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1 o. ill TRANSPORTATION CUTS from page 2 .................................... On December 9 the Goverrar took the first step towards implementing this proposal by issuing a proclamation to suspend the fund transfer to transportation as required by the California Constiwtion under Proposition 42, declaring that the 2003-04 transfer of revenues would result in a significant negative fiscal impact on the General Fund. • Deferral of the $550 Million loan Payment The Governor proposes the deferral of $550 million in loan payments the State General Fund owes transportation funds in 2003-04 — loaned last year from the Traffic Congestion Relief Fund and the State Highway ( M. This certainly will require a reexamination of capital projects and potential delays or re- prioritization of STIP, and the 42 capital projects proposed by the Governor in the Traffic Congestion Relief Plan. I a a a a 411119111108110 HOLIDAY ASSIGNMENT: TALK TO YOUR CONGRESSIONAL REPRESENTATIVES! The National Legaue of Cities (NLC) is urging cities to contact their Congressional representatives while those officials are back in their home districts over the holidays. Urge them to include in the final FY 2003 appropriations bills the President's request for $3.5 billion for first responders — and to provide local governments direct access to these bills. Key points for cities to make: As seen on September 11 and in the critical time immediately following, it is local first responders who are on the frontlines in the fight to secure the homeland. California cities neec .1equate funding to protect public safety. In California, local governments have already spent millions of dollars on increased security, preparedness, and emer- gency response costs since September 11 Cities and counties have upgraded security at key public facilities, en- hanced information technology and communications systems, and improved local bioterrorism response capabilities. And Don't Forget Ongoing Needs! Cities are also urged to stress to their federal representatives the importance of preserving federal funds for critical, ongoing programs, such as the COPS program. The concern is that, with Washington primarily focused on national defense needs, funds for ongoing public safety and other critical programs may be seen as a lesser priority. .................... PG &E SAMPLE FRANCHISE FEE UPDATE The League's PG &E working group was extremely disappointed with PG &E's response, dated November 25, to the draft sample agreement sent by the working group to PG &E for their comment. On November 27, the working group and the League consultant met to discuss issues raised by PG &E and provide the consultant with additional direction, should PG &E agree to reopen discussions. The working group determined that if PG &E did not respond and enter into meaningful discussions with the League's consultant by Friday, December 6, discussions would cease and the sample agreement would be finalized and distributed to cities. Last week, PG &E agreed to reopen the discussions and had a lengthy meeting with our consultant on December 4. During that discussion, PG &E indicated that their schedule had changed under the bankruptcy process and that they would instruct the field staff to cease urging city officials to place the agreement on the council agenda. That instruction was to be sent to field representa- tives today, December 9. The League expects to receive written confirmation from PG &E that negotiations are continuing and the process is delayed while they analyze their response on key issues. The League believes there is value in continuing talks and urges cities to remain firm in deferring consideration of any franchise agreement until these negotiations run the full course. Please contact Frances Medema, policy analyst, at medemaf@cacities.org or 916.658 -8218, if you have any questions. Visit the League's Official Web Site-- www.cacities.org PRIORITY FOCUS/PAGE 3