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sr-042710-1iCity Council Meeting: April 27,2010 Agenda Item: t a To: Mayor and City Council From: Barbara Stinchfield, Director, Community & Cultural Services Subject: State Parks Access Initiative Recommended Action Staff recommends that the City Council direct staff to work with the City's lobbyist, other impacted local entities and officials of the State Department of Parks and Recreation to ensure that the interests of the City of Santa Monica as operators of Santa Monica State Beach are protected under the proposed State Parks Access Initiative. Executive Summary This report provides information about the State Parks Access Initiative (Initiative), proposed for the November 2, 2010 California ballot. The Initiative would add an $18 surcharge to the registration fee for all California vehicles and would provide free day use parking to those vehicles at all state parks, including those operated by local entities such as Santa Monica State Beach. Since parking revenues account for nearly 95% of the costs for operation of Santa Monica Beach, there are a number of concerns about the potential impacts of the Initiative on the City's ability to maintain its high standard of stewardship of the largest and most popular open space in the region. The report identifies areas needing further clarification and seeks direction from the Council to continue working with the City's lobbyist, other impacted entities, and officials of the California State Parks Foundation and State Department of Parks and Recreation to preserve and protect the interests of Santa Monica State Beach. Background The California State Parks Foundation (CSPF) has filed a proposed statewide ballot measure called the State Parks and Wildlife Conservation Trust Fund Act and is working to qualify it for the November 2010 ballot. The measure, also known. as the State Parks Access Pass, would generate revenues through an $18 annual State Park Access Pass surcharge on all California cars, motorcycles and recreational vehicles that would be collected by the Department of Motor Vehicles as part of the annual vehicle 1 license fee. The funds would create the State Parks and Wildlife Conservation Trust Fund ("Trust Fund") and could only be spent on state parks, wildlife, natural lands and ocean conservation programs. All California vehicles and their occupants would have free day use admission to all state parks throughout the year. The proposed surcharge is expected to yield $500 million in revenues based on the number of registered vehicles. Of this amount, 85% would be allocated to the State Department of Parks and Recreation for its own needs and 15% to other state wildlife and ocean protection agencies. A copy of the initiative is included in this report as Attachment A. The California State Parks Foundation submitted signatures to the Attorney General on April 16, 2010 and expects they will be certified in May or June. If certified, the campaign will begin over the summer until the November 2 election. If the measure passes, it will be effective on January 1, 2011; however it is not expected to be operational until July 1, 2011 after a regulatory framework is developed. The development of this framework will include public hearings as well as opportunities for impacted local entities to provide input so that their interests as operators of State Park units are protected. Discussion Impact on Local Entities Operating State Park Units While the purpose of the proposed initiative is to create a stable, reliable source of funding for the state parks system which has been underfunded for many years and has severe deferred maintenance needs., it presents considerable challenges to local entities, such as the City of Santa Monica, that are responsible for operating units of the State Park System. There are about thirty state parks or state beaches operated by California cities and counties on behalf of the State. Most of these units charge day use fees, although some do not. The 5000 public parking spaces along Santa Monica State Beach are all part of the State Park System and comprise one unit. Five percent of the State Parks Department allocation of 85% would go to these local entities to offset the loss of day use revenues and/or to assist in the operation and maintenance of the units. 2 However, it is not clear how the allocation of funds would be determined or specifically how local entities would be compensated for loss of day use revenue and how future operating cost increases would be addressed. Impact on Santa Monica State Beach The City of Santa Monica operates Santa Monica State Beach under along-term Operating Agreement with the State Department of Parks and Recreation. Under the terms of the agreement, all revenues generated though parking, concessions, and special events at the beach are deposited in the Beach Fund for the management, maintenance, and improvement of Santa Monica State Beach. Additionally, the City operates the Annenberg Community Beach House, located on Santa Monica State Beach, under a separate Operating Agreement with the State Department of Parks and Recreation with all revenues generated from activities on the property going to support the operation of the Beach House. Parking fees are the primary source of revenue for the Beach Fund. Since 1996 parking revenues have covered, on average, 95% of the costs needed to support beach operations, including beach maintenance, lifeguard services, and police beach patrol. Revenues generated from beach concessions, filming, and special events have enabled the Beach Fund to support $10 million in capital improvements over the same period. Parking revenues currently average $6 million per year and are projected to generate $6.8 million for FY 2010/11 and up to $7.4 million by FY 2014-15. Areas of Concern reaarding the Proposed Initiative In an effort to understand the potential impacts of the State Parks Initiative, staff has identified a number of key concerns/questions and made initial contact with the City's lobbyist and representatives of the California Parks Foundation to seek clarification. The following outlines key issues and general information received to date: 1. Is the 5% set aside for local units of the State Park system sufficient to cover all local grants? The intention of the initiative is to ensure that adequate funds are 3 available for local entities, however specific data on the revenue loss for local entities was not calculated as part of the information gathering and there is concern that the 5% may not be sufficient. 2. How would Santa Monica be compensated for loss of parking revenue? The initiative refers to two types of grants, one based on compensation for revenue loss and one based on three-year average of operating costs.- The guidelines have not been developed for either of these grants and it is not clear which one would apply to the City. This may be one area that the City, along with other local entities, might be able to provide input to the State as they develop the regulatory framework should the initiative pass. A further concern regarding the revenue compensation grant is that there is no escalator that would cover the increases that would have been available to the City under its current operating agreement. 3. Would the proposed grants provide funding for future capital improvements? The local set aside funds are for operation and maintenance with some additional support for deferred maintenance. Requests for capital improvement funds would be subject to negotiation with State Department of Parks and Recreation under separate grant programs. 4. How will the City manage the potential unintended consequences of significant use of free beach parking by commuters and other non-beach users? Concerns about access and overcrowding are significant since a major portion of the 5000 beach parking space inventory is located within walking distance of the terminus of the future light rail. Any measure that the City might take to Increase enforcement and control traffic will increase costs over and above the current operations. 5. How does the requirement that "all state park fee and concession revenues" be deposited in the new Trust Fund apply to Santa Monica? This requirement is intended to protect State Parks and Recreation funds from budget raids and further clarification may be needed to ensure that concession and other revenue covered by the City's Operating Agreement would be excluded from the Trust Fund. There are legal constraints applicable to the City's work on the measure. California law prohibits cities from expending public funds to support or oppose ballot measures. However, the law allows expenditures to provide objective information to the public about the possible effects of the measure on the City's activities. And, the law allows local legislative bodies to take positions on ballot measures. 4 Commission Action During its February 18, 2010 meeting, the Recreation and Parks Commission reviewed and discussed the proposed initiative. At the April 15, 2010 Commission meeting, additional information was received from City staff. After discussion, the Commission voted unanimously to recommend to the City Council to direct staff to continue to work towards a regulatory framework that, if the initiative passes, would not put Santa Monica at a disadvantage, while remaining cognizant of the need to balance local interests with the obvious state-wide benefits that the initiative would provide. Financial Impacts & Budget Actions No budget actions are needed at this time. Staff will return with formal action, if needed as more information becomes available. Prepared by: Judith Meister, Administrator Approved: Forwarded to Council: Barbara Stinchfield Rod Gould Director, Community & Cultural Services City Manager Attachment 1: Proposed Initiative 5 Attachment 1 State Parks and Wildlife Conservation Trust Fund Act The People of the State of California find and declare all of the following: (1) California's natural resources and wildlife must be preserved and protected for future .generations. (2) The California State Park System is essential to protecting these resources for the people of California. Alorig with the wildlife protection and conservation agencies of the state, the State Park System is responsible for preserving the state's unique wildlife, natural lands and ocean resources. (3) Persistent underfunding of the State Park System and wildlife conservation has resulted in a backlog of more than a billion dollars in needed repairs and improvements, threatens the closure of parks throughout the state and the loss of protection for many of the state's most important natural and cultural resources, recreational opportunities and wildlife habitat. (4) California's State Park System benefits all Californians by providing opportunities for recreation, nature education, preservation of cultural and historic landmarks, and by protecting natural resources that improve the state's air and water quality. (5) Californians deserve aworld-class State Park System that will preserve and protect the unique natural and cultural resources of the state for future generations. (6) Rebuilding the State Park System and protecting the state's wildlife resources will grow California's economy and create jobs by drawing millions of tourists each year to contribute to the state's multibillion dollar tourism. economy. (7) It is the intent of the People in enacting this measure to protect the state's resources and wildlife by establishing a stable; reliable, and adequate funding source for the State Park System and for wildlife conservation; and toprovide-increased and equitable access to those resources for all Californians. (8) It is further the intent of the People that the State Park System be operated and maintained at a level of excellence, allow increased access to state parks for all Californians while continuing to charge out of state visitors for the use of state parks, and protect the state's natural and cultural resources, recreational opportunities, and wildlife for future generations. Chapter 1.21 is added to the Public Resources Code, to read: Chapter 1.21 State Parks and Wildlife Conservation Trust Fund Act Article 1. Trust Fund 5081. There is hereby established the State Parks and Wildlife Conservation Trust Fund in the State Treasury. All money deposited in the fund shall be held intrust for the People of the State of California and used solely for the purposes of this chapter. The moneys in the fund shall be available for appropriation only for the following purposes: (a) Operation, maintenance, and repair of facilities, including visitor centers, restrooms, campsites, and ranger stations, in the State.Park System. (b) Wildlife conservation and protection of natural resources, including forests, other natural lands, arid lands that provide clean water, clean air and protect the health of people and nature. (c) Expanding public access to the State Park System and natural areas through outreach, public education, improved transportation access and providing for the safety and security of park visitors. (d) Development, management and expansion of state park units and facilities as needed to provide and enhance public access and recreational opportunities. (e) Protecting,rivers, lakes, streams, coastal waters and marine resources. (f) Grants to local agencies that operate units of the State Park System to offset the loss of day use revenues as provided in this chapter, and to state and local agencies that manage river parkways. (g) Protecting and restoring state park cultural and historical resources. (h) Auditing and oversight of the implementation of this act to ensure that funds are only spent in accordance with the provisions of this act and are not diverted or misspent. (i) Other costs related to the operation and management of the State Park System. (j) Collection costs for the State. Park Access Pass. 5082. The Department of Parks and Recreation shall prepare a strategic plan to improve access to the State Park System that addresses the needs of each region of the state and identifies programs and policies consistent with this act to improve access to state parks and state park services and benefits to underserved groups and regions. 5082.5. For the purposes of this chapter "fund" means the State Park and Wildlife Conservation Trust Fund. 5082.6. For the purposes of this chapter "department" means the Department of Parks and Recreation. 5082.7. For the purposes of this chapter, "wildlife" has the same meaning as provided in Section 711.2 of the Fish and Game Code. Article 2. Fiscal Accountability and Oversight 5085. (a) The State Parks and Wildlife Conservation Trust Fund shall be subject to an annual independent audit by the State Auditor that shall be released to the public, placed on the department's website, and submitted to the Legislature for review as part of the State Budget. (b) Up to 1 % of the annual revenues of the fund may be used for auditing, oversight and administrative costs for this article and costs foi• collection of the State Parks Access Pass. (c) The Secretary of Natural Resources shall establish a Citizens Oversight Committee to review the annual audit and issue a public report on the implementation of the this act and its effectiveness at protecting state parks and natural resources. Members shall include citizens with expertise in business and finance, park management, natural resource protection, cultural and historical resource protection, and other disciplines as may be deemed necessary by the Secretary. 5085.5. Funds deposited into the State Parks and Wildlife Conservation Trust Fund, together with any interest eamed by the fund, shall be used solely for the purpose of this chapter and shall not be subject to appropriation, reversion, or transfer for any other purpose, may not be loaned to the General Fund or any other fund for any purpose and shall not be used for the payment of interest, principal or other costs related to general obligation bonds. 5086. Notwithstanding any other provision of law, all state park fee and concession revenues shalt be deposited into the State Parks and Recreation Fund pursuant to Section 5010, and, together with any interest earned thereon, shall be available for appropriation only to the Department of Parks and Recreation for operation, management, planning and development of the State Park System and shall not be subject to appropriation, reversion, or transfer for any other purpose, may not be loaned to the General Fund or any other fund for any purpose and shall not be used for the payment of interest, principal or other casts related to general obligation bonds. 5086.5. It is the intent of the people in enacting this chapter to provide a stable and adequate level of funding to the Department of Parks and Recreation. General Fund monies used to support the department may be reallocated to other uses if the Legislature determines that the financial resources provided from the State Parks and Wildlife Conservation Trust Fund and the State Parks and Recreation Fund are adequate to fully maintain and operate the State Park System: Article 3. State Park Access Pass 5087. (a) All California vehicles subject to the State Park Access Pass shall have free admission to all units of the state park system and to designated state lands and wildlife areas as provided in this chapter. (b) For the purposes of this section "free admission" means free vehicle admission, parking and day use at all units of the State Park System and shall be subject only to those limitations as the department deems necessary to manage the State Park System to avoid overcrowding and damage to natural and cultural resources and for public health and safety. Other state and local agencies shall designate those lands whose management and operation is funded pursuant to this chapter for free vehicle access where such access is consistent with the management objectives of the land. As used in this subdivision, free admission does not include camping, tour fees, swimming pool fees, the use of boating facilities, museum and special event fees, any supplemental fees, or special event parking fees: 5087.1. The department shall issue rebates of the State. Park Access Pass surcharge to veterans who qualify for a park fee exemption pursuant to Section 5011.5. Article 4. Allocation of State Park and Wildlife Conservation Trust Fund Revenues 5088. Except for the costs pursuant to Article 2 of audits, oversight and collection costs, all funds deposited in the State Park and Wildlife Conservation Trust Fund shall be allocated only to the following agencies and as provided in this section: (a) Eighty five percent (85%) shall be available for appropriation from the fund to the Department of Parks and Recreation. Except for costs for grants and grant management pursuant to Section 5088.1., all funds allocated for appropriation to the Department of Parks. and Recreation shall be used only for operation, management, planning and development of the State Park System. (b) Seven percent (7%) shall be available for appropriation from the fund to the Department of Fish and Game for the management and operation of wildlife refuges, ecological reserves and other lands owned or managed by the Department of Fish and Game for wildlife conservation. (c) Four percent (4%) shall be available for appropriation from the fund to the Ocean Protection Council for marine wildlife conservation and the protection of coastal waters; with first priority given to the development, operation, management, and monitoring of marine protected areas. (d) Two percent (2%) shall be available for appropriation from the fund to state conservancies for management, operation and wildlife conservation on state lands that are managed for park and wildlife habitat purposes by those conservancies. A state conservancy may provide grants to a local agency that assists the conservancy in managing state owned lands under that conservancy's jurisdiction. (e) Two percent (2%) shall be available for appropriation from the fund to the Wildlife Conservation Board for grants to local public agencies for wildlife conservation. 5088.1. The department shall develop and administer a program of grants to public agencies to enhance the operation, management and restoration of urban river parkways providing recreational benefits and access to open space and wildlife areas to underserved urban communities. The department shall allocate each year an amount equal to four percent (4%) of the funds deposited in the State Park and Wildlife Conservation Trust Fund from the funds the department receives pursuant to subdivision (a) of Section 5088. For the purposes of this section, "public agencies" means state agencies; cities, counties, cities and counties, local park districts, and joint powers authorities. In consultation with the California River Parkway Program. (Chapter 3.8 (commencing with Section 5750) of Division 5), the department shall adopt best management practices for stewardship, operation, and management of urban riverparkways. The department shall consider those best management practices and providing continuity of funding for urban river parkways when allocating grant funds pursuant to this section. The department shall give highest priority for grants to urban river parkways that benefit the most underserved communities. 5088.2. The department shall provide grants to local agencies operating units of the State Park System to assist in the operation and maintenance of those units. The department shall first grant available funds to local agencies operating units of the State Park System that, prior to the implementation of this chapter, charged entry or parking fees on vehicles, and shall allocate any remaining funds, on a pro-rated basis, to local agencies to assist in the operation and maintenance of state park units managed by local agencies, based on the average anhual operating expenses of those units over the three previous years, as certified by the Chief Financial Officer of such local agency. Of the funds provided in subdivision (a) of Section 5088, an amount equal to five percent (5%) of the amount deposited in the fund shall be available for appropriation for the purposes of this section. The department shall develop guidelines for the implementation of this section. 5089. For the purposes of this chapter, eligible expenditures for wildlife conservation include direct expenditures and grants for operation, management, development, restoration, maintenance, law enforcement and public safety, interpretation, costs to provide appropriate public access, and other costs necessary for the protection and management of natural resources and wildlife including scientific monitoring and analysis required for adaptive management. 5090. Funds provided pursuant to this chapter, and any appropriation or transfer of those funds, shall not be deemed to be a transfer of funds for the purposes of Chapter 9 (commencing with Section 2780) of Division 3 of the Fish and Game Code. SEC. 2. Section 10751.5 is added to the Revenue and Taxation Cade, to read: 10751.5. (a) Except as provided in subdivision (b), in addition to the licehse fee imposed pursuant to Section 10751, for licenses and renewals on or after January 1, 2011, there shall also be imposed an annual surcharge, to be called the State Parks Access Pass, in the amount of eighteen dollars ($18) on every vehicle subject to the license fee imposed by that section. All revenues from the surcharge shall be deposited into the State Parks and Wildlife Conservation Trust Fund pursuant to subdivision (a) of Section 5081 of the Public Resources Code. (b) The surcharge established in subdivision (a) shall not apply to the following vehicles: (1) Vehicles subject to the Commercial Vehicle Registration Act (Section 4000.6 of the Vehicle Code). (2) Trailers subject to Section 5014.1 of the Vehicle Code. (3) Trailer coaches as defined by Section 635 of the Vehicle Code.