Minutes of November 15, 2012 Commission Meeting

1. Call to Order. The meeting was called to order by Chair Wasserman at the Metro Center Auditorium, 101 Eighth Street, Oakland, CA, at 1:10 p.m.

2. Roll Call. Present were: Chair Wasserman, Vice Chair Halsted, Commissioners Addiego, Apodaca, Bates, Chan (represented by Alternate Gilmore), Chiu, Cortese, Gibbs, Gioia, Jordan Hallinan, Hicks, McGrath, Nelson, Randolph, Sartipi (represented by Alternate McElhinney), Sears, Spering (represented by Alternate Vasquez), Techel, and Wagenknecht. Assembly representative Feldstein was also present.

Chair Wasserman announced that a quorum was present.

Not present were: Sonoma County (Brown), Department of Finance (Finn), Governor’s Appointee (Moy), State Lands Commission (Pemberton), San Mateo County (Pine), Secretary for Resources (Vierra), and U.S. Environmental Protection Agency (Ziegler)

3. Public Comment Period. Chair Wasserman called for public comment on subjects that were not on the agenda. Comments would be restricted to three minutes per speaker.

Seeing no speakers, Chair Wasserman moved on to Item four, Approval of Minutes.

4. Approval of Minutes of the November 1, 2012 Meeting. Chair Wasserman entertained a motion and a second to adopt the minutes of November 1, 2012.

MOTION: Vice Chair Halsted moved, seconded by Commissioner Addiego, to approve the November 1, 2012 Minutes. The motion carried by voice vote with Commissioners McGrath, Vasquez and Apodaca abstaining.

5. Report of the Chair. Chair Wasserman reported on the following:

a. Election Results. In Tuesday’s election Commissioner Tom Bates was reelected Mayor of Berkeley. Commissioner David Chiu was reelected to the San Francisco Board of Supervisors. Commissioner Butt was reelected to the Richmond City Council. I am sure the Commission joins me in congratulating them. Commissioner Valerie Brown chose not to run for reelection to the Sonoma County Board of Supervisors so we shall await the County’s decision regarding who shall be its primary representative on BCDC. Finally, Commissioner Kelly Ferguson is waiting to hear the final results of a close contest.

b. Joint Policy Committee. The Joint Policy Committee, Executive Committee met last Thursday and endorsed a process for developing a regional economic development strategy. The foundation of that strategy, most likely, would be based on the analysis contained in the Bay Area Council Economic Institute’s recent examination of economic trends in our region which is the subject of a briefing today.

c. Commission Strategic Plan Working Group. Our Commissioner working group will meet with BCDC staff next week to discuss possible BCDC strategic goals. There was also a fairly lively and productive discussion at the JPC Executive Committee in which the commitment to work together was increased. The Commissioner working group on the strategic plan will meet with BCDC staff next week to start the process of discussing our goals.

d. Abandoned Vessel Briefing Cancellation. We had planned to have a briefing today on abandoned vessels in the Bay but the staff member presenting this item has been called away on family matters. We will hold this briefing sometime next year. I want to take this moment to thank Commissioner Kate Sears of Marin County who has been very helpful in our efforts to work with local governments and organizations to reduce the number of abandoned vessels in the Bay. Instead, we will hold a briefing on Commission ex parte regulations.

e. Next BCDC Meeting. Our next regularly scheduled meeting will be held on December 6th. At that meeting, which will be held at the Ferry Building in San Francisco, we will take up the following matters:

(1) We expect to hold a public hearing on proposed amendments to the Solano County component of the Suisun Marsh Local Protection Program.

(2) We will consider a permit application for the Department of Fish and Game’s North Bay salt pond restoration.

(3) We will have a briefing from staff regarding on the issues that BCDC staff consider as part of major permit applications, including the Public Trust. I do expect to have a much more extensive discussion in January/February on the current efforts of JPC, other organizations and BCDC staff regarding rising sea level which will be increasingly in our planning efforts.

f. Ex-Parte Communications. That completes my report. It is time for anyone who has had an ex-parte communication since the last meeting which has not been communicated to put it on the record.

I did have a meeting with representatives of Phoenix Commons, a proposed senior development on the Oakland Estuary. They presented their plans to me and the results of the design and review. I also met, pre-application, with some representatives of a senior facility on the Alameda side. I urged them to put a call into BCDC. They have purchased the site of the old Chevy’s Restaurant. They want to build a memory center.

Commissioner Chiu reported: I have had a number of conversations with the Warriors about what will be an application in front of BCDC.

Chair Wasserman moved on to the Executive Director’s Report.

6. Report of the Executive Director. Executive Director Goldzband reported: Today, we meet a week after a slew of exciting elections. Unfortunately, our version of exciting includes more ambiguous news about our move.

As you know, we were working to move the BCDC staff offices to the state building in the San Francisco Civic Center in early 2013. We are continuing to work diligently on the move with DGS and I had a talk with the DGS Director, Fred Klass. I am afraid I do not have any developments to report and we are concerned about where we will be after March of next year. I will keep you apprised as we resolve the situation.

With regard to staffing, I have one important announcement. You heard Chairman Wasserman note that we have changed this meeting’s agenda by dropping the planned briefing on abandoned vessels. This is because BCDC’s Enforcement Chief, Adrienne Klein, has just started an emergency leave of absence. At full strength, the Enforcement program consists of three staff members and one already is on leave. Now we shall be down to one staff member. As such, Brad McCrea, Bob Batha and I shall review the entire regulatory program so that we can prioritize the permit and enforcement work, given the staff resources. I am sure that the three of us will be taking up some of the slack. Please feel free to give us a call regarding any enforcement actions that you might have a question on.

With regard to policy issues, I want to mention a few briefly.

The day after our last meeting representatives of BCDC program staff met with our counterparts from the state Coastal Conservancy. Our goal is to collaborate more readily and, hopefully, ensure that our respective policy objectives mesh with each other’s in the Bay. I am happy to report that we have resolved a couple of outstanding issues and we shall continue to meet quarterly both to address various existing issues and anticipate further ones. Remember that recent legislation authorized the State Coastal Conservancy to perform various sea level rise climate change actions and we want to make sure that we are all in coordination.

As Chairman Wasserman noted, we shall hold our first staff-wide strategic planning session a week after next. This will include participation by our Commissioners’ strategic planning working group. Staff is excited about this process and we are very grateful for the participation by the working group. We shall soon let you know of the date on which we shall hold our annual public strategic planning workshop.

Finally, the Managers of the Long Term Management Strategy, which provides the government-wide coordination under which decisions regarding dredging projects and their disposal for beneficial reuse are made and include the Army Corps, federal EPA, the regional Water Quality Board and BCDC, will hold its fourth in a series of four meetings to review the progress made by LTMS during its initial dozen years in existence. Next year the federal and state agencies will determine a coordination and collaboration strategy going forward. I have a feeling that Colonel Baker might be asked about that process as part of his presentation.

That completes my report and I am happy to respond to any questions or concerns that you may have.

Commissioner McGrath commented: We are meeting as a committee of the Commission with the staff and am I correct in understanding that this is not a public meeting because there is not a quorum of the Commission. My request is, I assume when we do have a strategic planning workshop which is a public meeting, there will be some teeing up of the discussion between the staff and the subcommittee of the Commission so the public has an opportunity to know the broad outlines of the conclusions or issues that were raised.

Chair Wasserman replied: Absolutely. This is not going to be a one-shot or even two-shot effort. The public will have a right to comment and I do envision that at the first public meeting where we discuss it we will not adopt it in final form. The Chair moved on to Item 7.

7. Consideration of Administrative Matters. Executive Director Goldzband stated that on November 2nd we sent you listings of the administrative matters that our staff is prepared to act upon. Bob Batha is available to respond to any questions you may have about the matters on the listing and I am happy to respond to any questions Commissioners may have.

Commissioner Addiego asked: These administrative permits as they apply to dredging; when does it move from an administrative matter to a Commission. Is there a threshold amount?

Ms. Brenda Goeden, a staff member, responded: I am involved with our sediment management program. The threshold for a project going to a major, if it is maintenance dredging as long as it happens within 10 years and there is not a volume limit on it, and it does not have an environmentally adverse impact then we act on it administratively.

If it is newer dredging, if it is over 200,000 cubic yards of dredging then it comes to us as a major. So a project needing widening or deepening or an area that has not had dredging before we would bring before you if it was a significant volume.

Commissioner Addiego inquired further: Is there any testing of the dredged material before it is disposed of?

Ms. Goeden answered: Yes. Basically, BCDC staff and the Army Corps of Engineers, the EPA and the Water Board all sit together every two weeks and review the sampling and analysis results of every project.

Chair Wasserman then introduced Item 8.

8. Briefing by the U.S. Corps of Engineers. Chair Wasserman announced that Item #8 was briefing by Lieutenant Colonel John K. Baker, who is the SF District Commander of the U.S. Army Corps of Engineers (USACE), on the Corps’ mission, its work in the Bay and collaborations with BCDC.

Executive Director Goldzband made some brief introductory remarks: Colonel Baker assumed command of the District this past June. He has held a variety of Engineer District and troop assignments across the United States, three combat tours in Afghanistan and Iraq. He is a registered professional engineer. He graduated from Texas A&M University with a Bachelor of Science in Civil Engineering and earned his Masters Degree from the University of Maryland, is a graduate of the U.S. Army Engineering Officer Basic Course, Infantry Captain’s Career Course, Command and General Staff College, Airborne School and the Ranger School.

I am happy to say that Colonel Baker is a new collaborator with BCDC. It is obvious to those of us that have worked with him that he is not new to strong leadership.

Lieutenant Colonel John K. Baker presented the following: I did grow up in the state of Texas. Both of my parents are retired college professors. I have one brother who is a regulatory biologist with Texas Parks and Wildlife.

I am married and my wife, Rachel, is a former military police officer. She is now a stay-at-home mom and a Ph.D. candidate working on an organizational psychology degree. We have two elementary school-aged boys and we live in Moraga. We are very excited to be here in California for the first time.

I am going to talk to you about the Corps of Engineers and what we do and why. Why is there a military officer standing here in front of you to talk to you about all the things in the San Francisco Bay that have nothing to do with the military mission?

I’ll talk about the national level and what the Corps of Engineers is doing at that level and a little bit about its history. Then I’ll talk about the San Francisco District and how we came into being and what we are doing today.

One of the flyers in front of you is the U.S. Army Corps of Engineers’ Campaign Plan that is fairly fresh off the press from Lieutenant General Bostick, our Chief of Engineers. It describes what we do and our Chief’s vision for execution.

Our mission statement is consistent at every level of the Corps of Engineers. Our mission is to deliver vital, public and military engineering in peace and war, to strengthen our nation’s security, energize the economy and reduce risks from disasters.

Within the federal government the Corps falls under the Department of Defense and we are a 37,000 employee organization, with only about 300 of those employees being uniformed military members. These 37,000 employees are currently serving in over 90 countries around the world. We execute a program of about $36 billion in fiscal year ’12. This budget will be less in the future.

In the United States, we are organized into nine divisions, each of which is led and commanded by a general officer, who are either one or two star commanders. Beneath each of those divisions are a total of 44 Districts. The majority of those divisions are commanded by a full colonel and then nine of those are commanded by lieutenant colonels.

We have two research centers in this country. One is a center for Environment Research and Development. It has a number of labs throughout the country. They do a lot of research and development work that informs not only what the Department of Defense does, but also what our country does.

Then we have a support center also that does a lot of professional development support and other institutional work for the Corps.

The Corps as an agency is a project-funded organization. We spend our customers’ money and federally-appropriated funds but it all goes back to the execution and delivery of projects in one our business lines.

The origin of our mission was military construction, building bases and other things for the military. We also do civil works projects, which has a number of sub-components.

These sub-components include flood risk management; levees and flood protection; navigation and ensuring the flow of commerce; as well as accessibility in our federal ship channels for national defense.

We do a number of environmental missions to include wetlands restoration and environmental sustainability. We also have a regulatory function in which we do permitting and execution of the Clean Water Act. We also have a recreation component, which is a secondary mission of sorts in that it is a byproduct of our flood risk management. As we build a dam to provide some storage capacity to prevent a flood downstream it then creates a lake and a recreational opportunity. There are probably more people across the U.S. that know the Corps for our lakes than know us for a lot of the other things that we do. It is a point of pride with us that we have more visitors to our lakes, facilities and parks than the National Park Service. We have two lakes in the San Francisco District that get approximately one and a half million visitors a year. We also produce hydropower. We are one of the top hydropower producing organizations in the country.

We have a disaster response mission. We have currently about 35 hundred employees on the east coast that are working in response to Hurricane Sandy. And we still have a number of employees that are working in New Orleans, completing what we think is going to be the last $3 to $4 billion of a $15 billion program to provide hurricane risk reduction in the lower Mississippi River area.

The last thing that we do is that we have an international and inter-agency support component. This is what funds and enables us to do a lot of work and provide value to the federal government. Here in the San Francisco area we have a significant amount of work with the Department of Veterans Affairs. We have four ongoing projects at the San Francisco Veterans Affairs Medical Facility. Other Districts do a lot of work with the Customs and Border Protection Agency, Department of Energy and other federal agencies.

There are some ties to France in the Corps’ history. Essayons is the French word we use as our motto. It means, “let us try”. The very first Chief of Engineers and the head of Engineering for the Continental Army working for General George Washington was a gentleman by the name of Louis Duportail and he was also very significant in French military history because he was the Minister of Defense for France during the French Revolution. We did not have any military engineers so we imported him to lead engineering for our military. We also had a gentleman by the name of Francois de Fleury who coined the phrase, “Essayons”. And we have a medal today that we give to distinguished military and civilian employees called the “De Fleury Medal”.

Dating back to 1775 at the battle of Bunker Hill we had the Corps of Engineers working in support of our country’s mission. In 1803, President Thomas Jefferson did a couple of things that were pretty significant. The first thing was the Lewis and Clark Expedition. Lewis and Clark were both Army Engineer officers, one was a lieutenant and the other was a captain. They were commissioned to do a reconnaissance of the Louisiana Purchase and do the subsequent mapping to inform the westward expansion of the United States.

The Corps was deeply involved in the westward expansion of the United States. We were deeply involved in the coastal fortification, as that was very important all the way through World War II.

Even to this day a large component of our mission is Department of Defense installations. Military base closures and restructuring have generated tens of billions of dollars of work for the Corps.

We have supported our global war on terror from the very beginning. Our research and development facility has a 24/7 Reach Back Center and any soldier in the military can call back on an 800 number with a technical question to get an answer.

In 1824 the Supreme Court ruled federal authority covered interstate commerce and Congress passed the General Survey Act. The only engineers in the country were military so we were the first to mark our country for bridges, roads and other critical infrastructure. Navigation began with the construction of the Soo Locks in the 1850, which is in the state of Michigan. All the locks and dams along the Ohio River are maintained by the Corps.

Congress chartered the Mississippi River Commission in 1879 and that included the Army Corps of Engineers. Our mission there was an expansion beyond the banks of the river in that we abandoned the “levees only” policy and adopted the Jadwin Plan that included floodways and spillways. The Flood Control Act was passed in 1936 and after that time that started some of what became a dam race to construct dams. Since 1936 the Corps has built 400 dams in the western United States.

The passing of the Water Resources Development Act in 1986 has placed greater emphasis on non-federal funding and modified the planning and financing of the civil works process.

I will talk briefly about our emergency response mission. In 1882, the Corps received the first formal disaster relief mission to deliver supplies for another Army unit. In 1917, the Army was assigned the disaster response mission and they assigned it to the Corps. In 1950, the Federal Disaster Relief Act was passed and in 1955, Public Law 8499 then funded emergency operations. In the 1980’s the Stafford Act was passed and FEMA’s role in disaster response was established. There are 15 emergency response functions under the Stafford Act. And the Corps of Engineers, as part of the Department of Defense, is responsible and has the lead for Emergency Support Function Number 3, which is public engineering. This is why when there is a disaster such as Hurricane Sandy and there was dewatering or debris removal required, that the Corps was called on to do that engineering mission. Up to now we have received over 50 mission assignments and they are tied to funding that is going to go towards the recovery of the East Coast.

The Rivers and Harbors Act of 1899 gave the Corps the authority to regulate hazards to navigation including those from effluents. This was the basis for our regulatory mission.           The Federal Water Pollution Control Act amendments to the 1972 Clean Water Act, Section 404 Permitting Authority, are what we are familiar with now. The Defense Environmental Restoration Program expanded the Corps’ role in environmental work on military installations in 1983.

I will now talk about the San Francisco District. Our mission is the same as our higher headquarters. We have about 300 employees and we execute about $90-100 million of work each year.

The history of the San Francisco District began in 1866 when the Army handed a major a gunnysack of money and gave him some surveyors and told him to go to San Francisco.           Twenty years later the San Francisco District had surveyed all the land west of the Rocky Mountains, which helped with the completion of the Transcontinental Railroad.

We grew from our original San Francisco Office to include the LA District, the Portland District, the Sacramento District and then also our higher headquarters, the South Pacific Division was actually formed from our original office in 1888. Our area of responsibility is 3,000 square miles and it encompasses 23 coastal river watersheds going from the Klamath River in southern Oregon all the way down the coast through the Salinas River Watershed on the Central California coast. Our jurisdiction goes about as far east as any of those watersheds and it ends where the San Francisco Bay becomes the Delta. We have 18 deep draft federal ship channels and whole slew of shallow draft channels that we maintain. Our navigation mission supports a Gross Domestic Product in this area that ranks internationally about 17th. We have constructed flood risk management structures that protect about 8 million people.

This is the largest portion of our navigation mission and two-thirds of our funding per year goes towards navigation and supporting all of these coastal harbors as well as the major ones in the San Francisco Bay area. We also support the ports of Stockton and West Sacramento Inland. This funding goes towards everything from studying deepening projects or other kinds of studies, the actual maintenance dredging, to new work dredging and then to debris removal. We have two debris removal vessels, the Raccoon and the Dillard. We are the only folks that remove debris in the Bay area. It is a mission that we have had since 1943 when Admiral Nimitz was landing a seaplane in the Bay. They hit a redwood tree stump that was floating in the Bay. We remove about 14 hundred tons of debris out of the San Francisco Bay every year. We supported the America’s Cup and Fleet Week recently with this mission. This is a point of pride with us.

We have two branches involved with our regulatory mission. The San Francisco District currently does not have a military mission although there are military bases within our area of responsibility. Sacramento has this function.

There is an overlap with a lot of the districts. The San Francisco District was commanded by a full colonel up until 1982. At this time in our history we were given an order to shrink our size by 10 percent. We closed some districts down and reduced the size of some districts and made nine of them into lieutenant colonel level commands. San Francisco went to a lieutenant colonel level command and the military missions were transferred to the Sacramento District and our district shrank to about 130 people.

Another thing that we are really proud of in the San Francisco District is our environmental stewardship. The Pave the Bay Plan was proposed in the 1950’s and the Corps was authorized by Congress to do a study and to build a model. We used our six-acre facility in Sausalito, which was a former liberty ship factory, turned it into a Bay model.

We published a report called, “The Future of San Francisco Bay From 1960 to 2020”. That provided the science that informed the decision not to pave the Bay and then gave rise to such organizations as Save the Bay and BCDC formed years ahead of its national counterpart, the EPA. We are very proud of the fact that San Francisco is leading the environmental movement ahead of the nation.

One of the challenges that we have is executing our mission with limited resources while balancing environmental stewardship. The first vignette has to do with our Russian River Watershed. It starts up in Mendocino County and extends south into Sonoma. We have two lakes, and two dams: Coyote Valley Dam and then, on Dry Creek, Warm Springs Dam.

As mitigation for the environmental impacts we were required to build a fish hatchery. We operate this hatchery in conjunction with California Department of Fish and Game with oversight and input from NOAA and their national marine fisheries service. In the late 1990s we realized that the population of the salmon and the trout was going down tremendously. As a result of our hatchery work, the Corps of Engineers became the proud owners of the last viable species of the central California Coast Coho Salmon. I never thought that my job was going to involve fish. This is now a business line for us.

This is a very complex and difficult watershed that must be balanced to accommodate the various demands on the water available. This area is very prone to flash floods. There is also hundreds of thousands of cubic yards of gravel mined out of this area. Because of the vineyards and all the other developments in Sonoma there is a high premium of water in this area. In addition, there are 600,000 residential users of water in this area.

The second vignette has to do with the South Bay flood risk management. I recently toured the $11 billion worth of work that has been done in New Orleans. As part of this very detailed tour I met the president of Plaquemines Parish. This is the same individual who spoke on national television of how he had been wronged by the federal government and the Corps of Engineers. He had an opportunity to speak to this group of district commanders and tell us about how much commerce, industry and agriculture that was vital to our country flowed through his parish. He was also very proud to announce that his parish was going to be the recipient of nearly $1 billion of federal money and that they had matched it by $30 million of their own.

I commented to him that I am from the San Francisco District and in our South Bay, which is below sea level, we have Silicon Valley which many contend runs the worldwide web from the basements of their buildings. These are not protected from federally engineered levees. I asked him for his contact information so folks in Silicon Valley might talk to him and understand how he was able to secure these monies from the federal government. He acknowledged that this was a good point but his body language was not very favorable towards me.

I wanted to talk about budget constraints. Our local sponsors may not be receiving the monies they are counting on and this will have an effect on our ability to complete our projects. The Corps has taken on a civil works transformation in which we are really looking hard at how we fund projects and how we can better fund projects that have a higher chance of success.

The last thing I will talk about is the Long Term Management Strategy [for Dredged Material Placement in the San Francisco Bay Region]. This is a topic that we are in collaboration with BCDC. This is another case where the Corps and the San Francisco District is providing science that is informing environmental policy in advance of any federal mandates or laws. We are undergoing our twelve-year review right now. We have a lot of folks that are doing some really good work on modeling, how sediment transport is moving throughout the Bay and we are taking a look at how we have actually executed projects and whether our goals were met. We are also taking a look at the creation of wetlands. The Corps is one of the agencies that is doing a lot of restoration.

I am very encouraged that there are so many different stakeholders with competing interests that are collaborating and working together on this.

Chair Wasserman opened the floor for questions.

Commissioner Wagenknecht commented: I am from Napa County. We have been trying to get dredging going for a while. What can you tell me about the future of our dredging projects?

Lieutenant Colonel Baker responded: In Napa we have a shallow water ship channel that extends at varying depths and widths all the way up to the town of Napa. We tell our sponsors that we have over 150 active projects in our district.

In this current fiscal year we are funded for 50 projects. We understand the merits of your project but there are federal priorities and our money can only go so far.

Commissioner Nelson commented: I am the State Senate appointee and I was formerly with Save the Bay. I have a question about the Corps budget.

As you stated, Congress has always been very involved in how you allocate your funds. As Congress moves towards an earmark-free approach to budgeting, do you expect that to change in some way how the Corps’ budget is put together and how those funds are allocated?

Lieutenant Colonel Baker replied: The way the process works is, we initiate projects and then we put together a list of what the projects are and what the project requirements are and what the capabilities of our District are.

And then we prioritize those and we send those up our chain and they ultimately go into a president’s budget. The president’s budget will tell us, here is what your federal budget is. Congress goes to the Corps and says, here’s your pot of money for your work plan. And within the Corps we have priority order.

Via our civil transformation process we want to fully fund those projects that would be completed in a particular budget year in accordance with the administration priorities.

Our president’s budget for this fiscal year is a 25 percent decline from what we actually received in our previous year’s budget. It is very difficult for us to figure out how to staff for something like that.

What we do find helpful in advancing projects is when sponsors say, we will contribute funds to bridge the gap.

Until we actually have a federal budget we are sort of moving forward with caution.

Commissioner McGrath commented: I would like to discuss how we can best engage the Corps over the longer period of time to manage sea level rise. When we built facilities 40 or 50 years ago we really did not understand sediment transport very well. We assumed we could keep these facilities dredged and that we would have enough hydro-capacity to pass the water and what has happened is all the sediment drops out there and the flood control capacity is not there.

What we now know is that larger tidal prisms keep those channels open. They provide a level of bank full flow, which is more efficient.         So there is a common purpose between the mission of flood control and the mission of preserving and enhancing the Bay.

What advice would you give us and local governments as to how best to begin to look at those questions of where around the Bay enlarging tidal prisms might make sense as part of a federal/state, local government partnership?

Lieutenant Colonel Baker responded: We have some folks that are deeply involved in all types of coastal engineering and sediment transport modeling and they have given me briefings on these subjects.

What I see is that you are correct. When these projects were done decades ago there was no way they could have known what development was going to take place and how that was going to change the environment.

Commissioner McElhinney spoke: I am representing the state of California Business Transportation Housing and also Caltrans for the Bay area. The Corps has been terrific to work with. We are involved constantly on highway river crossings and bridges. The Corps has been essential on a number of these projects. Do you have any ideas how we can jointly and overall for transportation streamline the environmental documents and the permits that go through your office? 

Lieutenant Colonel Baker replied: I believe we just did a regional general permit for Caltrans that may help to do what you have asked for. We have tried to take some of our authorized studies and tried to do research that will inform a whole bunch of different things, in lots of different areas.

What we found is the scope of such studies usually exceeds the resources that we have to do them. We have tried to undertake a study that answers a whole bunch of things and even though it might cost more, knowing if we get approval to do it then it can inform a lot of things that might streamline permitting, improve benefit/cost ratios or just better decisions on future work.

Commissioner Gioia commented: It was really great to hear about the history of the Army Corps in your presentation. Can you talk a little bit about the aquatic transfer facility and second, the issue with regard to vegetation on levees. From your standpoint in the region, any comments about that?

Lieutenant Colonel Baker answered: Regarding the aquatic transfer facility is a point of contention because it is briefed as an efficient way to quickly move sediment from a place it is dredged to a place that might need it. The sediment is dredged from one place and is transported by barge, placed in a holding facility, or aquatic basin, and you can then pump it out to a place that you need it that’s local. The alternative to that that was done with the Oakland 50 foot deepening project in which material was taken to the former Hamilton Airfield site and I believe it was pumped about eight miles and they transferred the material by barge load and then pumped it over the mudflats in a pipeline.

It was very costly to do it this way. But we realized that if you used the aquatic transfer facility it has potentially negative impacts on the environment because you are just placing all the material right there and then the tidal action is going to move it all around and you have large quantities of material that is generally will go where you want it to go but I do not think it is going to have the desired environmental impacts. The challenge that we have here is that what appears to be a great engineering solution not a real good environmental solution. [Addendum by BCDC staff: the basin would be designed and located by the Corps at a depth to contain the sediment placed in the basin until a significant volume was available to be pumped on to the restorationsite in a large episode, thereby saving time and money both on dredging and placement as well as the restoration, with less equipment needed over time. The potential negative impacts of the project cited by the resource agencies commenting on the EIS/EIR include disturbance of benthic habitat and potential entrainment of listed species, including green sturgeon, salmonids and longfin smelt.]

The levee vegetation is another difficult issue because you have varying standards for the levees determined by when they were constructed. Sometimes vegetation has grown on a levee and it was not designed to ever have that. You have cases where the vegetation is beneficial for wildlife or for the environment but it may have negative impacts on the structural integrity of the levee itself. There are all kinds of pros and cons regarding this situation and it is a challenge that the Corps is wrestling with. We do not have a single unified answer.

Commissioner Gioia asked: From your standpoint in the region, what is the policy or practice that is occurring?

Lieutenant Colonel Baker replied: Well, in San Francisco I am proud to say that it is not as big an issue as say, Sacramento with the American River and the fact that a number of their municipalities are beneath the water line.

Commissioner Cortese: I was appreciative of the advocacy story you were telling about the South Bay. I am from Santa Clara County. How does the Corps see their role in terms of advocacy?  Is this a formal role in your mind or informal role?  And should we be coming to you more as locals when we have concerns and issues?  Should there be direct contact in terms of seeking you out as an ally on some of these issues?

Lieutenant Colonel Baker stated: I am not a politician and I am not allowed to lobby or advocate for any of the Corps of Engineer’s projects. However, all of our civil works projects start with a sponsor coming to the Corps and saying we need help. You can call me at any point in time and I may not be able to address your issue but I can certainly point you in the right direction. I welcome any contact that anybody has and certainly those things that come to my attention I take very seriously and we get right after those.

Commissioner Addiego spoke: I am a representative of the San Francisco Peninsula, the West Bay communities. One of our most important economic features is the San Francisco International Airport. As elected officials we kind of jump from disaster to disaster. We have witnessed what happened in New Orleans and now New Jersey and Long Island and their major airports.

The Corps’ mission ends with reducing the risk from disaster. As regards sea level rise, tidal storm surges and how they might affect us in the San Francisco Bay, are there any plans or anything developing that would protect us on the front end from what occurred on the east coast?

Lieutenant Colonel Baker replied: Yes sir. We have some engineers and scientists that are helping to rewrite the Corps of Engineer circulars or the policy on sea level rise.

This is something that we are incorporating into every one of our projects. We take into account the sea level rise coming from the ocean. If we are looking at a low-lying area you also have to take into account rainfall that might be coming straight down from above.

In our local area we take into account very high levels of rainfall because the historical cases of flash flooding. We are incorporating this into all of our projects.

We have a large study on the South Bay Shoreline in which we are taking into account everything, the flooding, sea level rise, rainfall coming straight down; so it is on our radar screen.

Commissioner Apodaca commented: Is the Corps on the lookout for any new environmental restoration projects around the Bay?

Lieutenant Colonel Baker responded: I guess you could say we are always looking for new projects. There’s no shortage of work that’s out there. The Napa River Salt Marsh Restoration Project will execute about $14 million of work this year. The California Department of Fish and Game has already restored close to 7500 acres of that area. We have the Hamilton Wetlands Restoration Project in the former Hamilton Airfield area near Novato and that’s about 1,000 acres. Future work at Bell Marin Keys, which is an adjacent feature there is scheduled. There is 17,000 acres of salt ponds in the South Bay in which we are studying future work to be performed. There have been elected officials that have touted that as the Everglades of the west coast.

We keep our eyes open and if the work comes our way, if it competes favorably for federal funding, then we are here to execute it.

Chair Wasserman asked if there was anyone from the public who wished to address this item. He received no response from those present. The Chair thanked Lieutenant Colonel Baker for an informative and entertaining presentation. He stated that he was not sure about how much coordination there had been between the Corps’ efforts in terms of disaster prevention and what both BCDC staff and the JPC staff are doing. I hope whatever the level is, it will increase in the future. We need to synergistically enhance our efforts.

Chair Wasserman moved on to Item 9.

9. Briefing by BCDC Chief Counsel on Ex Parte Rules. Chair Wasserman stated that Item #9 was a briefing on BCDC Ex Parte communication regulations. Tim Eichenberg, our Chief Counsel will make the presentation.

Chief Counsel Eichenberg spoke to the group: I have a PowerPoint presentation for you. This is a very brief refresher course on our rules regarding ex parte communications. Some of the major points are as follows.

a. What are Ex Parte Communications?

(1)  Any oral or written communication regarding a pending adjudicatory proceeding between a commissioner and a party that occurs outside public record of the proceeding. (14 CCR §10281 – Citation to regulations)

(2)  Adjudicatory proceedings are quasi-judicial proceedings such as permits, enforcement actions and federal consistency determinations

b. Ex Parte Communications – Prohibited

(1)  State law and BCDC regulations prohibit ex parte communications in adjudicatory proceedings. Government Code §11430.10 and 14 CCR §10283(a).

(2)  Ban applies when an application is submitted or enforcement action initiated.

(3)  Ban does not apply to quasi-legislative proceedings such as Bay Plan amendments, legislation or regulations; but since such proceedings also are based on an administrative record, Ex parte communications should be reported on the record on these proceedings.

(4)  Ban does not apply to communications with staff. (Government Code §11430.30) 

The only exception to this is in an enforcement action where there is an actual hearing before our Enforcement Committee. In these cases there needs to be a separation between the staff and the Enforcement Committee so there may be a ban on communicating with staff in these kinds of situations. Generally speaking, however, you can speak to the staff about anything that is before the Commission.

c.         Why are Ex Parte Communications Prohibited?

(1)  May affect due process rights of applicants and rights of third-parties to unbiased decision because they deprive them of knowledge of the communication and an opportunity to respond. Agencies cannot make decisions based on their own information but rather, they have to make decisions based upon the evidence that is presented to them in a proceeding where all parties have an opportunity to respond to that information. Ex parte communications violate these principles of due process. People have a right to a fair and impartial hearing.

(2)  May unfairly taint an administrative record used for court review of a decision by rendering it incomplete.

If the record is prejudicial, it can lead to invalidation of permit or enforcement actions. (CCP §1094.5)  This decision could possibly be overturned in court.

d. If Ex Parte Communications Occur

(1)  If Ex parte communications occur they must be disclosed on the record to mitigate/minimize prejudicing the administrative record

(2)  Individual field trips are Ex parte and also must be disclosed and reported on the record.

e. Disclosure of Ex Parte Communications

(1)  Oral Ex parte communications – must be disclosed on the record and a memorandum submitted to staff before or during Commission consideration, identifying the party, substance and response.

(2)  Written ex parte communications – must be sent or emailed to the Executive Director on a form (attached), identifying the party, substance and response of the communication.

(3)  The Executive Director must notify interested parties, provide copies of form and provide opportunity to respond within 10 days – may require re-opening public hearing if this cannot be done within 10 days.

Commissioner Gioia commented: When we do a Bay Plan Amendment that’s not considered an adjudicatory proceeding even though it affects individuals’ rights. So it is defined as permit proceedings, enforcement actions, federal consistency determinations or certifications.

Chief Counsel Eichenberg added: That is correct. But, again, that cautionary note that I gave you before was that those decisions that we make on these matters, Bay Plan Amendments and so forth, still have to be based on an administrative record. And an administrative record should be complete. If we get challenged then we have to make sure that the record has all the information that we used to base our decision on.

Vice Chair Halsted commented: One of the hard things is figuring out when an application has been filed. We have set up some way for the Commission to be aware of when an application has been filed. Can you just remind us of that.

Chief Counsel Eichenberg replied: When a permit application is received, the Commission staff files a notice that is put into your packet.

If you have any questions then the best thing to do is to ask us, call us. You do get a report every two weeks of permit applications and federal consistency determinations.

Vice Chair Halsted continued: I had the impression there was a different level of reporting responsibility for elected officials versus non-elected officials. Elected officials have to represent their constituencies and they can speak to them on issues that non-elected officials could not.

Chief Counsel Eichenberg replied: There is no distinction as far as ex parte communications go for BCDC.

Commissioner Nelson commented: Commissioners have regularly disclosed conversations that they have had with potential permit applicants, folks who have not applied yet. Those disclosures are being made in an abundance of caution but they are not technically ex parte communications, correct?

Chief Counsel Eichenberg responded: They are not for pending applications they do not need to be disclosed. However, both applicant-sponsored field trips and those undertaken on a Commissioner’s own volition are ex parte. If there is a pending application we urge you not to go out on field trips because this is an ex parte communication.

Commissioner Nelson also asked: You indicated that where ex parte communication takes place it should be disclosed to the Executive Director; who are interested parties?  The public clearly is an interested party. If an applicant contacts a Commissioner and we disclose that to the staff, how do you know whom to inform?

Chief Counsel Eichenberg stated: We have an interested person list for all of these matters that come before the Commission. Anyone who is on that list would be informed. We also have an, “IP List”, interested person list, for every matter that is before the Commission. These are people that have requested anything that is published by the Commission on a certain matter.

Commissioner Gilmore commented: This has to do with email and one-way communications. What happens if an organization is interested in something and sends out a blast email to me and all the other Commissioners and everybody and his brother and it may contain not only what they want to communicate but there may be an attachment of a newspaper article or something like that; but there’s no response from me, do we have to report that?

Chief Counsel Eichenberg replied: We should report that, yes. If you did not open it then you would not have to worry about reporting it.

Executive Director Goldzband added: The easiest way to do that is to forward it on to me with an explanation based upon what we have given you here.

Chair Wasserman commented: What Tim has presented is absolutely correct, it is absolutely logical and the law itself, in my opinion, is absolutely impractical.

This is in state regulations that applies here. It does not necessarily apply as a regulation to your local jurisdictions. The fundamental constitutional protection that this is based on certainly applies.

The reason it is totally impractical is, particularly for the elected officials, but frankly, even for the non-elected officials; there are all kinds of reasons and circumstances in which someone may talk to you and, A, you may not be able to prevent it and, B, there may be very good reasons why you are fully prepared to engage in some discussion.

If you do not want to engage in the discussion or hear it, this gives you an absolute protection. You can actually say, my lawyer said not to because that’s what he said.

On the other hand, in the practical sense of it, we are all very highly likely to get ex parte communications on adjudicatory and semi-adjudicatory matters.

I would urge people not to rely heavily on the pre-application issue because there may well be a delay between the application and our receiving notice, there may be a delay between our receiving notice and our reading it or we may simply not read it and that’s why putting it on the record is very important.

Particularly when we know there is an application formally made or an enforcement matter or something else, then it is even more important not only to put it on the record but to put some details on the record.

The simple principle to keep in mind is that, you want on the record sufficient information about the communication so that if another party on the opposite side wants to know about it, they have got the full opportunity to know about it. And they have, potentially, the opportunity to question us about it.

Executive Director Goldzband added: If you do have a conversation like this, you will let us know, I know. And we will send you out some easy ways you can let us know. One of the things that I have thought about is having an email address at BCDC that could simply be called, ex parte at BCDC, and you simply send all the information there and we can make sure to monitor it.

We really want to know if there is an issue or if you have heard about issues. Please do not be afraid to pick up the phone or send an email to me or to Tim or anybody you know on staff saying, hey, this just happened. We want to make sure that we hear it from you as well because if you have got questions about what you have just heard, we want to make sure that we let you know what staff understands the issue to be.

Commissioner Gioia commented: One thought on receiving communications on issues before us, especially emails, we can forward that email to staff which then allows that to get on the record for everybody.

In Contra Costa we have our own sort of an ordinance that goes beyond the Brown Act. What we do now is, when the full Board gets communications we actually send them in and they are posted on a website.

Commissioner Chiu commented: The scenario that I am concerned about or have questions about is, when we have legislative actions in our own jurisdictions that are separate and apart from the application that is pending in front of BCDC, can we speak with the interested party, the project sponsor, on the legislative action?

Chief Counsel Eichenberg replied: Ask for a legal opinion. I would think if it is on a separate matter that is not before BCDC then that would be okay. This would only apply to BCDC for pending activity.

If it is a legislative action, the ban on ex parte communications does not apply. But if there’s a related permit matter before BCDC and it is somehow related to that permit matter, I think in an abundance of caution you should probably report it if it somehow would affect a matter pending before BCDC.

The other thing that I was going to say is that, even if it is not prejudicial and our decisions are not invalidated by a court. There is also the appearance of unfairness that occurs through ex parte communications. That is something that BCDC has always tried to be ultra-transparent and ultra-fair to everybody.

So, even though some of these communications may not be prejudicial and may not adversely affect the decision that BCDC makes, it does sort of smell bad like there’s extra information that is being given to some people and not to others. And that appearance of unfairness is something that we would urge you to avoid if at all possible.

Commissioner Gilmore commented: I had this discussion with my legal staff. For those of us that happen to live in our Bay front cities there’s this whole issue of, if there’s something our particular city wanted or is in the process of doing, of course, I am going to be advocating that the city get this on the local level.

It is a different issue when I come here and I sit as a BCDC Commissioner and it is my city or your city in front of this body saying, I want this to happen.

I have heard from my legal staff that there is not a legal conflict with me sitting here and voting on that but this is this whole different discussion and it does not look okay.

Chief Counsel Eichenberg replied: I do not think this is an ex parte situation. It is something else.

Chair Wasserman added: It is not ex parte. Your communications with your own city staff or the applicant could be considered ex parte communication, so all of that should be disclosed.

Your point goes beyond this. My answer is, for those who are put on this body from constituencies, yes you represent both. I think there’s a presumption that, to some extent, when you sit here, you move a little bit above the local. But there is no pretense or any reason why you are not here as an advocate for the particular issue that your city or Caltrans might want.

Obviously, you disclose it and it is almost always obvious. I do not think you leave your responsibilities as an elected official in your local jurisdiction when you come here.

I do not think you should hesitate at all to be as effective of an advocate as you can for your city or your constituent’s interests.

Executive Director Goldzband continued the conversation: One of the great secrets to BCDC’s success is that we are not well known. The people who come here to sit on BCDC look at the Bay.

And they all look at the Bay from different perspectives. I would amplify what Chair Wasserman said and say that when you come to BCDC we know where we come from and we also know what we look at.

And we look at the long view and we look at the Bay as a whole. And how each individual Commissioner reconciles the literal interpretation of seeing the Bay with his or her figurative interpretation of how he or she sees the Bay, this comes from inside.

Chair Wasserman opined: And the real quandary would occur if your jurisdiction was advocating for something but you were in the minority and did not favor it.

Commissioner Feldstein commented: For those of us who are alternates, are we responsible for disclosing anything that was an ex parte communication with the person we are representing or only communications that we ourselves have.

Chief Counsel Eichenberg replied: There are all these interesting questions that pop up. I would say that if you are sitting here today and you are a decision maker then you need to disclose things that happen to you.

If you are an alternate and your member had an ex parte communication, that member has to make a disclosure and they can assign that disclosure to you to make. Somehow it needs to be made to us.

Commissioner Feldstein inquired: What about electronic site visits or sitting here with you iPad and Goggle Earth and having information that nobody else has?

Chair Wasserman stated: Disclose it.

Chief Counsel Eichenberg responded: I would say, if it is questionable then disclose it. If it is something that is available to everybody on the Internet then it is available to everybody. It is not part of the administrative record at BCDC. When in doubt, just disclose it.

Commissioner McGrath commented: This is an important and difficult discussion to have. We all exist in more than one role.

I want to voice a comment of caution. I have similar directives in my role as a Water Board Commissioner. The Legislature took up this issue at the last session and gave guidance.

It behooves us to listen when both the courts and the Legislature give some significance to what ex parte communication is.

We were just briefed in Sacramento about the new legislation. They have a similar prohibition with perhaps a little bit more rigor on adjudicatory matters.

The Legislature did relax the terms and guidance for ex parte communication for legislative matters. It put a positive responsibility on anybody that initiates a contact to notify the decision makers in writing of those.

We do have to balance a lot of competing interests. Perhaps Tim could provide the recent changes in the Water Code for ex parte communications as some legislative direction that we should take notice of.

Vice Chair Halsted stated: Anything we read in the newspaper or see on the TV or read in a book would not be something that we would have to report. I would think that things that we would find on the Web under general information would fit this category as well. Does that seem logical?

Chief Counsel Eichenberg agreed.

Commissioner Gioia commented: We are all under continual demand and pressure to be responsive to constituents. It always hard to tell someone, I cannot hear you out on the argument you want to make or a good reason that you want to give me. Sometimes you have to tell them, show up in Oakland or San Francisco and make the argument there or write a letter.

This is always a challenge because you want to be accessible and responsive. There is not a penalty in having a discussion and to then disclose it.

Commissioner Gibbs commented: I want to compliment our counsel on his performance under extraordinary pressure.

Executive Director Goldzband stated: We will get a follow-up to all of you on how we can make this as easy as possible for you.

Chair Wasserman moved to Item 10.

10.  Briefing by the Bay Area Council Economic Institute. Chair Wasserman informed those in attendance that item #10 was to be a briefing by Commissioner Sean Randolph of the Bay Area Council Economic Institute on the Regional Economic Assessment that has been prepared for the Joint Policy Committee.

Commissioner Randolph presented the following: About seven months of work went into this product. It relates to a lot of things that other JPC organizations are going to be involved in.

The Bay Area Regional Economic Institute is part of the Bay Area Council. We are the research and strategy arm and we are governed by an independent board of trustees.

This board has been around about 30 years and it is a public/private board. About one-third are business, a third are elected officials appointed by ABAG and about a third come from higher education, labor foundations and the environmental community.

About 18 months ago it came up in the JPC that there appeared to be a growing focus among members on what was happening in the economy.

There was concern that elected officials might not understand what’s driving job growth, economic growth and what is holding this back. Moreover, there was some concern that it may be hard to get constituent’s attention in a positive way on things that agencies wanted to do like the sustainable community strategies if people are out of work.

The Institute was asked if we could produce a study on the regional economies and assessing what’s driving economic growth, what’s driving jobs and also what’s inhibiting economic growth, what’s inhibiting jobs but not to leave there but to come up with some directional thinking on things that could be done in the way of economic strategy and how businesses could work more closely together to address some of these problems and opportunities.

MTC stepped forward with funding for half of the project on the understanding that the business community would match that amount. The business and economic development community stepped up and more than matched that amount.

This is a unique product in that it has a 50/50 support and the fingerprints of both the agencies as well as a lot of the companies and major organizations in the business community.

I will run through a series of slides. The hard copies are at the printer and everybody will get a hard copy in about a week or 10 days. I will be covering just the high points.

a. Principal Objectives

(1)  Provide a shared foundation of economic facts

(2)  Assess the driving forces behind the Bay Area economy - competitiveness, jobs and growth

(3)  Identify impediments to stronger growth and job creation

(4)  Make general recommendations on economic strategy going forward

b. Outline

(1)  Economy

(2)  Findings: Strengths, Weaknesses, and General findings

(3)  Observations on regional competitiveness

(4)  Recommendations (I will review what is happening in the economy including strengths and weaknesses and some general findings and observations. I will dwell for a few minutes on the recommendations.)

c. Headline Economic Facts

(1)  Bay Area Regional Economic Assessment

(2)  GDP/Capita is Relatively High

(3)  Long Term Employment Growth Has Been Slow

(4)  Forecast Growth in Total Jobs

(5)  The Bay Area Has Heavy Employment Concentrations in High Value Added Sectors

(6)  Bay Area Share of Selected U.S. Tech Jobs in 2010

We are lucky in that we live in an extraordinary region. Our GDP on a per capita basis is the highest in the United States. The counter point to this is that this is not being mirrored in employment.

We are slowly coming back from the recession but we still have an unacceptably high unemployment rate in the Bay area despite the wealth of the region. This raises a lot of issues. The forecast for job growth is for jobs to grow faster here than elsewhere in California and the country.

The Bay Area is extremely high in and is growing in job concentration in areas that are very high value added sectors. For every worker or employee there is a very high level of economic output. The big category in this area is the professional, scientific and technical services. This is the workforce in the high tech community. This accounts for the really high per capita GDP in the Bay area. These require high levels of education and training and generate a significant amount of income.

d. Key Findings

(1)  Regional Strengths

  • Quality of life
  • Highly educated labor force
  • Venture capital
  • Innovation culture

The venture capital industry was largely created here. About 55 percent of all the venture capital invested in the U.S. is invested in California. About 40 to 45 percent of that venture capital is invested in the Bay area. That is an extraordinary concentration and over time it is becoming more concentrated here. Venture capital tends to go into things that tend to be highly creative. I think we are the innovation capital of the world: Venture Capital and Culture of Innovation

(2)  Regional Weaknesses

  • Housing
  • Regulations
  • Labor force 
  • High Housing Prices (Median Home Values Over Time)
  • Business on Regulations
  • Regulatory environment received mixed reviews: 38% were satisfied, 24% neutral, 33% dissatisfied.
  • Frustrations were voiced regarding: regulatory transparency and efficiency, lack of consistency between regulations and requirements at the local, regional and state levels.
  • Labor Force: (a) evidence that declining jobs in the middle class stem from lack of relevant skills; (b) 62% of businesses surveyed reported difficulty with meeting workforce needs; and (c) firms in technology report increasing difficulty in finding skilled workers.

High housing prices are a big factor in holding us back. We have not been developing housing for a long time and we are not doing it now. There is a huge housing affordability gap between the Bay area and the rest of the country. There are mixed views on the regulatory environment.

Many companies were very concerned with the efficiency of regulations as opposed to their necessity or validity. The lack of transparency or consistency was a big concern. At the end of the day this all contributed to reducing competitiveness.

There is a real concern that there is a declining number of jobs in the middle spectrum as opposed to the high end employment. A lot of people in the lower service industries or lower educational level employment suffer from a big gap in wages. A lot of tech firms told us that they are finding it harder and harder to find people with the skills they need to hire and to operate here.

(3)  Additional Findings

  • One Bay Area
  • Business starts are the basis for growth
  • Challenges/opportunities going forward
  • Significant Commutes are Common
  • There is Growing Homogeneity in Regional Economic Activity
  • Business Starts are The Basis for Growth
  • Bay Area Population Growth (thousands) 
  • Opportunities and Challenges
  • Baby boomers retiring – many replacement jobs available
  • The region competes for business but at the same time we compete for business by competing for workers and their families
  • Creating great places to work and live

A lot of economic development will often focus on having jobs really close to housing. The commute patterns in the Bay area show that there is an enormous cross-county commute throughout the Bay Area.

This points to the fact that this is really a regional economy. There is more homogeneity in the region than there used to be when you think about the idea of technology start-ups. At one time they were concentrated in Silicon Valley but now what we are seeing is that the concentration of tech companies is spreading throughout the Bay Area.

People talk about companies leaving the Bay Area because it is too expensive to do business here. A relatively small portion of employment here is created by companies moving into the area or lost by companies leaving. Overwhelmingly, jobs are created or destroyed by companies that are already here. This does suggest that economic development strategy really is not most productive if it focusses on trying to get companies to move here from somewhere else, especially across county lines. The real benefit in strategy is if you can help young, small companies and entrepreneurs grow and be more successful and less likely to fail.

A significant growth of the Bay Area population will be those in the 65 to 74 years of age bracket. This has a lot of implications for people moving out of existing positions and retiring. This is going to create a lot of job openings in the next 10 to 15 years. This has implications for housing with the possible need for more housing for retired people, people moving into the city, multi-family housing and maybe less single-family housing.

A lot of opportunities are going to be available to replace people who are retiring. Most of the people who are retiring, on the average, are highly educated. This is a challenge for the people who are living here now and are in school now to come up to the same skill level to replace the people who are going to be retiring. One of the ways that we compete for business is having a great place to work. The quality of life in the Bay area is fundamental to workers wanting to come here and to stay here. But we also found that many companies are here because the founder is here and he or she started the company here. The founders are here and have stayed here because they like to live here. Right now this is working to our advantage.

(4)  Regional Competitiveness: Primary Factors for a Competitive Region

  • Access to markets
  • Access to factors of production (labor/capital)
  • Competitive cost of doing business
  • Unique sector strengths
  • Quality of life: CEO/Founder effect
  • 1, 4, 5 represent Bay Area strengths
  • 2, 3 represent Bay Area weaknesses

There are about five things that go into competitiveness. Access to markets entails the aspect of, are there large markets that you can sell your services or products to. Factors of production entail basically the aspect of being able to find the workers that you need and can you get access to capital. The cost of doing business compared to other locations is also a factor. For us the unique factor strength is the high concentration in every kind of technology, high value added industries and the quality of life.

Nationally and statewide we have got great infrastructure and it connects us to the whole world, especially Asia. So this is a good place for a company to be.

Access to capital is pretty good although it has been harder the last few years because of the recession. Access to labor is becoming a problem for companies looking for skilled workers and that goes to some fundamental issues in our educational system. Are we generating people with the skills that businesses are going to look to hire here?  The cost of doing business here and the regulatory issues came up again and again.

(5)  Broad Recommendations: Areas for Attention (A)

  • Identify a Public-Private Focal Point for Regional Economic Strategy
  • Create a Business Advisory Committee to the JPC
  • Engage Business Earlier in Individual Agency Plans
  • Harmonize Local Regulations at the Regional Level

(6)  Areas for Attention (B): Focus Economic Development Strategies

  • In areas where the region is most competitive
  • On supporting firm survival and growth over attraction from other jurisdictions
  • Develop a stronger region-wide focus on workforce training and development.

This is the bottom line of the report. We have suggested that to get a better wavelength with the business and economic community that JPC should consider creating a business advisory committee to the JPC to get business and economic development views in much earlier in the conversation than they have been before.

Another way to do this would be to turn to an external partner and have them on a path with JPC and be a convener with the business and economic development community and do the research and the aggregation of the information and feed that into the JPC. This goes to the question of how to involve the business community earlier in the regulatory processes.

We have suggested that the individual agencies also consider creating economic development or business advisory committees. The concern from businesses voiced over the years is that very often the economic perspective gets tacked on the end. We found this concern voiced here at BCDC when we went through the Bay Plan exercise. We really did not think carefully enough on how the economic development of the business community would react. They came in on the end after it was pretty well cooked and we had to spend about 18 months to get it right.

I would say that I do not think we really have learned our lesson. I was reviewing the documents from our last meeting or maybe the meeting before where on the JPC’s climate adaptation strategy going forward which had its origins at BCDC and we will have a big role in that going forward; nowhere in the entire document is it mentioned, consultation with the business community or consultation with the economic development community or an economic perspective of any kind. There are only two references. One is engaging the general public and the other is a reference to that regulations around sea level rise and do you advance or retreat or protect will be sensitive for the business community. This is not engagement and I can tell you for sure that the business communities are lined up and they are going to expect to be involved in the adaptation plan. I think there is still a gap to be filled.

Harmonizing regulations at the local level is kind of tricky because every jurisdiction has its own regulations. We heard again and again that there are these overlapping regulations that get really costly and time consuming. The point was made a number of times by our business survey respondents; could not this be more efficient?

The cost of installing solar power was one of the areas that could be vastly improved just by a more harmonized system of regulations across jurisdictions.

The best strategy for economic development is not to focus on trying to get companies to move here from somewhere else but rather helping younger smaller companies and companies that are already here survive and grow and helping them not die. We must also focus on areas where the region is most competitive.

This goes to concerns about what are the best ways to support the low and moderate income communities with jobs and services. There is a phenomenal job multiplier when you look at high tech industries. Every tech job supports about 3.5 additional jobs in the economy. These are all kinds of service people. This would suggest that we have this enormous strength in industries that are very tech focused and that is an outstanding economic strategy if we want to develop jobs all up and down the economic spectrum.

It is really clear that we have to focus on workforce development and training. The jobs of the future will all demand a certain level of skill, training and education. People here are competing with workers around the country and around the world for those jobs. If people here coming out of the educational system do not have those skills we are not going to be able to attract and retain those companies. We are also likely to see a growing gap in our communities; that is more people at the very top and more people at the bottom with the lower skills, lower education who cannot compete and we will have fewer people in the middle. We need to look at the balance up and down the economy of people at all skill levels and this will require us to have a stronger focus on workforce training and development across the region. This study is on BCDC’s website.

For an advance copy of the report from the Bay Area Council Economic Institute go to to their website at  www.BayAreaEconomy.org

  • Regional Analysis
  • Business & Market Analysis
  • Ports & Infrastructure Analysis
  • Economic Impact Analysis
  • Public Policy Analysis

Chair Wasserman opened the floor up to questions or comments from the Commission.

Commissioner Nelson commented: You mentioned access to labor and capital in your presentation. Could you expand on this for us?

Commissioner Randolph responded: Those five factors are pretty generic and they would apply almost anywhere. As far as access to capital and labor the most important factor for almost any company is the workforce and access to the quality of workforce that it needs to do what it needs to do. This is one reason why companies tend to go all around the world because they are going to where the workers are. Places with the right number of people with the right skills are the ones that tend to attract companies coming in and also tend to grow the companies internally because of the qualified people who are entrepreneurial. The quality, education and skill level of the workforce is maybe the most important single factor in overall long-term economic development. Access to this labor pool is fundamental. Debt capital has been a problem the last five or six years. In venture capital and angel investment we are doing terrifically by any standard.

Chair Wasserman commented: When you talk about access to capital you really need to slice it and dice it a little bit more. The access to venture capital is terrific but that does not necessarily apply to the smaller to midsize businesses which are, in fact, the major job producers. And those companies today do have a problem of access to capital nationwide but certainly here in the Bay Area.

Commissioner Randolph responded: They do. If you are a company that is accessing venture capital or angel investment this is the place to be and you have got a much better shot at it than anywhere in the country. However, the reality is that only a very small percentage of startup companies ever get near angel or venture capital. The vast majority are funded primarily by friends and family, credit card debt and second mortgages on homes. This then is bank debt or bank lending. The big problem today is bank lending. It is really hard for a smaller company to get that kind of loan from banks.

Chair Wasserman noted that there was one public speaker.

Mr. John Coleman addressed the Commission: We have a Bay Planning Coalition workshop coming up on November 26th. We are dealing with two topics. One is the LTMS twelve year review. The second is environmental mitigation banking and there is no sub-tidal environmental mitigation bank in the Bay area. As the economy starts to turn you are going to see more development taking place and dealing with CEQA and NEPA in environmental issues. This is going to be a new growth area.

We have our annual lunch coming up on December 13th at the Saint Francis Yacht Club. Our two speakers are Chair Wasserman and Executive Officer Larry Goldzband and they will be talking about BCDC. California as a whole is ranked as the ninth largest economy in the world. Much of this is due to the fact of production of goods and the movement of goods on rail, highways, on the ocean and on airports. Over $15 billion is generated annually with the activities of the ports and the refineries here.

11. New Business. No new business was discussed.

12. Old Business. No old business was discussed.

13. Adjournment. Upon motion by Commissioner McGrath, seconded by Commissioner Gibbs the meeting adjourned at 3:45 p.m

Respectfully submitted,

LAWRENCE J. GOLDZBAND
Executive Director

Approved, with no corrections, at the San Francisco Bay Conservation and Development Commission Meeting of December 6, 2012

R. ZACHARY WASSERMAN, Chair