BILL ANALYSIS �
SB 1545
Page 1
Date of Hearing: July 2, 2012
ASSEMBLY COMMITTEE ON TRANSPORTATION
Bonnie Lowenthal, Chair
SB 1545 (DeSaulnier) - As Amended: June 26, 2012
SENATE VOTE : 30-2
SUBJECT : Metropolitan Transportation Commission: office
building purchase
SUMMARY : Requires the Metropolitan Transportation Commission
(MTC) to bring an action to determine the validity of its recent
office building purchase, under certain conditions.
Specifically, this bill :
1)Notwithstanding any other provision of law, unless the State
Auditor finds that MTC and the Bay Area Toll Authority (BATA),
acting through the Bay Area Headquarters Authority (a joint
powers agency consisting of MTC and BATA, hereafter referred
to as MTC) clearly had authority to purchase an office
building at a specific location in San Francisco and clearly
had the authority to use toll revenue for the purchase,
requires MTC to bring an action to determine the validity the
purchase and the expenditure of toll revenues.
2)Requires the validation action to determine the following:
a) Whether MTC had statutory authority to purchase the
office building; and,
b) Whether the purchase of the office building was a proper
use of toll revenues.
3)Prohibits toll money from being used for the validation
action.
4)Prohibits MTC from entering into any additional contracts with
respect to the office building until the validation action is
complete.
5)Provides that, notwithstanding existing law, the validation
action may be brought after the 60-day period provided for in
existing law.
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6)Is an urgency measure.
EXISTING LAW:
1)Creates MTC as a local area planning agency to provide
comprehensive regional transportation planning for the
nine-county Bay Area region comprised of the City and County
of San Francisco and the Counties of Alameda, Contra Costa,
Marin, Napa, San Mateo, Santa Clara, Solano, and Sonoma.
2)Prescribes the membership if MTC, to include 19 members, as
follows:
a) Two members from the City and County of San Francisco,
one member appointed by the mayor and one appointed by the
Board of Supervisors.
b) Two members each from the Counties of Alameda, Contra
Costa, San Mateo, and Santa Clara, one each appointed by
the city selection committee for each county and one each
appointed by the board of supervisors for each county.
c) One member each from the Counties of Marin, Napa,
Solano, and Sonoma, appointed by the respective boards of
supervisors.
d) One member each appointed by the Association of Bay Area
Governments and the San Francisco Bay Conservation and
Development Commission.
e) Non-voting members appointed by the Secretary, Business,
Transportation and Housing Agency, the United States
Department of Transportation, and Department of Housing and
Urban Development.
3)Creates BATA to administer all toll revenues for the
state-owned Bay Area toll bridges (except for revenues derived
from the $1 seismic toll surcharge). BATA is governed by the
same board as MTC.
4)Grants BATA broad authority, including the authority to:
a) Acquire, construct, manage, maintain, lease, or operate
any public facility or improvements; and,
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b) To invest any money not required for its immediate
necessities, as determined by BATA.
5)Sets forth provisions governing investments of surplus funds
by local agencies; includes authority for various types of
securities, not including real property except for public
pension or retirement funds.
6)Authorizes a public agency or an interested private party to
bring a "validation action" in superior court to determine the
validity of certain public agency actions. Validation actions
may be sought for up to 60 days after the agency's action.
FISCAL EFFECT : Unknown
COMMENTS : In 2011, MTC and BATA formed a joint powers agency,
the Bay Area Headquarters Authority for the purposes of
acquiring an office building in San Francisco to create a joint
regional government co-location facility. The building is
initially to serve as a regional headquarters for MTC, the Bay
Area Air Quality Management District (BAAQMD) and the Bay
Conservation and Development Commission (BCDC) and may later
house the Association of Bay Area Governments (ABAG) and the San
Francisco Bay Area Conservation and Development Commission.
In response to legislative concerns regarding the planned moved,
the Joint Legislative Audit Committee requested the State
Auditor to investigate the proposed move and specifically the
use of toll revenues to fund the purchase and improvements of
the office building. The audit is expected to be released in
August 2012 and to include, in part, the following information:
1)A review of the space needs assessment of the agencies
involved to determine the extent to which the space in the new
building meets or exceeds their respective space requirements;
2)An identification of the funding sources for the purchase of
the new building;
3)A review and assessment of BATA and MTC policies, procedures,
and internal controls to determine if there is adequate
separation between the two agencies to ensure that decisions
regarding the use of toll revenue are in the best interest of
toll payers;
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4)A determination of the appropriateness of the use of toll
bridge funds to acquire a headquarters building; and,
5)A review and assessment of the cost-benefit analysis related
to the acquisition of the new building.
According to the author, MTC's planned move is a "flagrant
misappropriation of public money." As evidence to support this
assertion, the author cites a Legislative Counsel opinion that
finds that the information regarding the purchase of the
building, "could serve as a basis for judicial determination
that the use of the bridge toll revenues to fund the purchase of
�the new building] by �the Bay Area Headquarters Authority] was
not authorized by law." Legislative Counsel based this opinion,
at least in part, on the fact that MTC and BATA plan to occupy
less than half of the planned office space and, instead, use the
building primarily for operation of a regional governance
co-location facility. As MTC and BATA have not legislative
authority to provide a regional governance co-location facility,
Legislative Counsel believes the purchase of the building using
toll revenues may be an impermissible use of those revenues.
In response, MTC asserts that:
1)The purchase was consistent with state law, as confirmed by a
legal opinion obtained from a prominent law firm; and,
2)Co-locating regional agencies will better serve MTC's efforts
to coordinate regional policies and is, therefore, directly
related to its mission and is consistent with its legislative
authorities, including, for example, developing a
comprehensive long-range transportation and land use plan that
addresses climate change.
The author has introduced SB 1545 to require MTC to pursue a
validation action, unless the State Auditor's report indicates
that MTC had clear authority to purchase the building to do so
using bridge toll revenues. Should a validation action be
required, the author also seeks to prohibit MTC from spending
any more money on additional contracts related to the building
that may later have to be cancelled, depending on the outcome of
the validation action. The author asserts, "By prohibiting MTC
from spending more public money until the audit is complete, SB
1545 will provide much needed oversight and accountability to an
agency that has lost sight of its mission."
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Writing in opposition to this bill, MTC argues that SB 1545
"interferes with a local agency decision that was properly made
and that included a two-year process, ample due diligence of all
key legal and financial questions, and a final building purchase
after a full, open and vigorous public debate." Additionally,
MTC and other opponents believe that delaying improvements to
the building will drive up costs, cause the termination of
existing contracts that will later have to be re-procured, and
delay badly needed work for the construction industry.
REGISTERED SUPPORT / OPPOSITION :
Support
California Trucking Association
City of Oakland
Oakland Metropolitan Chamber of Commerce Board of Directors
Opposition
Bay Area Air Quality Management District
California Association of Electrical Workers
California State Pipe Trades Council
International Union of Elevator Constructors
McCarthy Building Contractors
Metropolitan Transportation Commission
State Building and Construction Trades Council, AFL-CIO
Western States Council of Sheet Metal Workers
Analysis Prepared by : Janet Dawson / TRANS. / (916) 319-2093