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<br />8A <br />Page 2 <br /> <br />'Transportation' Continued from Page 1... <br /> <br />While the President-Elect has not yet publicly announced the total amount of his proposed plans, <br />his office has indicated it will be between $675 billion and $800 billion. Early in the week, Obama <br />met with Congressional leadership and encouraged them to act quickly to pass a plan. He also <br />asked that no earmarks be included in the bill. Acknowledging the extraordinary amount of money <br />needed to get the economy on track, he indicated an oversight board would be created to identify <br />and solve problems early in the process in order to make sure the money is not misspent. <br /> <br />Alternative Approaches Discussed for Transportation Funding <br /> <br />Even before details of the plan began to be released, California began preparing for a sudden <br />influx of money. Cities across the state have been working with the League, California <br />Department of Transportation (Caltrans) and other government agencies in their regions to <br />compile information on projects that are "shovel ready" and for which contracts can be quickly <br />executed. <br /> <br />League staff is participating in meetings with state agencies and other interested parties to review <br />current state law in order to ensure that the state is able to allocate and distribute any funds <br />received in a timely manner. Current law sometimes requires that funds be routed through <br />several other funds and agencies before it actually is received by the agency that will spend the <br />funds. In some cases, a competitive process is required before funds are allocated. <br /> <br />An example of a situation where state law may need to be revised is in the area of transportation. <br />In mid-December, Caltrans convened a working group to begin preparing for the implementation <br />of a federal economic stimulus plan. The working group has been discussing the best manner to <br />get transportation dollars to the agencies that will be putting the dollars to work. The following two <br />proposals have emerged from the discussions. <br /> <br />Proposal A: A Regional Approach. The California Association of Councils of Governments <br />(CALCOG) supports allocating the funds using the existing Surface Transportation Program <br />(STP) formula. Under this proposal, the regional transportation agencies would receive 62.5 <br />percent of the funds, and Caltrans would receive the remaining 37.5 percent. CALCOG maintains <br />that the existing program works, and that is the best system to get the funds committed quickly. <br />Some cities and counties are concerned with this approach because there would not be a direct <br />or committed allocation to cities and counties. <br /> <br />Proposal B: Direct Allocation to Cities and Counties. In the second proposal, funds will be <br />split evenly among 1) Caltrans, 2} regional agencies. and 3) cities and counties. In order to <br />simplify the process, the California Transportation Commission (CTC) would be given the <br />authority to distribute the funds to the regions, cities, and counties, as well as the responsibility to <br />report to the federal Department of Transportation what projects will be funded. It has been <br />suggested that under this plan, cities and counties could "loan" their federal economic stimulus <br />money to Caltrans. Caltrans would use the funds immediately to backfill projects that are in <br />jeopardy of being shut down mid-project due to the fiscal conditions in California. Cities and <br />counties would then be paid back with other Prop. 1 B funds once the state is able to sell bonds <br />again. The funds would be an augmentation to Prop. 1 B. and allocated using the same formula <br />as Prop. 1 B. <br /> <br />The League and California State Association of Counties (CSAC) have been discussing both <br />proposals with public works directors, and Proposal B has some benefits for cities. First. if cities <br />agreed to loan their economic stimulus funds to the state and receive an augmentation totheir <br />Prop. 1 B dollars in return, the funds would be state dollars and would not need to meet federal <br />requirements, including the National Environmental Quality Act (NEPA). Also, the definition of <br />uses under Prop. 1 B is broader than the definition expected in the Federal package. Second, the <br />funds would not have to be contracted in the short timeframes required by the federal package. <br />Third, cities would know in advance the amount of funds they wtll receive and can prepare for <br />their use. Finally, Caltrans would not default on their currently contracted projects, saving the <br />transportation community up to $350 million in penalties. <br /> <br />2 <br />