2009 LEADERSHIP CLASS DAY REPORT
By Melissa Borrelli of Hanson Bridgett
June 11 - Regional Issues
Special thanks to the program's sponsor for this day: Siemens
Time for another update on the Leadership Sacramento program.
Last week's theme was regional issues and focused on the American Recovery and Reinvestment Act ("stimulus package") funds and their use and impact in the Sacramento region.
Congressional Overview of the Stimulus Package
We began the day with an overview of the stimulus package from Nathan Dietrich from Congresswoman Doris Matsui's office and Marilyn Erbes from Congressman Dan Lundgren's office. It was clear that the two offices disagreed as to whether the stimulus package was the best way to stimulate America's economy but both agreed on the importance of educating the public and providing accountability and transparency in the spending.
Congressman Lundgren's office highly encourages the public to ensure the transparency and proper use of the federal funds by utilizing the http://www.recovery.gov/ and other government accountability websites.
Ms. Erbes provided a thoughtful theory of how and why America came to be in this economic situation with comparisons between other country's who have dealt with this type of crisis in the past. In the "Swedish model" of economic recovery, the government did not provide blind bail outs of banks simply to keep them all afloat. Instead, they provided targeted liquidity to banks that could prove that they met sustainability
standards. They did not believe that a particular company was too large to fail and allowed many companies to fail in order to right their markets. Ms. Erbes reported that the Swedish model allowed for a recovery within three years. In comparison, the "Japanese model" was described.
The Japanese faced a similar housing bubble pop in the late 1980s. If you think the "creative" mortgages that companies in the United States were offering were bad (i.e., no money down, 120% loans, self-reported income with no doc requirements, etc), consider that prior to the bubble pop, Japanese banks were offering 100 year, three-generation mortgages! Ms. Erbes reported that the Japanese took
the approach of keeping all of its banks afloat and that their economic recovery took fourteen years to accomplish.
Interestingly, Mr. Dietrich made the comparison between the stimulus package and the New Deal legislation. He reminded us that New Deal projects that benefited Sacramento included McClatchy High School, the Tower Bridge, the 16th Street Bridge, and Theodore Judah Elementary School, among many others.
Regardless of your opinions on the efficacy of the stimulus package, it will be interesting to see the change these funds have on the landscape of Sacramento in the years to come.
State of the Stimulus Package in the Sacramento Region
Our next panel provided an overview of how stimulus package funds are being utilized in Sacramento--how the rubber hits the road, as it were. Representatives of the City of Sacramento (government), Thomas Enterprises (private industry/development), The Effort (non-for-profit social services), and Premier Power (private clean tech company) discussed the impact of the stimulus funds on their respective industries.
Capital Projects
The Sacramento region has generally taken the approach of collaborating in their attempts to obtain stimulus funds and in prioritizing projects regionally. The Sacramento Area Council of Governments ("SACOG"), with the help and input from other regional organizations like the Metro Chamber, ranked public works projects throughout the region so that we as a region could get the most bang for our buck.
To date, SACOG has received $40 million in stimulus funds for public works projects. The group allocated half of those funds to the region's marquee project--the completion of the first phase of the downtown Sacramento Railyards. Thomas Enterprises is the private company developing the Railyards project. It is a fascinating plan that will DOUBLE the size of downtown Sacramento when it is complete. If you have
a few minutes I would encourage you to learn more about this project here: http://www.sacramentorailyards.com/home/home.htm.
The economic and job creation impact of this project is predicted to be great and it would not be happening as quickly as it is were it not for the stimulus funds. In fact, there are a number of projects in the region that would still be years from being completed were it not for the stimulus funds. The State Architect estimates that the State's unfunded maintenance needs exceed $1 trillion
so the stimulus funds are unfortunately a drop in the bucket but a welcomed source of funds nevertheless.
Social Services Projects
As of July 1, 2009 Sacramento County will have de-funded all mental illness programs in the county. This will result in 6,000 adults in the region not receiving medical and psychiatric care. Who will pick up where the County drops off? Thanks to stimulus funds the not-for-profit The Effort will be able to take up to 3,000 of these patients under its care. Additionally, The Effort will be opening health clinics
in the most needy areas of the region where, again, the County simply does not have the funds to provide services. If you would like to learn more about the work of The Effort, please click here: http://www.theeffort.org/.
Clean Tech Tax Incentives
Thanks to the stimulus package and the Energy Improvement and Extension Bill of 2008, the subsidy-driven industry of providing clean energy and technologies will receive a boost in the form of tax incentives, business loans, and grants. This is especially good news for the Sacramento region as they are well in to a large campaign to promote Sacramento as the clean-tech capital of the world, as discussed in the last update.
Tour of the Siemens Facility
Arguably the most exciting part of the day was touring the Siemens Mobility Division facility on French Road where light rail cars are manufactured from start to finish. It takes 5,000 pieces of steel and approximately 18 months for a single light rail car to be planned and manufactured. The manufacturing process itself takes a mere 4 - 5 months.
Siemens as a global company is fascinating. They are perhaps best well-known for their health care applications but they do much more. They provide 1/3 of the energy the United States needs everyday, they process 100% of the nation's mail with 4,200 sorting machines utilized by the postal service, and they hold the database with the nation's postal addresses. The yellow sticker on your mail when you have moved and need it forwarded? You can thank Siemens
for that innovation.
The tour was delightful as was meeting the folks from Siemens from the President and CEO of Siemens Mobility Division, Oliver O. Hauck, to the men on the line welding, painting, sanding, hammering, and testing the light rail cars.
Regional Stimulus Package and Transportation
Our final panel of the day focused on the stimulus funds in the region with respect to the transportation industry. Panelists included Juergen Wilder, VP and General Manager of Siemens Transportation Systems; Paul Marx, Planning Director for Regional Transit; Mike La Pier, COO of the Sacramento County Airport System; Joe Cruz, Director of Transportation Policy with the California Alliance for Jobs; and Beverly
Mason, Project Engineer with AECOM Transportation, one of the private companies working with the California High Speed Rail Authority.
The consensus among this panel is that the stimulus funds will provide much-needed money for capital and maintenance transportation projects and for educating and training the work force in this industry. The RT program will be able to provide preventative maintenance and car retrofitting thanks to the funds. While it still must balance fee increases with service reductions, the program is clearly benefiting from the stimulus
funds. Additionally, they are looking for ways to reduce their carbon footprint including possibly installing solar panels on one of their facilities.
Thanks to the leadership of Judy Robinson, Principal Planner with Sacramento County, the various County departments meet and assist each other in obtaining federal funds. They are uncovering every rock in their attempts to provide the Sacramento region with the highest quality of life. The airport in particular has benefited from this collaboration by finding and applying for sources of funds that have not traditionally been
tapped by the airport industry.
Joe Cruz happily reported that a number of projects funded under Prop 1B were able to continue because of stimulus funds--they faced being shut down due to the state's budget crisis. He also noted that for every $1 in infrastructure investment, we receive a $5 economic benefit. A powerful argument for the efficacy of the stimulus package.
The panelists also discussed the efforts now being undertaken or considered to develop public-private partnerships, particularly with the airport and the high speed rail project.
Speaking of the high speed rail project, I highly suggest you visit the official website when you have a few minutes. You can find it here: http://www.cahighspeedrail.ca.gov/. There you will find renderings and simulations of the high speed rail, a map of proposed stops, and other fascinating information. The system
itself will be an 800-mile system, electric powered, with speeds reaching up to 200 miles per hour. Arguably this project will have the most impact on California transportation since the highway builds in the 1950s.
That's all for now. Next month I am looking forward to reporting back to you regarding the business of being green, in work and play.