AMERICA'S MAYORS S U P America Fast Forward Transportation Bonds

George K. Heartwell Neil M. O'Leary Grand Rapids. MI Waterbury, CT

Gerald Peter l.ewis~~ Sally Hutton D. Jennings Albany. NY Auburn, WA Richmond, IN '\\

~, Stephanie A. Miner ~~ Steve Hogan Elizabeth Tisdahl Syracuse, NY Charlie Hales a~~r~r,. co Evanston, IL Portland, OR ~ - David C. Hartzell, Jr. i Jerry DiTullio ~, Clarence. NY ~ ~ Wheat Ridge, CO ~~ Rahm Ralph Becke Emanuel '~/lichael D. Bissonnette Chicago, IL Salt Lake City, UT Chicopee, MA BSean ek rec ~ Margaret Stock Butler, Bozeman, MT J. MichaelNou§ton FA Andy Hafen Spririgficld, IL David Coss Jon Mitchell Henderson, NV ~~ \~~ ~. Santa Fe, NM -~ Ne~v Bedford, MA Robert Scott s~oux cry, is Kevin Johnson Sacramento, CA Scott Avedisian Warwick, RI

Edwin M. Lee Greg Fischer Alberto G. Santos . CA Louisville, I

Eric Garcetti j. Richard Gray , CA ~\ Scott Foster, P.E. Lancaster, PA Hendersonville, TN Rick Gibbs ~'~ Murrieta. CA Mick Cornett Stephanie Rawlings-Blake Baltimore, MD Oklahoma City, OI(

DeRosa ~ ~ /Kathleen Lioneld Jordan Paul D. Fraim ,Cathedral Gty, CA ~ Fayetteville, AR ~. Norfolk, VA

i Cheryl Cox Scott Smith William Bell Chuf~aVista, CA Mesa, AZ I Durham, NC

John Cook _ ~ Kasim Reed EI Paso, TX Atlanta, GA

Beth Van Duyne Mitchell Landrieu John Marks Irving, TX / New Orleans, LA Tallahasce, FL

Raul G. Salinas Sandra Bradbury Laredo, TX Pinellas Park, fL

Barrington Russell, Sr. Metro Lauderdale Lakes, FL Full listing on reverse. Don Plusquellic Akron, OH Jack Tanaka Diamond Bar, CA Mark Stodola Little Rock, AR Harvey C. Skoog Prescott Valley, AZ Gerald D. Jennings Albany, NY Carleton E. Carey, Sr. Dover, DE Don Jensen Longview, WA Sandra E. Frum Northbrook Village, IL Ed Pawlowski Allentown, PA William Bell Durham. NC Chase Ritenauer Lorain, OH Sarah Strommen Ramsey, MN H. Dean Maxwell Anacortes, WA Marcia Leclerc East Hartford, CT Los Angeles, CA Linda Budge Rancho Cordova, CA Kasim Reed Atlanta, GA Michael Tautznik Easthampton, MA Greg Fischer Louisville, KY John Marchione Redmond, WA Pete Lewis Auburn, WA Sal Panto Easton, PA Robert A. B. Reichert Macon, GA Dan Rizzo Revere, MA William R. Stokes Augusta, ME Antonia Ricigliano Edison, N) Paul R. Soglin Madison, WI Sally Hutton Richmond, IN Steve Hogan Aurora, CO Richard Young EI Campo, TX Gary Christenson Malden, MA Dean Uecker Ripon, CA Steve Bonkowski Bainbridge Island, WA John Cook EI Paso, TX Bruce C. Delgado Marina City, CA Pam Stafford Rohnert Park, CA Stephanie Rawlings-Blake Baltimore, MD Gary Davis Elk Grove, CA John Christopher Soff Meadville, PA Susan Rohan Roseville, CA Denny Doyle Beaverton, OR Joseph E. Sinnott Erie, PA Scott Smith Mesa, AZ Kevin Johnson Sacramento, CA Emmett Pugh III Beckley, WV Kitty Piercy Eugene, OR R.T. Rybak Minneapolis, MN Ralph Becker Salt Lake City, UT William W. Brien, MD Beverly Hill, CA Elizabeth Tisdahl Evanston, IL Ken Tracy Mitchell, SD Tomas T. Odell Sammamish, WA Sean Becker Bozeman, MT Ray Stephanson Everett, WA Mary Ann Lutz Monrovia, CA Patrick ). Morris San Bernardino, CA Ron Garcia Brea, CA Thomas Nagel Fairborn, OH David Trotter Moraga, CA Edwin M. Lee San Francisco, CA Bill Finch Bridgeport, CT Lioneld Jordan Fayetteville, AR Tommy Bragg Murfreesboro, TN Chuck Reed San Jose, CA Bryan Thompson Brunswick, GA Karen Weitkunat Fort Collins, CO Rick Gibbs Murrieta, CA Jan Marx San Luis Obispo, CA Jack Hakim Bullhead City, AZ Betsy Price Fort Worh, TX Roger Van Horn Nacogdoches, TX Genoveva Garcia-Calloway San Pablo, CA Margaret Stock Butler, PA Bill Harrison Fremont, CA Jon Mitchell New Bedford, MA David Coss Santa Fe, N M Edwin Garcia ~amuy, PR Marylou Powers Galt, CA Mitchell Landrieu New Orleans, LA Pam O'Connor Santa Monica, CA Matt Hall Carlsbad, CA John Lewis Gilbert, AZ Alan Nagy Newark, CA Robert Scott Sioux City, IA Kathleen DeRosa Cathedral City, CA Joseph A. Santoro Glendora, CA McKinley L. Price Newport News, VA Brenda L. Lawrence Southfield, MI Mark Kleinschmidt Chapel Hill, NC Georgia Lord Goodyear, AZ Setti Warren Newton MA Noramie F. Jasmin Spring Valley, NY Patsy Kinsey Charlotte, NC George K. Heartwell Grand Rapids, MI Paul A.Dyster Niagara Falls, NY J. Michael Houston Springfield, IL John A. Linder Chester, PA Gary Herbert Greensburg, IN Paul D. Fraim Norfolk, VA Francis F. Slay St. Louis, MO Rahm Emanuel Chicago, IL Shane Bemis Gresham, OR Chris Koos Normal, IL Pete Sanchez Suisun City. CA Scott Gruendl Chico, CA Paul Hicks Hastings, MN Jean Quan Oakland, CA Michael J. Ryan Sunrise, FL Michael D. Bissonnette Chicopee, MA Andy Hafen Henderson, NV Mark Bartel of San Jacinto, CA Sharon Wolcott Surprise, AZ Peter Rogers Chino Hills, CA Scott Foster, P.E. Hendersonville, TN Mick Cornett Oklahoma City, OK Stephanie A. Miner Syracuse, NY Cheryl Cox Chula Vista, CA Jerry W. Willey Hillsboro, OR Linda L. Witte Olean, NY Marilyn Strickland Tacoma, WA David C. Hartzell, Jr. Clarence, NY James Thomas, Jr. Hinesville, GA JoeChilsen Onalaska, WI John Marks Tallahassee, FL Michael B. Coleman Columbus, OH Beth Van Duyne Irving, TX Max A. Smith Oneida, NY Mark W. Mitchell Tempe, AZ Nelda Martinez Corpus Christi, TX Bobby J. Hopewell Kalamazoo, MI Doug Neely Oregon City, OR Claudia Bill-de la Pena Thousand Oaks, CA Andrew N. Weissman Culver City, CA Sly James Kansas City, MO Buddy Dyer Orlandq FL John Cook Tigard, OR Joe Krovoza Davis, CA Alberto G. Santos Kearny, NJ Bill Bogaard Pasadena, CA Caro) Dutra-Vernaci Union City, CA Mark Burroughs Denton, TX David Baker Kennmore, WA Shawn Connors Pecatonica, IL Judy Ritter Vista, CA Michael B. Hancock Denver, CO Richard V. Clanton Kentwood, MI Frank C. Ortis Pembroke Pines, FL Scott Avedisian Warwick, RI Dave Kaplan Des Moines, WA Bob Murphy Lakewood, CO Phillip Houk Pendleton, OR Neil M. O'Leary Waterbury, CT Dave Bing Detroit, MI J. Richard Gray Lancaster, PA Greg Stanton Phoenix, AZ Karen Heck Waterville, ME Raul G. Salinas Laredo, TX Sandra Bradbury Pinellas Park, FL Jeffrey Prang West Hollywood, CA Ken Miyagishima Las Cruces, NM George Fowler Pineville, NC Jeri Muoio West Palm Beach, FL Barrington Russell, Sr. Lauderdale Lakes, FL Harry LaRosiliere Plano, TX William R. Wild Westland, MI Philip Craighead Lebanon, TN Maria "Mayita" Melendez Ponce, PR Susan M. Kay Weymouth, MA a John Manchester Lewisburg, WV Charlie Hales Portland, OR Jerry DiTullio Wheat Ridge, CO David Berger Lima, OH Bill Gillespie, Jr. Prattville, AL Randy Riley Wilmington, OH 0 Mletro O 0 Executive Management Committee Remarks Delivered By Raffi Haig Hamparian Government Relations Director, Federal Affairs November 21, 2013

Federal Remarks

Chair DuBois and members of the committee, I am pleased to provide an update on a number federal transportation issues that impact our agency.

Continuing Resolution and Debt Ceiling:

4Ve are closely monitoring the budget conference which is seeking to clear the way for funding the federal government for the balance of Fiscal Year 2014.

The current continuing resolution funded the federal government through January 15, 2014 and raised the debt ceiling through February 7, 2014.

We have been in touch with the U.S. Department of Transportation and have received assurances that even if a long-term funding bill is not adopted by Congress - DOT officials are inclined to move forward with our Full Funding Grant Agreements and TIFIA loans.

Recent Congressional Bill Introductions:

Over the last several weeks, several pieces of legislation have been introduced to address the looming solvency issues faced by the Highway Trust Fund.

Congressman Earl Blumenauer (D-OR) has introduced a measure to increase the gas tax by 15-cents - consistent with the recommendation embedded in the Simpson-Bowles report. His bill also seeks to transition federal funding from the gas tax to a Vehicle Miles Traveled system by 2024.

Senator Mark Warner (D-VA) has introduced legislation known as the BRIDGE Act - with support from a bi-partisan group of legislators - that would create an Infrastructure Financing Authority to complement existing funding mechanisms and expand overall infrastructure investment. According to Senator Warner, "this institution, which would provide loans and loan guarantees, would be both fiscally responsible and robust enough to help address America's infrastructure deficit."

And a third piece of legislation has been offered by Senator Mike Lee (R-UT) and by Congressman Tom Graves (R-GA) in the House. This bill - entitled the Transportation Empowerment Act - would transfer almost all authority over federal highway and transit programs to the states over a five-year period. Concurrently, the legislation would lower the federal gas tax to 3.7 cents from 18.4 cents over the same time period.

Federal Freight Issues:

This week, the Federal Highway Administration (FHWA) released a draft initial designation of our nation's Primary Freight Network (PFN). MAP-21, our current surface transportation bill, mandated the establishment of a National Freight Network (NFN) to, as shared by the FHWA, "focus resources on the most important highways and roadways for freight transportation. The NFN contains three components - the Primary Freight Network, all Interstate Highways not included on the Primary Freight Network, and the Critical Rural Freight Corridors.

The Primary Freight Network will be designated by USDOT and includes up to 27,000 centerline miles of roadways that are most critical for freight movements. Various factors were examined when identifying which routes would be designated as part of the draft highway Primary Freight Network."

The document released this week solicits comments from our agency and other stakeholders from across the nation on the draft initial designation of both the PFN and NFN. Our agency is currently reviewing the document issued by the FHWA and slated to be printed in the Federal Register on November 19, 2013. Comments to the FHWA must be submitted 30 days after the date of publication in the Federal Register. We look forward to providing our agency's input on this item to the FHWA. The FHWA intends to release its initial designation of the full NFN prior to the end of calendar year 2014.

America Fast Forward Transportation Bonds:

We are continuing to work with our local and national partners to advance our America Fast Forward Transportation Bond proposal. we expect the White House to include their own America Fast Forward bond proposal in their upcoming Budget Proposal to be released early next year.

The White House proposal, which while not exactly our plan, is a tribute to our Board-approved initiative.

We are thankful that groups, like the Los Angeles Area Chamber of Commerce for securing support from over 20 Chambers of Commerce in support of our America Fast Forward program. The President and CEO of the Chamber Gary Toebben is continuing to collect backers for the AFF program on a weekly basis. z We are also grateful that groups like BizFed have made our America Fast Forward Transportation Bond initiative a centerpiece of their federal priorities.

We are also encouraged that nearly 200 mayors from across America have joined our AFF initiative. Over the next several months, we anticipate dozens of Chambers of Commerce and dozens more mayors from across the joining our AFF initiative.

Positive Train Control:

We recently met with the Deputy Administrator of the Federal Railroad Administration Karen Hedlund. She reiterated the position articulated by Federal Railroad Administration's Administrator Joe Szabo on Positive Train Control that closely mirrors ours. Specifically, the FRA Administrator has conveyed to commuter rail operators recently that any alternative PTC technology to be considered by FRA must meet the same, or greater, safety standards as PTC. He also referenced that alternative PTC technologies must be interoperable with PTC systems.

PEPRA 13C Issue:

We are obviously pleased that the PEPRA/13C issue is behind us. We continue to get our grants - which were being held up by the U.S. Department of Labor - cleared by the FTA. This is very good news.

Conclusion:

Chair DuBois that concludes my remarks before the committee. I would welcome the opportunity to respond to any questions you or members of the committee may have.

3 Executive Management Committee Remarks Delivered by Michael Turner Government Relations Director, State Affairs November 21, 2013

State Remarks

Good Morning Madame Chair and members.

Yesterday the Legislative Analyst's Office issued its 2014-15 Fiscal Outlook. This report is the unofficial opening of the budget process in Sacramento because it lays out expected revenues and expenditures for the upcoming state budget. Yesterday's report highlighted that the state is expected to experience end the fiscal year with a reserve of $5.6. That is a significantly different projection than the state has experienced over the last few years. This surplus is largely attributable to the passage of Proposition 30 as well as the budget reductions put in place over the last few years. While this creates a certain amount of stability in the state's fiscal condition we cannot be certain that any new opportunities may be available for transportation funding.

The main news with respect to transportation however is quite different. The state's investment in transportation is going to fall off a fiscal cliff next year as transportation revenues will fall by 50%. This is largely due to the fact that the state has allocated most of the Proposition 1B dollars. Proposition 1B was passed in 2006 and to the state's credit much of the bond has been allocated and many of these projects are now under construction. However, there is no new money on the horizon.

This occurs at a time when local revenues constitute over 600 of the funds that are available.

In response to the looming crisis in state funding Transportation and the Alliance for Jobs filed an initiative with the Attorney General this week which could provide funding for our transportation system. This measure would phase in an increase in the vehicle license fee over a four year period. The fee would be increased by a quarter percent each year for four years and could ultimately generate up to $3 billion. The funds would be allocated 50% to cities and counties for street and road repair, 40% to the state's highway maintenance account and 10% to public transit. The sponsors reiterate that they intend t to work with the legislature on a funding solution.

Additionally, the Secretary of Transportation has announced a broad outline of priorities deriving from the California Transportation Infrastructure Priorities working group. These priorities include preservation, integration, innovation and reform. The specific actions largely take advantage of existing opportunities but we are

4 hopeful that this process expands and provides additional opportunities to advance our program here in Los Angeles.

Looking forward to next year, we anticipate that one of the major transportation issues which will be addressed next year will be the subject of managed lanes. Many around the state are watching our Express Lanes project and its success. Our program however was only authorized for two years by the state and we need to pursue legislation next year that will make that program permanent. The Administration has commented recently that local sales taxes and toll projects should be contributing to highway maintenance. Metro has consistently maintained that control of and the use of toll revenues should remain with the entity that is carrying the risk of a project. Allowing the use of toll revenues for maintenance associated with the toll project is a discussion we can have, however, the state is still the owner of the highway system and the owner still retains the responsibility to maintain its entire facility.

It is also possible that the legislature may consider placing a lower vote threshold proposal on the fall ballot. There are a number of proposals pending in the Legislature at this time. Senate President pro tem Darrel Steinberg has said that he wants to debate these proposals early next year so it is possible that a measure may be placed on the ballot, most likely in the fall. A number of issues with respect to the lower vote threshold remain unresolved. For example, it is not even clear that the Legislature would put such a measure on the ballot next year. It is not clear if the measure would be specific to transportation related taxes or other local taxes, and it is not clear what types of conditions may be imposed in a constitutional amendment.

Last but certainly not least is cap and trade. Last year, the governor proposed and the legislature ultimately agreed to loan $500 million in cap and trade funds to the State's General Fund. That loan is due to be repaid next year and of course the cap and trade funds could actually begin to flow next year. The state must still resolve a number of issues with respect to cap and trade. These include the percentage that would be allocated to transportation, the amount that would be controlled by local agencies, the amount that would be taken for debt service the amount that would be used for high speed rail and whether or not housing projects will be funded out of transportation's share or from a separate allocation.

We will keep the Board apprised of all developments on these issues as the year progresses. Madame Chair and members, that concludes my report.

5 Ifi-~M 52

Declining Highway Funding (Adjusted for Construction Cost Index, in 11/12 doilarsj

6,000,000

5,000,000

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