2A Work Session 2013 0128 Supplement

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SIMON AND COMPANY INCORPORATED Intergovernmental Relations and Federal Affairs 1660 L Street, N.W. ● Suite 501 ● Washington, D.C. 20036 (202) 659-2229 ● Fax (202) 659-5234 ● e-mail: len.simon@simoncompany.com TO: San Leandro City Council City Manager Chris Zapata FROM: Len Simon SUBJECT: San Leandro Federal Priorities Briefing DATE: January 25, 2013 In preparation for our meetings on Monday, I have prepared some key points to help guide the discussion on federal priorities for San Leandro. These are outlined below. Cities, the Obama Administration and Congress. The last four years have been characterized by gridlock between an Administration and large segments of the Congress who have widely different priorities. Because of this, urban programs have been cut and new initiatives have either been rolled back or made difficult to launch. However, the Obama Administration is staffed by very capable individuals, many of whom have considerable experience in local government. And Congress can listen to city governments when the message is clear and sustained over a period of time. So despite, the hurdles and difficulties, there is reason to be hopeful for the period ahead. The Fiscal Challenge. The annual federal deficit, about $1.0 trillion annually, is not sustainable. Addressing it requires a reduction in spending in the $3-4 trillion range over 10 years. Only a small portion of that can come from urban programs. The rest needs to come from new revenues, defense and entitlement reform. Congress and the Administration are struggling with that now, as evidenced by forthcoming debates on: (a) the increase in the debt limit; (b) “sequestration” – automatic spending cuts across the board divided between defense and domestic expenditures, equaling about $1.0 trillion in cuts over 10 years; and (c) the finalizing of the budget for Fiscal Year 2013, the “Continuing Resolution” which expires March 27. Each of these presents its own opportunities for urban programs being cut or tax policy bein g altered to negatively impact cities. Earmarks. Earmarks -- direct insertion of projects into legislation by members of Congress -- were an important tool for funding city projects for more than 20 years. San Leandro benefitted from this practice for its transportation, water resources and economic development priorities. The practice has been suspended now for two years. There is some discussion of bringing it back with more stringent standards and transparency but that is not going to occur for at least two more years. So funding City projects with federal resources must be done by other means.