providing to help. Again, these small rural agencies manage their data and for us to be able to provide better grant services to those local agencies, connecting them with opportunities, helping them with the application, providing that technical assistance as well. That would be an expanded function in addition to the continuation of Cal ITP.

I'm also given to understand that we've had somewhere in the order of several hundred transit agencies reaching out to us after our first round saying, hey, we want, we would like to be involved going forward as well. So we're seeing some increased interest on the traditional Cal ITP side as well.

If this expansion was delayed a year, what would be the impact?

First we had the issue of, and Keith can correct me if I'm wrong, we have the lowland funding which may jeopardize some existing positions that we have working on this. I couldn't tell you what the ultimate impact of a one year delay would be, but I can say that as ridership is increasing post pandemic, this is a good opportunity for us to begin to implement, especially the data collection and data procurement phase of this, because really what the pandemic did to ridership was unprecedented.

It makes it very difficult for us to know how what we've already done is impacting ridership. But we do know that other places that have done something like an open, fair payment system have seen in New York City a 10% increase in ridership just because of that. So we're very eager to get this going as we're trying to entice the riders back to transit.

What amount of money would we need to make sure that we just continued the existing program? Since you say it's in a role.

Keith may have that number. If not, we'll get back to you with the specifics.

It looks like he might have that number.

Keith Duncan, Caltrans budgets roughly a third of what's being requested is currently what's being resourced through continuous, or I say expiring funds from the CARES act, the federal act from a couple years ago.

So if I could say this and that is that this is a great program, and if, you know, if we didn't have a budget problem at all, that would be doubling down on this program. I think to express sort of the will of legislate led very strong support for transit overall, trying to make sure that transit works.

I think the question is, and I think everybody wants us to have a modern transit system, and it's hard to have a modern transit system when you have sort of all these different, particularly these small rural areas, etcetera. The question is, is this the time to be able to do this expansion? And I think there's strong desire to try to have a really modern system.

There's also a strong desire to make sure that just a year ago we were talking about a transit cliff, that they were going to go off the edge if this money kept transit agencies from going off the edge. That would be a potentially very different decision than whether we want to do this expansion.

The final thing that I would offer in terms of a concern to bring up now, because we will have these conversations as we go forward, is that just in General, my experience is government agencies trying to do technology expansions, technology upgrades, etcetera, usually find that they don't get anywhere near the bang for the buck that they thought they were going to get because of a variety of reasons.

But the challenge of trying to do sort of a technology upgrade with hundreds and hundreds of transit agencies throughout the state, it's going to be difficult to track whether we're really getting the bang for the buck that we want, that we could have a program that sounds really good on paper and we put $80 million into it.

We expand a lot of positions and we still have only a marginal improvement in the things that we would like to have, which is everybody walks on the transit and no matter what agency they're associated with, they can, they can pay. The agency knows where they got on, the agency knows where they got off. That's all really nice. We may still be saying we need all of that after the significant expansion of this Department. So those are the concerns that I wanted to express.

And Assembly Member Petrie Norris has just shown up and I'll give her an opportunity to ask a question. We're on issue two.

No, and thank you, chair. I think the. I would just echo the points that you've made that while these are important investments, I do think we need to take a really hard look about whether or not this is the right time for us to be making them. And I think that while we.

And I think we also need to think about the investments we're making and conversations around any sort of like fiscal cliff with the reality of a situation, not kind of what we hope eventually ridership will be and plan for that. I think sometimes it feels like we're always, we're budgeting with sort of this hopeful scenario in mind that it seems like we have not yet been able to achieve.

So I think we got to be really realistic as we're weighing these investments and opportunities against other opportunities this year. Thanks.

So if I could ask, do you have any data on how the, you know, the expenditures we've made so far for Cal ITP have helped or impacted ridership? Do we have any data there that could help us?

So in terms of the data collection, that's really one of the big issues that we're trying to address. With the local agencies is they don't have that robust data collection, and that's why we're really pushing this automated passenger count type of systems as well as the open payment system.

Great. And the other question that we submitted to you in advance, could the PTA funding be used for the zero admission transit capital program, which would then free GGRF up for some other things? Is that technically and legally possible?

Yeah. We believe that given the descriptions we have of the zero emission transit capital program that it most likely would be eligible for PTA funding. We would have to carefully analyze any specific proposal, but the short answer is most likely yes.

We'll have more conversations about this, like many things with you guys over the next few weeks and months. All righty. Anything else, Assembly Member? Anything that's missing there that you need information on? All right, we're ready to go on to item issue three. Thank you very much.

Thank you, chair this. We've touched on this a little bit already. This is our request for 279 million from the state highway account for a two year limited term initiative to replace our aging fleet and to install zero emission vehicle infrastructure at Caltrans facilities across the state. Our aging fleet of more than 12,000 vehicles presents environmental and operational challenges which impact the efficiency for transportation services.

To be clear, our request of 279 million includes 250 million for fleet replacement, 22.5 million for ZEV infrastructure, and 6.5 million to Fund 50 positions that are continuing over from our first phase that was approved two years ago. This proposal addresses years 3 and 4 of our multi year plan to replace vehicles that have the highest emissions, the highest mileage, the highest repair costs, and that are in generally poor condition. We aim to replace approximately 3000 vehicles with this funding over the next two years.

And in this phase we're focusing on medium and heavy duty vehicles. These are, in many cases, specialty type of vehicles that we use to maintain and our highway systems, including those responsible for replacing and repairing safety barriers, snow plowing, vegetation control. I have a big old list. I won't get into it, but these are a lot of, these are specialty type of equipment that we use to maintain our highway system.

We do have California's largest and most diverse fleet, and it's vital for maintaining access to our transportation systems and for providing for the public safety. And continuation of our multi year plan to replace our fleet is critical for us to continue to provide that role.

Department of Finance Ted do,

Frank Jimenez with the Legislative Analyst Office, no concerns with the proposal. But as Mister Keck mentioned. This proposal is for year 3 and 4 of a longer term fleet replacement plan by the Department. As noted in your agenda, the Legislature may want to ask oversight questions of how years 1 and 2 went, and also oversight of this proposal, which tends to focus a bit more on the medium and heavy duty side.

I'm going to start with the medium and heavy duty side. What percentage of this do you expect to be electric vehicles?

Yeah. So we do recognize that in this arena, the medium and heavy duty, we won't find the same level of readiness in the industry that we saw with our light duty vehicles in phase one. My conversations with the program, they're still looking to purchase over 50% of the vehicles as electric vehicles in this round. And, you know, key to that is working with the manufacturers. When we purchase vehicles, we purchase what they call fleet vehicles.

They're not the same as what you might find on a commercial car lot. And so we need to work with manufacturers, say, what's your production look like? Key in those discussions is having money in hand. When we have money in hand, we get responses and we get ramp up to produce those vehicles. And we saw that last year as well with our fleet purchases. So we're thinking about 50% for this round.

I would encourage us to do what we can, but be cautious about first generation electric vehicles in high powered, medium, and heavy duty without understanding performance guidelines and performance issues that could come about.

Yes, sir. And to that point, part of our strategy moving forward is for those vehicles that are not on standard Department of General Services purchase lists. We'll be using, in many cases, best value procurement, which is available to the Department for those Nonstandard vehicles. Vehicles. We'll be looking at stuff like that. What's the performance of the electrical system? What kind of maintenance is required for the vehicle so that really, it will reduce the overall long term cost of operating the.

And, of course, the hardest thing with first generation is to determine what the battery life is going to be, particularly with heavy duty.

Absolutely.

So can you tell us about your successes and your challenges with your year 1 and 2 in terms of implementation?

Yeah, certainly. So in the first two years in phase one, we were able to purchase 2782 total vehicles. I think we had planned for 3000 with the funding we received. So very, very close to that. The majority of those have been delivered. They've gotten the Caltrans treatment and are on the road doing the jobs. With regard to zero emission vehicle infrastructure, which was included in phase one as well, we had a total of 2180 total charging port.

Excuse me, I'm stumbling a little bit over the words 2180 charging ports, including some mobile charging solutions that we felt were necessary to ensure that we always could make sure our vehicles ran where they needed to run. So I'd say we just about hit our targets for the first two years.

There were some challenges, as noted, but we did have a very good working relationship with manufacturers, especially in year two, where we were able to procure, I think, actually even higher than our original target for zevs in year two. And we're taking delivery of those vehicles now and giving them the Caltrans treatment, and you'll soon see those on the road as well. But again, working with the industry has been the biggest challenge.

But especially in year two, when they saw we had the money, we got ramp up pretty quickly.

The industry's been really challenged with supply chain issues, and consequently we're seeing higher prices across the board. How much were. Were we impacted in terms of what we hope to accomplish versus what we were able to accomplish due to those higher prices?

Yeah. Doing so in terms of the vehicles, I think we had planned on about 3000, and we ended up getting 2782 vehicles. So pretty darn close. Despite inflation, that was over 8% at 1.0. This current year request is notably higher than the first two year request to account for both the inflation and the fact that medium and heavy duty vehicles inherently cost more.

Thank you, assemblymember.

So what jumped out at me in this item was the 50 positions annually. That kind of seems like a lot of people to manage this program to me. Are these new positions or is this existing staff?

Yeah, so it is existing staff that was included. I'll try to slap existing staff that was included in the first year. First. Sorry, the first phase. The first two years of this program. And it's not. So when we're talking about staff or Caltrans fleet, it's varied. Right. You have the folks who need to do the purchase of the vehicles, which is not that much.

Right.

But you also need to work with manufacturers on the specific design of many of our vehicles for medium and heavy duty vehicles, especially some of these are actually built in house by Caltrans. So some of these positions would go towards that.

Okay, so in some cases, they're actually. So this is not 50 people that are just, like, ordering vehicles?

Zero, no, no. I think that's a very small percentage of this.

Okay, that is a helpful point of clarification.

Right. We have to engineer the solution, build it in many cases, and then we have to dispose of the older vehicles. As well, which takes quite a bit of effort.

Okay. So there's some folks that are actually doing manufacturing and development.

Zero, yeah. It's very impressive. If you have time, you should come out to one of our equipment shops. It's amazing.

Okay, great. Thank you.

So even in budget times, I think it's really important to not build up a lot of deferred maintenance or build up a fleet that is aging. It's Pennywise and pound foolish. So in General, supportive of these efforts in terms of fleet. Appreciate the question from the Assembly Members. My understanding, too, these are ongoing positions that are now transitioning from temporary to permanent as we move forward, as opposed to, you know, the program before, where we're talking about sort of an expansion of a new program.

And with that, if there are no other questions, we're going to move on to issue four, a very high speed rail. And we have three different issues on high speed rail. Two of them will be presentation items. And while we're making the transition, I'm going to hit the restroom very quickly.

It.

It, it.

When you're ready.

All right. Well, good morning, Mister chair Members. My name is Brian Annis. I'm the chief financial officer for the California High Speed Rail Authority. I'm joined by my assistant CFO, Natalie Daniel, and also our budget officer, Derek Lee. And I'm happy to briefly present on the budget change proposal that is in your agenda. The BCP request is something we call form to function. This is a proposal to reduce consultant resources and replace them with new state staff positions.

This will result in an overall Department savings of about $8.7 million per year. Specifically, our proposal requests to reduce 63 full time consultant equivalent positions at a cost of about $22.2 million and add 67 state staff positions, which will cost about 13.5 million here. Of course, state staff are less expensive than the consultant positions, so again, we have net savings of about $8.7 million.

This proposal is consistent with legislative direction and government code 19130 to use state staff for state functions instead of consultants, unless where the work involves specialized skills that are not available in state service or the work is temporary or occasional. This is also consistent with the findings of the California State Auditor in a 2018 audit. As noted in your staff agenda, in prior bcps from fiscal year 1920 and 2021, we previously eliminated consultant positions and added state staff consistent with the audit.

We have recently done a broader review of current contracts and we believe we can take on additional work with state staff in the areas of our proposal. In addition to consistency with the government code, our proposal is also appropriate to increase direct state oversight over critical areas like construction quality. And finally, as part of the BCP, we are also requesting trailer Bill Language to authorize the authority to use up to 5% of Proposition one.

A bond proceeds for Administration the 2008 Bond act authorized 2.5%, or 225 million initially for Administration and 5% or 450 million with legislative approval. After 15 years since the Bond act passed and was approved by voters, we've almost exhausted the initial $225 million and need access to the remaining 225 million. That would get us up to the 5% level, and this request is necessary to maintain funding for ongoing administrative operations going into the 2425 fiscal year. And I'm happy to answer any questions.

Thank you. Department of Finance

Bowen Peterson Department of Finance we have nothing to add.

Helen Kerstein with the Legislative Analyst Office we haven't raised any concerns with the proposal.

Assembly Member, great. I've just offered this and that is we pretty much don't have any choice in terms of going from two and a half to 5%. I wish we had the people who originally ran the campaign for the high speed rail, who thought by 15 years we would be in a very different spot. But it leads to my next point, which is for 20 years on the Board of Supervisors, we wrestled with this question. Is it better to use consultants?

Is it better to use staff? I've come to the conclusion that if you have, if it's a short term project, the consultancy makes some sense. It's very clear that the high speed rail is not a short term project. Right. The second thing is, as long as you can hire good staff, the advantage of staff is that they have much more loyalty to the project.

They're not, you know, there's almost an incentive sometimes to sort of say, well, leave a bunch of things undone because you'll need the consultant. More and more staff has a, you know, hopefully loyalty to the State of California and to the project, and you get people that really start to own that.

So with that, certainly both of these make sense to me from the standpoint of moving forward, and we're going to move on to issue five, establishing the office of Inspector General at the high speed rail. Welcome back, Assemblymember Wilson. oh, no problem. Begin when you're ready.

Good afternoon, Mister chair Members of the Committee. My name is Ben Belknap. I was recently appointed as the California's first ever Inspector General of the High speed rail, and I'm joined with Amanda Millon. She was recently hired as the deputy of Administration in investigations and strategic initiatives. The role of the Office of Inspector General is to improve the oversight and accountability of the high speed rail project by conducting independent, objective reviews and investigations of the authorities planning, delivery, and operations of high speed rail.

In this BCP, we are requesting a workload budget adjustment of 14 total positions, equating to roughly $2 million. The purpose of this request is to establish a fully functioning Inspector General's office that can carry out the responsibilities outlined in state law, including independent assessments of the authority's annual reports and other reviews of the authorities operations.

Since my appointment, I have hired three Members of management, began building out the administrative functions of this office, reviewed the authorities 2023 project update report, and I'm currently finalizing our review of the authority's 2024 business plan. Through these reviews, we have made and will soon make several recommendations to the authority to improve its plans and are actively working with the authority to encourage them to make these improvements in future reports.

Approval of the BCP would enable my office to implement its fiscal year 2425 work plan, which, in addition to reviewing the 2025 project update report will include six different operational reviews of critical elements of the high speed rail project, including the authorities efforts to control project costs, oversee its contractors, and secure necessary funding.

We will finalize our work plan in the coming months through a formal risk assessment in which we will evaluate vulnerabilities and risks associated with the project and will identify any additional areas of priority for review, a process that will include input from stakeholders, including the Administration, legislative Members, and staff. Finally, approval of the BCP will also provide necessary funding for my office to hire staff and establish and implement the office's statutory responsibilities to receive and investigate whistleblower complaints. And with that, I'd welcome any questions.

Thank you. Before we go to the Department of Finance and Lao, I just would like to point out that the Assembly has created a 7th Subcommitee based focused on accountability, transparency, and the Office of Inspector General is one that I believe the Assembly is going to have strong interest in supporting as we move forward. So I don't think there's any question that this is consistent with where a new emphasis on the part of the Assembly in terms of that. So we wish you well.

We want to use this opportunity to communicate our strong desire for you to be truly independent and for you to be able to communicate with us anytime that you feel it's appropriate. And that is, I think, a sincere and genuine invitation from all the Committee Members on this Committee in terms of being able to communicate anything about high speed rail from the standpoint of what your responsibilities are. So thank you.

Department of Finance, nothing to add at this time.

Thank you. Lao has a lot to add.

Helen Kirsten with the legislative analysts again. So we do have a few comments on this proposal. Overall, we think the requested level of resources makes sense. It appears reasonable to accomplish the work plan that's being proposed. But we've identified three potential barriers to really the most successful and independent operation of the office, which we know was a big priority for the Legislature.

When the Legislature really took the, the initiative to create this office, this was a big priority as part of the negotiations to approve the Prop one, a funding for high speed rail. So those three issues that we've identified are, first, that some of the proposed positions are temporary in nature rather than permanent, and we think that there's some chance it could be more difficult to hire and retain those temporary employees.

There's, of course, a trade off with temporary employees, but we think there's probably enough ongoing workloads to sustain these folks, and it would be easier to get the best people if we have permanent positions in there. That's also consistent with the original request made by the office, which was subsequently modified by the Administration.

Second, we would note that the OIG currently lacks authority to use one of its requested classifications, which we have heard from the OIG that that classification is important because it would allow the OIG to pay a similar level to some of the other entities within the state that have similar kinds of audit positions, like the state comptroller's office, like the State Auditor, like CalPERS. So that's another potential issue.

And then third, there are some kind of technical tweaks that we are that we have identified some areas related to the JLBC notifications that we think could help preserve the budgetary Independence of the office and really make sure that the Legislature is aware when the OIG has budgetary needs. So we do have some recommended actions that would address those concerns. First, we recommend the Legislature Fund all of the requested positions on a permanent basis.

Second, we recommend that the Legislature provide the OIG with a statutory authority to use the requested or similar positions. And third, again, some tweaks both to budget Bill Language and trailer Bill Language related to GLBC Joint Legislative Budget Committee notifications just to ensure that budgetary Independence. Happy to go through those if you'd like, but in the interest of time, I'll stop on this.

Certainly want to be respectful of the other Members here, but I will be surprised if there isn't strong support for the LAO's recommendations. But our Committee chair of transportation. I'll let you kick this off.

Thank you. Definitely appreciate you and the work that you do in the OIG as it relates to high speed Rel and any way that I can support your work. Happy to. This question is related to the Legislative Analyst, the office, the recommendations, and so in funding the positions on a permanent basis, that doesn't change the amount of the request, right? It's just now permanent instead of temporary.

So it wouldn't change the amount in the budget year, but it would change the amount in the out years because I think they're proposed for. Is it through three years? I think they're proposed for funding for three years. So they, right now there's a higher level of funding for the first three years, and then it would drop off a little bit as those temporary positions would go away unless they're reauthorized through a subsequent budget action.

But if they were approved on a permanent basis, then kind of as part of the baseline budget, that higher level would continue for kind of indefinitely. Until, again, the Legislature is always able to make changes, but the default would be to provide the funding for those.

Positions and the work plan. And this might be for you. Then the work plan that you currently have, it's based on just having those positions for three years and then dropping off, or the work plan that you have is expected to achieve, where you would just get reauthorization, continual reauthorization for those temporary positions.

So to be clear, that's a one year work plan that just looks like this fiscal year. And we would adjust it every year. And we anticipate needing 14 positions, including my own, in addition to my own. So 15 total to carry out that work plan. And every year we would adjust that work plan in perpetuity.

And would you say in perpetuity the likelihood of needing less than 15 positions based on the information you have today? And I recognize that. That you would still need those positions.

The estimate we put together is based on years of experience in auditing. We know what the tasks are in front of us, what state law requires us to do. We think this is a baseline amount, a reasonable estimate of the auditing resources necessary to carry out that responsibility.

Okay, so 15 positions for the foreseeable future based on the information that we have today. Okay. So there would be. And that was the original request, as I understand it was, original requests were to be permanent and then maybe for cost saving measures or for some measures. That was where I think the final one. That's where it was reduced. Is that where the joint budget, budget legislative Committee, they reduced it or who actually reduced it?

So it's common for BC. And of course, Department of Finance can, can, can also comment. But typically departments provide, you know, they provide their bcps and then they go through a process with the Administration. They're reviewed often by agency and then finance, and sometimes there are changes that are made. Usually the Legislature. We don't necessarily. We usually don't know what those are. We just see what's in the Governor's Budget. We don't usually see what the Department originally proposed. This case.

In this case, it's different because the Legislature specifically wanted to give the OIG additional budgetary Independence. So there's language in statute that requires that the JLBC, the Joint Legislative Budget Committee, would be notified on Jan. 10 when, with the submission of the budget, if there's a modification to the budgetary, the total budget amount for the OIG. In this case, it was, you know, it's sort of a kind of technical thing because there wasn't a change to this, the request for the budget year.

And so the JLBC didn't receive a notification, but sort of the out year amounts would be different. So in our, that's part of one of the reasons for our recommendation related to that tweak to the trailer Bill Language. We think that sort of in the spirit of what the Legislature initially intended, that it would be more appropriate for the Legislature through the JLBC to be notified of any change.

That way you would know if, if there's a change to temporary versus permanent, all of those things, you would receive a notification. We only found out because we specifically just asked a question and they were honest, which we appreciate. They indicated that that had been a change that was made.

But we think it would be nice for the Legislature to just get that information upfront because that did seem more sort of in keeping with the original spirit of wanting to make sure that the Legislature was aware if those changes were made. Does that help?

Yeah, absolutely it does. And then on the second recommendation, provide the authority to use the requested or similar classification. Now that because it relates to hiring and compensating sufficiently qualified staff that would have some level of budgetary component to it to be able to implement that recommendation, it could cause a budget increase, so to speak.

They're already requesting the funding for those specific classes classification that they want to use. So it's already within the amount that's proposed, as I understand it, and correct me if I'm wrong, it's already within the amount that the OIG is proposing. It's just that technically, so they're requesting access to a classification that they technically don't have access to at this moment, they're requesting funding for that position. So, and there's a whole college r process behind that, as I understand it.

Basically, they want to use a classification that's not a standard state classification, and they want to use sort of a, you know, basically Department specific classification. And to use that, they either need specific authorization from Calhr or, or from Calhr. And the authorizing or the owning, they call it, I guess, the owning Department, which is the Department that has, that has created that specific classification.

So I don't know if that helps, but as I understand it, they wouldn't need additional funding beyond what's in this request to use that classification. Now, of course, if it was the Legislature gave broad authority for them to create their own classifications, who knows what will happen in the future? It's always possible that they could need additional positions, and maybe those would be more expensive. But as I understand, at least for budget year, there wouldn't be any kind of cost implication.

If it's not through budget, how would the Legislature ensure that you can use that classification? Or is it purely an internal issue within the Administration?

Yeah, I can respond to that. So there's a bit of history here. So every other audit organization and OIG office in California has access to these higher level audit classifications beyond these, the base ones that we have access to. When I first took office, I reached out and requested from those departments access to those, and I got told no. And I fine with that because they said, hey, we're playing in the same pool here for the same people.

Why would I voluntarily give up that classification to you? We are working with CalHR to get approval for classifications, maybe even designing some of our own. What we've learned over time is that that can take years. And there are questions that need answered to the Legislature right now. There's questions about the project to put ourselves in equal competitive footing.

I appreciate Leo's recommendations to give us statutory access to classifications that would help us accelerate the development of our office and accelerate the answers to the questions that the Legislature needs. Did that answer your question?

It absolutely did. Thank you so much. I support, you know, all the recommendations that you've provided as it relates to this office. And I think it's important, as the chair noted, is that you won't get any pushback from us here in regard to this. This is extremely important.

And, you know, Legislature sessions of previous is the one that instituted this, recognizing the issues as it related to high speed rail, and at the same time, recognizing the desire that that project may move forward in a way that benefited all Californians as well as our budgets. And that's super impactful. And finish with my questions. Thank you, chair.

Thank you, Assembly Member.

Thank you. And along a similar vein, as our chair noted, the Assembly and I think the Legislature as a whole is really prioritizing our oversight role or focus on accountability just in General. And I think particularly when it comes to high speed rail. And that's why you are sitting here, and we're grateful to have you in this role.

But it is so, so important that as we're standing this office up, that we're doing so in a way that gives you the Independence, the authority and the staff to actually do that job for the people of California. And so I, too, think, I think that the LAO's recommendations are spot on. And I guess my question then would be, does the Administration, I'm not sure. Who the right person is to ask. Does the Administration have concerns about those recommendations? Because I think that that's what we will be advocating for as we move into the budget negotiations.

Department of Finances is the administration's representative.

Here today, Matthew Macedo, Department of Finance good morning, Mister chair Members. Just want to address some of the Leo's points and some other things that were brought up. First, regarding the temporary nature of the four positions. This is a new Department and so finance feels that the workload for all the positions may be justified, but we don't have established workload and so it's a challenge to determine exactly how many positions are needed.

I recognize Mister Belknap has an extensive career as an Auditor and knows what he's doing on that level, but it's still difficult to determine an exact level of workload intensity and hours required. So finance didn't want to establish positions that potentially have little to do. Daily and temporary positions offer the flexibility needed to determine total workload, and their temporary nature will be reevaluated based on Mister Belknap's work plan that he will be conducting on an annual basis, as he stated.

Secondly, on the statutory authority to provide access to certain position classifications, generally finance, as opposed to creating granting specific departments additional authorities that would remove them from the California Department of Human Resources existing purview. Allowing statutory exemptions to college SARS exceptional allocation process would set an inappropriate precedent.

This proposal does not consider potential pitfalls, including pay compaction, salary determination for Department specific classes, bargaining, unit representation, and other employee compensation and personnel issues that are weighed by CaLHR during its review of exceptional allocations of Department specific classifications.

Furthermore, the HSR OAG has several options under existing statute, including working with CALHR to go through the exceptional allocation process or going through the harvest memo process to determine if specific Department specific compensation policies are needed to address are necessary or appropriate from the state's point of view. Thirdly, regarding the tweaks to the provisional budget language and trailer Bill Language finance opposes the proposal by LAO because it impacts internal budget deliberations. Process of negotiation.

Go ahead, continue.

All right, so, and I'm sure this is not your intent, and I'm sure that the way that this has been handled, that thus far is not the intent, but it all feels like a whole big, long, bureaucratic like explanation for what effectively feels like subverting the will of the Legislature, which, as I said, I'm sure is not your intent. But that's how that explanation just landed for me.

And when the Legislature identifies an area of such, frankly, critical deficiency that we think that an Inspector General is warranted and a high priority. It feels as if the Administration should be working in lockstep with the Legislature to honor the intent of that, rather than come up with all, all kinds of, like, little sort of bureaucratic loopholes that effectively subvert that intention.

So I would very strongly urge the Administration to engage with us in a very authentic way so that we can ensure that we stand this office up, because this is, I mean, I hear about the high speed rail at every community meeting I have since the day I was elected six years ago. So we have got to authentically engage in getting this project on track and identifying problems and resolving them.

Thanks, chair. Can I ask a follow up question? Assemblymember Wilson, you noted that to statutorily, allow access to classification would be unprecedented. I just want to make sure I understood that clearly. Okay. Because it's not been done in any other way.

I believe there may be one Department that exists that has that authority, and.

Noting that a lot of this particular office, IG office for high speed rail, a lot of what you have was done statutorily, is that not correct in comparison to other IG offices, a lot of the power that they have?

Well, each Department is sort of created statutorily. And so when, when previous Legislature enacted the Bill, it sort of created the Department based on other oigs and other departments that exist. So I would say no, there. Their existence in statute is not unprecedented. Other departments and other oigs exist the same way in statute.

Some of their. I thought some of their authority was. Is that not some of the authority that they particular. I guess the office of. Yes, OIG exists because of statute. I just thought, I thought I heard.

And it wasn't here during the time that it was created, of course, I thought I heard that there were certain aspects of what they have were in statute, and that was unprecedented in regard to the certain authorities they have that maybe others might have by virtue of granting by the Administration or, you know, part of a process. But these were actually put in statute.

I would say no, that they, the HSRoig has specific duties outlined in statute, but I would say that even the California State Auditor, for example, has broader authority than this OAG does.

Okay.

Yeah, I just wanted to add a couple things, if I might. So, for example, in my understanding, and of course, Mister Belknap has worked at the Auditor's office for a lengthy period of time, so he can comment on as well on this.

But my understanding is that the State Auditor has the authority to create its own classifications, and basically, the language, some of the language that the OIG, I think has would be helpful to them is language that would actually already exist in law for the State Auditor. So there's at least one precedent and one precedent in that sense. I don't know if there are others throughout the state, but I think to your other point, I think, I guess I have a couple comments. So I think that.

That, as least as I'm aware, some of the other oigs are listed in statute. I think the Legislature, specifically for this OIG, wanted to make sure it was especially independent. So there are different models for Oigs, sort of throughout government, and some of them are actually within the Department. Sometimes there's an Inspector General within the Department, sometimes it's within the agency. In some cases, it's just not quite as separate and independent.

And my understanding was that the Legislature really prioritized Independence when it created this particular OIG. And there are a lot of aspects of sort of how that was done in the law, and it also created some language that really, at least to me, suggested some intent that the OIG have the ability to hire the needed people.

There's some language in statute that requires OIG to select, appoint, and employ officers and employees necessary to carry out its functions, and requires that the OIG ensure that those officers have the requisite training and experience. It's broad sort of language. So I think the challenge, at least as I understand it, and again, Mister Belknap, should correct me if I'm wrong, but my understanding is that that's not seen as strong enough to allow the OIG to actually kind of just go outside of the typical process.

And so I think that's the reason for some specific language that would provide that. I don't know if that's helpful context. So there is some statute in some other areas for other oigs, but this one really, I think, was modeled to be on the stronger side, given the importance of this project and the oversight and some of the challenges the project has had, and just the amount of money that's involved in this project, and the stakes, which are really high, as the Legislature knows, through the chair.

So because of that intent of its Independence, would you say that if the Legislature was to enact in statute access or the ability to create classification, are we setting a sep for unprecedented situation that could be applied for every single time we create, or every single time an IG is created, they would have to have this thing that we give to the state auditorium.

I mean, I don't think you would have to. I think, I think certainly, you know, certainly would be something that would be looked at in establishing that Oig. The Legislature could look at this model and decide, is this a model that's working? Do you want to do this again? Do you want to do a different model? I think that was part of the process.

As I understand it, when this one was created, was kind of looking at the other models of Oigs that the state has and that other, that both state government has as well as that are, you know, in place in the state and other places and trying to kind of choose from among them and thinking about those things.

But, you know, of course, now that the OIG is getting up and running, they're sort of encountering the practical realities of, like, you know, some of these details of, zero, we actually want to use this specific Auditor classification. Some of the things that perhaps were not necessarily apparent, you know, when the language was being crafted, because they're just such sort of specific details that I think that they probably weren't the main area of focus when the legislation was being crafted is my sense. But if there's anything else that anyone wants to add on any of those points.

Thank you.

I'll let you add on after I speak, if you have anything. And the same thing with the Department of Finance. I want to pull back and ask ourselves, the fundamental question is we want great oversight. And how do you get great oversight? You have people who are passionate about their job, and you don't want somebody who goes, zero, this is just my job. At 05:00 I'm done, and I'm thinking about my next career, etcetera. For oversight like this, you need people who are really professional.

They know how to be like LAO, quite frankly. Look how much value we get just right now from the Lao's office. People that are professional, they're not confrontational, they're not combative, but they also don't get pushed around. And they have a passion, and that passion delivers us. So we need 15 people who are taking on an enormous project, which is this high speed rail project that has gotten off track, pardon the pun, multiple times. Right. And how do we get those people?

And so I have to say to the Department of Finance and hope that you'll respectfully say this, you'll take this back. The Administration, I think you're going to find the Assembly very committed to the recommendations of the Leo, and it is tone deaf to not recognize what it sounds like when you say, zero, we want the positions to be temporary because, you know, for budgetary reasons that we don't know exactly what the work is, when in fact, everybody knows.

You can't get that patient at person to come here for a temporary position. You can't get as patient a person probably to come, you can't get as qualified of an Auditor to hear some of the departments say, why should I create this classification for you? Because now you'll be competing with those same people that I'm trying to hire. There is a shortage of quality auditors out there right now, today. So that's the applause. Just perfect timing, right? I was looking for that. Right. So.

So I want to emphasize how strongly these Lao recommendations seem. I hope that we don't have a battle over this. It just doesn't make sense. It's such a specialized Department. The idea that this could set some terrible precedent for the State of California when it is such a specialized Department doesn't strike me as a real.

The idea that the budget savings of making these positions temporary versus permanent when we're talking about a Department of 15 doesn't also strike me as reining true in terms of common sense. The idea that we don't have firm guidelines on how we are notified about a change that we've asked to be notified about just doesn't make comments as this is not a fight worth having in my mind. But, so I'm going to let you answer two questions that I have.

If you oppose statutory authorization and if you have any belief that he has a difficult job and he's got to get going, he can't wait three years to go through the normal review process and get approval for this change. What do you guys have in mind for speeding up the authorization if we don't take the bull by the horns and do it statutorily?

I certainly appreciate the position Mister Belknap is in. He's trying to build a new office. He's under strict scrutiny from the Legislature, from the public. All I would say is that there are existing positions that exist that he could hire. It's just that the specific positions that we would be requesting exemption for are just paid a little more. And I think those classifications exist for a reason, and they are only accessible to certain auditing departments for a reason.

And all we are saying is that we should go through the existing process to sort of weigh the pros and cons of granting exemption or not, of.

Whether this Department is worthy of this. And that process takes a long period of time and that is, and this Department is in need of pulling itself together. Thank you. Thank you. I appreciate that. My next question for you. If the Legislature approves this BCP which has these positions right, isn't it a violation of the law if the Administration doesn't allow the classification?

It is not. We will establish those sort of existing ones that we were talking about. And the funding will be sort of accessible should. Should the calhr process go through. And he does get access to them. But if he doesn't, we'll establish some of the other classifications and the money will be saved out and reverted back to the PTA.

What positions would they be allowed to fill?

I'd have to get back to you on that. Or maybe Mister Belknap knows exactly which ones.

Well, now it's time to turn to you. I wanted to let you kind of have the end.

Thank you, Mister chair. So the answer to question would be a middle tier Auditor classification. Those upper end classifications we wouldn't have access to. There are two tiers, one very Low end, one middle, and then upper. We don't have access to upper. I want to do a little side. This has been a very productive conversation. I hope that nothing about this conversation gives you the indication that we haven't had very good relationship and conversations with DOF. In so many ways.

Mister Peterson and Mister Macedo have been helpful in setting up this office. We are talking about the one or two areas of conflict that reasonable people can disagree on. And I would have to say that Mister Masito has been incredibly reasonable throughout this process. So I hope you don't get the impression that we've been bickering, because we've not. It's been very good relationship.

The only thing that we're asking that my office is asking is that we have the ability to match the other classifications that other auditing entities are using. So I don't know what kind of precedent that is. The President would be the authority. But to match something that's already been established, we're not trying to exceed their pay scales. We just want to match them so we can compete now, not a year or two from now. That's all we're asking for.

Thank you. Assembly Member

Yeah, I have to agree, because part of the comment that you gave is that once calhr or the process determines that it's because they're available only. I think the phrasing you use that I wrote down with quotes only acceptable for a reason, which it seems like the Legislature had already established the reason why those would be appropriate given the fact that we created the OIG with the level of Independence that it has, and as well as this is a mega project, we have significant budgets in the state, pretty huge, and most of them are in transportation, which is why there's a whole hearing on just transportation today.

And this project is extremely significant for the future of California and for not only us who will be alive once this gets it's done, but the generations to come. And it is first, really in our nation. And the amount of dollars that are flowing through on this project require the expertise that an independent OIG says that they require. And I think that's the spirit that the Legislature brought this forth in.

And so the fact that through there as a process where it's determined only acceptable for a reason and that would take multiple years, is concerning to me. And so I'll do whatever in my power as current transportation chair to be able to see if we can get that taken care of.

I look forward to working with you because this is a pretty important topic in Independence. I'm just going to sweep around one more time with people with any concluding comments. Any concluding comments? Lao nothing to add to Department of Finance right. All right. I appreciate the professionalism you've displayed today. I recognize that the Administration isn't just anti, any kind of oversight at all, but that you have issues and concerns. I appreciate you being able to honestly hear that.

It sounds like you're tone deaf on a couple of things, but that's offered in a professional, quite frankly, in a professional guidance and Assembly Member Peter Norris pointed out, this is how it sounds to me. Right. And I'm saying that's how it sounds to me. It's not the fight worth having. I hope we can go forward, wish you great success. And I want to reemphasize the value of us feeling like you will come to us anytime you feel like you have something you need to communicate.

And I would think in particular to the transportation chair and myself, since your budget comes through here and your policy issues go through. Assemblymember Wilson, thank you all very much. It's been very helpful. Really appreciate the professionalism of everybody here today. Thank you. And we will now jump to motor vehicle account, and while they. I've got it. I'll be right back.

Before we begin, I want to, I just wanted to, I had this thought and that is 80 Members in the Assembly. There are very few things that unify all of us. I think maybe this is one topic that we just covered that probably does unify virtually 80 of us, but motor vehicle accounts Fund solvency Good Morning Mister.

Chair Members Bowen Peterson Department of Finance so the motor Vehicle account provides funding to enforce the rules and regulations of the vehicle code and the use of vehicles on highways. The NVA continues to face operational shortfalls where expenditures are outpacing revenues. Since last May revision, the revenue has increased $134 million over expectations from 2022-23 to 2024-25. However, new car sales and registration renewals continue to slow overall, affecting the revenue growth.

Total revenue in 2024 to 25 is expected expected to be about $4.9 billion, with the main sources of that being an annual $71 vehicle registration fee and a $32 chp fee. Expenditures are expected to be $5 billion, with CHP spending about 3 billion and DMV spending about $1.4 billion. The 2024 to 25 MBA Fund balance is expected to be about $53 million and I will be happy to answer any questions you may have.

Thank you LAO thank you Luke Koushmaro. With the Legislative Analyst Office as Department of Finance noted, expenditures are outpacing revenues and as a result of this structural imbalance, the NVA is projected to become insolvent beginning in 2025-2026. In recent years, this expenditure has outpaced revenues by about eight percentage points. Major drivers include the replacement of CHP and DMV field office, which is a temporary expenditure increased employee compensation costs, which the state currently has limited ability to control.

And the reason for this limited control is that for more than 40 years, statute has based CHP officer compensation on the average of five specific jurisdictions in the Bay Areas in Southern California and what they pay their sworn officers.

Because the pay increases for the CHP officers is wholly dependent on decisions made by these five local governments, the state has limited control and pay increases could be higher or lower than the assumptions, which could move the date when the Fund becomes insolvent, either sooner or potentially push it back depending on what these individual jurisdictions do.

In addition, workload associated with a new driver's license and ID cards that comply with federal state standards has been a source of expenditures and supplemental pension payments related to a 2017 to 2018 budget action. The state has undertaken past efforts to bolster the Fund. Examples include any practice of transferring about 90 million annually from the MVA to the General Fund and allowing registration fees to be adjusted annually to account for inflation. However, the expenditures have grown faster than inflation.

We recommend that the Legislature consider MVA cost pressures when evaluating new spending proposals. We note that the Governor proposes spending about 22 million in 2024-25 and 14 million ongoing in new funding proposals and then until a plan is put into place to address the NVA's structural deficit. We suggest that the Legislature set a high bar for considering whether to approve such proposals. In addition, we recommend that the Legislature develop a plan to ensure the Fund remains solvent.

In order to do so, expenditures and revenues must be brought into balance. As such, we recommend the Legislature develop a plan to address the structural deficit on an ongoing basis, such as by increasing the sustainability of the funding. So revenue increases such as a fee increase in vehicle registration fees, reducing MVA's costs, or some combination of these strategies.

The Legislature will want to consider trade offs involved in these for example, for every $1 increase in the vehicle registration fees, the MVA revenues would increase by about $36 million. However, this would result in increased costs for households and businesses that own vehicles. Similarly, reducing costs would also have trade offs, notably, that it would reduce service levels, which could affect public satisfaction in the case of the DMV and public safety in the case of CHP because it would result in reduced enforcement.

In addition, we recommend that the Legislature consider cost pressures, impacts from employee compensation, both in terms of how to absorb future increases as employee compensation rises to help ensure the Fund doesn't become insolvent again in the future, and also to consider potentially changing the methodology for setting CHP officer pay to increase the state's flexibility. We also recommend considering the MVA Fund condition when evaluating future memorandums and understanding negotiated between the Administration and the bargaining units representing DMV and CHP employees. Thank you.

Thank you. Assembly Member questions?

And just so I'm clear, what are you, you've given us, you know, some options to consider. Are there any sort of specific recommendations moving forward or. We're in the kind of considering options phase right now.

We just put forward options for consideration. There are a few different approaches. We note that the Fund is expected to remain solvent through the budget year, but we, we recommend taking action sooner or later.

Yeah, certainly. And I would agree that we want to, I think, confront this problem now rather than let it metastasize. I would, I guess I would just, I would caution against our throwing out sort of a 40 year history of the way that CHP officers are compensated.

I think that could potentially lead to picking up on the conversation we just had, if you're not setting a salary range that's competitive with other agencies, we talked about the Inspector General earlier needing to be competitive with other Auditor positions. In the same way, we need to make sure that the CHP is able to be competitive with other law enforcement agencies, I think, which is the source of that formula to begin with.

So I know the conversation will continue, but I want us to, I think, pause before we think that's an easy solution to solving this problem.

Assembly Member Wilson

I'm just taking it. All in as it relates to the insolvency factor. I appreciate some of the recommendations that are given to be able to deal with this. I'm concerned that even with those, I'm concerned if we even take those, will it do what it needs to do? Because it's really a long term issue. And so I don't have any questions in regard to it, but just know that it's something that I think is of great importance.

And as I consider in my policy role, consider bills, it's top of mind for every Bill that wants to draw on that or inadvertently, because most of the times it's an inadvertent draw. And so just knowing that, I recognize it is as an issue. I appreciate the recommendations. I think some I see political will within our body to take advantage of, some I don't, but also feel like we likely need to have more done.

So, one other question. So it feels like in a situation where we appear to have a structural deficit and we're going to need to figure out a way to close this gap sooner than later, this is perhaps not the time for us to add new spending. I think our consultant just highlighted. I guess it's, there's a, the governor's proposal includes 22,000,001 time, 14 million ongoing new spending. Is that correct?

Do you want to walk us through, I guess, both the details of those proposals and why you would be suggesting that we add additional expenditures to a Fund that is headed towards insolvency?

Department of Finance .

So most of the proposals that we are proposing are to Fund ongoing existing it projects that are able to support DMV's modernization efforts. So by not following through with these, we would result in stopping them in the middle of their construction, which we did not feel appropriate. And this would additionally delay the projects, resulting in greater total project costs due to cost escalation.

Okay. So while it presents as new, you're, if I understand what you said correctly, it's not so much a new, it's not a new project. It's the completion of an existing project.

Okay. So pulling back and trying to look at the big picture again, we in the State of California try to Fund and the services associated with the DMV and the California Highway Patrol, with the users that use the highways and use the roads out there. In terms of trying to do that, we simply have a mismatch between those two with that goal. We have a mismatch between revenues and expenditures. This mismatch has been known for a long time in the Legislature.

And we, as we keep patching together some solutions, I'm going to suggest that the best goal for us is to try to not just patch a couple of year solution on, but instead actually look at this holistically and go, what is the solution? Because everything is difficult, even politically difficult, until it's not. Everything can't be done until it can be done. And that's really, you know, we can kick this can down the road by coming up with some patchwork solutions.

I would encourage us to instead say, let's try. But to roll up our sleeves and really do that would require both the Assembly, the Senate and the Governor to be on board because these are obviously really challenging issues or they would have been solved. They would have been solved by now. So this is the initial comment that I'll make about starting.

I realize that's a big project to sort of say, how do we get ourselves to the spot where we have a sustainable revenue and expenditure outline, which means you have to talk about, you know, lots of difficult things. We won't get that all done for this budget, you know, this time. But this is, this is, in my mind, the beginning of asking to have that conversation.

And I think it's really appropriate to have the transportation chair nodding her head, going, we would be better off, people in California would be better off if we came up with a long term solution to this mismatch between revenue and expenditures than if we just come up with a patchwork solution. Politically, it's much easier to come up with a patchwork solution. Right. And we all recognize that.

So we will be, I will be talking to the Assembly leadership about that and see to what extent they're interested. And I hope my colleague will join me in sort of having that conversation as we go forward. That being said, I want to compliment Lao for analyzing, putting out all the options. You know, those are options that are fundamental.

If we are going to try to do anything more than kick the can down the road with patchwork solutions, whether that all comes together politically or not, but at least it's been objectively put up front. I do have this question for, you know, for the Administration, we recognize the problem that it's going to be, become insolvent. What is the administration's plan? So we don't wait until next year when we are literally in the crisis of insolvency.

Does the Administration have a plan to deal with insolvency at this point in time that you, even though we recognize it's a short term, kick the can down the road kind of. What is that plan? Is there one yet?

Yeah. So we're consistently monitoring the condition of the Fund and exploring options to lower expenditures and or increase revenues. But I also do want to note that the values we have are currently based off of forecasts that in the past have been tighter balances than what was expected. So currently we are projected to be insolvent with the negative $141 million in 2526. But that is subject to change with forecasting.

So part of what you want to do is see if the forecasts are accurate or not. And before you make, before you come up with any additional plans with regard to this.

Great. Okay. All right. So we all know, be upfront. We just all know where we are. We're hoping that the forecasts are wrong and that we actually have more money and that, in fact, revenues and expenditures are there. We realistically all know that. Probably not very likely to be the case. Right. And we all have work to do. We have a year basically to work on it.

We're probably far better off if we start now than if we start next April or May, to say, what are we going to do about this crisis? So that's an open invitation, at least from this Committee, I hope with this Committee's authorization to begin those conversations, and we'll have to talk to the Assembly leadership about that. All right. Thank you very much. Appreciate it. Issue seven ports and freight infrastructure program trailer Bill whenever you're ready.

Good morning. Chair Carlos Quant again, California State Transportation Agency. I'll be presenting the administration's trailer Bill proposal for the Port and Freight Infrastructure program, or in other words, the PFIT program. The 2022 budget agreement included $1.2 billion for investments in supply chain resiliency and port and freight infrastructure, which included 600 million in 2022 to 23, with the remaining 600 million planned for appropriation in 2023 to 24.

However, since that time, the PFIT budget has been modified as a result of being one of many solutions to address the revenue shortfalls that we've had over the last several last couple of years. Specifically, the anticipated 2023 PFIP appropriation has been spread across several fiscal years, have aligned the expected expenditures with the budget. Essentially, as a result of the PFIP budget changes, PFIP grant awardees have started requesting letters of no prejudice.

Letters of no prejudice formally notify grant awardees that they may use their own funding to start work on their PFIP projects before PFIP grant funding is available for reimbursement. The letters provide grant awardees with an assurance that costs they've incurred on their PFIT projects will be eligible for reimbursement from future monies available from the program, subject to appropriation from the Legislature, of course.

Importantly excuse me, grant awardees that request a letter of no prejudice are generally ready to begin work on their projects and are willing to advance their own funds before grant funding has been appropriated for cost reimbursement. Importantly, letters of no prejudice also allow grant awardees to begin work on their projects at current market costs instead of having to wait for the grant funding to start their projects.

This is important because project delays usually result in higher project costs, especially in an inflationary economic environment which could jeopardize the projects. The administration's trailer Bill proposal would authorize Cal State to issue letters of no prejudice to PFIP grant awardees and is necessary to implement the Governor's Budget cash management solution to shift the availability of 100 million in PFIT funding from 2024 to 25 to 2026 to 27, which was also adopted as part of the early budget agreement between the Legislature and Administration.

The trailer Bill also includes a request for an exemption of the Administrative Procedures act, which is necessary to allow CalsTA to move expeditiously to issue letters of no prejudice to PIFA grant awardees to avoid project delays. To the extent the APA exemption is denied, the PFIP letters of no prejudice guidelines would be subject to the regulations process, which could be lengthy and protracted, taking approximately one year to complete.

Grant awardees would have to wait until the regulations process was complete to receive a letter of no prejudice and risk increased costs from this delay. Other statutes granting the ability to issue letters of no prejudice provide for the creation of guidelines with a public comment process. This method balances the need for agility with public input and transparency. For these reasons, CaLSTR requests approval of the trailer Bill Language as submitted. My colleagues and I are available to respond to any questions that you may have. Thank you.

Thank you. Department of Finance

Ted Dot in Department of Finance. We don't have any additional comment, but ready for any question. Thank you.

We have not raised concerns with this proposal.

Thank you so, Assembly Member.

My only question Is it feels like policy, and so why not put this forward through policy, through a Bill or an author?

Thank you for the question. So essentially, if we put it through the policy Bill, it's going to have to go through the policy process, which is longer than being able to just issue a letter of no prejudice once we get the requests from the grantees that are ready and able and willing to use their own funding to begin costs in the project.

So in the interest of time to make sure that we can get the project started and avoid any potential delays and increased costs as a result of inflation, we've requested for the exemption. And so when we initially set up this program, it was a one time funding for port and freight infrastructure. Because we had money at the time, we didn't anticipate having to delay the availability of the funding.

And so we basically have, we've come up with the, the language, really to implement the solutions and to be able to quickly be able to get the letters of no prejudice out there to the grant awardees.

So the Legislature last year adopted language with the intent to say we wanted to try to decrease these apas. And what's the administration's thought? Do you want to join the Legislature in trying to decrease the APA?

I would say that we are sensitive to the Legislature's desire to reduce these occurrences. However, for this specific instance, we feel that it's appropriate to have the ability to move as quickly as the grant awardees are able to move.

Could you do it by emergency regulation?

So I believe the emergency regulations process, it's anywhere from six months to a year. So it would just cause a further delay. So we certainly could. It's just that it could potentially increase costs as a result of the delays.

So do you think this is more like an isolated situation and also the circumstances just call for this?

Yes, I would absolutely agree with that.

Our staff doesn't and is recommending that we go without the Administrative Procedure act exemption. As you, as you know, that's what's written up in the report. So I think we look forward to having further conversations with you about the staff recommendation in terms of what we should do.

Happy to have further conversations.

Thank you. Yeah.

Do the chair one follow up.

We'll have more conversations about whether the fact that this Bill would go effect in January and it's not until July, and so the six months you would have the six months to be able to do this and stuff. So we will have further conversations about that.

Assembly Member, last question, just to make sure I understand. You talked about thinking it was one time funding and you've had multiple iterations of this. This allows it forever, right? It's not just related to this year issue of 100 million, it's a part of this program. You always will be able to do this, right?

Yes, that's correct. I would just note that it was one time funding, so we don't have any more funding. There's no ongoing funding associated with the program. So unless the Legislature appropriated additional funding, then the program ends, assuming as the.

Funding, the funding runs out. So you're saying the language in here that talks about that specifies you can do this letter for the port and freight infrastructure program? If it's no, if the funds are exhausted, then that authority is exhausted with the funds.

The statutory authority would remain. So to the extent that additional funding was appropriated, then it would also apply to that as well.

Okay. And that's what I was wondering. So it is in perpetuity. So whenever there's funding related to this, anytime this program is funded, even though there was one time funding, now, anytime this program is funded, you always have the authority to issue these letters. Okay, thanks.

Hey, thank you very much. We appreciate the responses, everybody. And we are at non presentation items. Anything on non presentation items. Great. And so we will now turn this over to public comment. Thank you, everybody. I'll put up a finger of one, which means your 1 minute is up speakers, when you see that, if you'll conclude, please. Thank you.

Thank you, chair. Just real briefly, I want to talk or address myself to the issue of potentially backfilling state highway account funds for the displaced ATP funds. I represent transportation California. My name is Mark Watts and the organization I represent were sponsors of SB 1, along with a number of other folks. And we feel that the movement this year to potentially backfill is kind of avoiding a commitment we think we made to the voters when we put SB 1 together.

We defeated and passed two SB different propositions on the heels of the approval of of 1. And we feel that the voters were looking forward to the rehabilitation reconstruction that we needed. I'll get close to it. Caltrans has done a very good job of committing a reservation for ATP and complete streets within their shop program. I realize that doesn't help local governments other than the conventional highway segments, but it is. Thank you.

Hello, chair. Jeanne Ward-Waller with fearless advocacy on behalf of Calbike transform and the leadership Council for Justice and Accountability. I want to also speak to the ATP item and thank you for the questions and to your comments earlier and to the Assembly for supporting this program. It's a highly popular program. We have 10 years of history of grants that are making a big difference in improving walking and bicycling in the state. We recommend backfilling with state highway account funds. We think that's the right solution.

It's what you agreed to in the budget last year. And contrary to the previous speaker, that budget is bigger than ever because of federal formula funds from the bipartisan infrastructure law. This is the time to do that. It's a small portion of the Caltrans shop, but it's almost a full year of continuous appropriation that program, so it makes a huge difference. You recognized it's an important climate change program and also we have more fatalities on our system for pedestrians and bicycles than ever before. We're in a crisis so we're need these gonna projects. Thank you.

Thank you.

Dear Chair Bennett, I'm Sofia Rafikova, the Coalition for Clean Air, and I speak along with 21 other health, equity, environmental, environmental, justice, labor and faith groups who all joined in a letter asking you to restore funding for transit, active transportation and ZEB programs for the sake of our most vulnerable communities who suffer from the effects of worsening air quality and climate crisis.

And we especially align our comments with the comments you made earlier today on the ATP program and urge you to restore the 200 million cut to the ATP program in the Governor's Budget. This program funds more accessible and affordable transportation options, making it vital for Californians who cannot afford or are unable to drive. And one solution is suggested in your staff report is to backfill the proposed cut with the state highway account funds as was done last year.

And this could also be used to backfill the competitive funding for the TRECP program. And while the current current proposal suggests backfilling some of that funding using GGRF funds, if you use the SHA instead, those GGRF funds would be freed up to serve disadvantaged and Low income communities with investments in heavy duty zebzef infrastructure and claimability options. Thank you.

Thank you. Thank you, Mister Chairman, staff pleasure to be here. Aaron Reed, representing California Association of Highway Patrolmen were opposed vigorously to the Lao recommendation to modify the salary formula. That formula has been in law not 40 years, 50 years. This year, 50 years, 1974. That Bill was signed by Governor Reagan. The author was speaker Willie Brown. He carried a second Bill 20 years later to modify it slightly again. Author, Assembly Member and speaker Will Brown.

It has helped us recruit, but we have a serious problem. We have almost 1000 vacancies now and it's been plaguing us for the last several years. You augmented the budget of CHP a year ago to give them extra money for recruitment. It hasn't really helped all that much. We still have a serious vacancy problem. And let me also add that the five jurisdictions that we're tied to do not make us the highest paid in the state by any means.

If you take the 100 top agencies, cities, sheriff's departments, PD's, and the top 100, we're about in the middle. Okay. Thank you.

Good afternoon. Afternoon. Good morning. Still Mister chair Members Alchemy Graham with the California Transit Association on issues 1 and 2, and then non presentation issue number nine. So first I'd like to register the Association's support and sincere thanks for the legislation. Excuse me, Association support and sincere thanks for the Legislature's support of the TARCP in the early action budget.

The early action budget honors the commitment made in last year's budget and maintains the $5.1 billion investment in the TIRCP, while extending the timeline of the funding by one year. This funding will enable transit agencies statewide to keep essential services running and deliver major capital projects. I'd also like to take a second to provide a correction. Just for the record, the Committee analysis notes that the funds have not yet been committed to agencies by their respective regions.

Regions have all developed and submitted plans to the state that commit the funding to agencies and are simply awaiting approval of these plans by Cal STA. On issue number two, we acknowledge that many agencies within our membership have taken advantage of Cal ITP. We're still evaluating the proposal and we'll follow up with in the near term on issue nine. We'd simply like to offer our support. Thank you.

Thank you very much.

Okay. I'm so sorry. Seeing that there's no one else. I have one more for a different client, if that's okay. On behalf of the California City Transportation initiative, echoing previous comments on the ATP. Thank you.

And with that, no other public testimony, we'll adjourn this meeting and thank everybody for their participation. Appreciate it.