Santa Cruz CountyBusiness Council:2015 Annual Report

February 18th, 2016

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P.O. Box 1267 Freedom, CA 95019 (831) 515-2118 www.sccbusinesscouncil.com

Santa Cruz County Business Council Members:

2015 was a year of change. Change in executive directors, change in engagement practices and a clear direction to be a part of the solutions for our county. This annual report is a reflection of our past, our achievements and the steps we take towards a more vibrant community.

The Business Council is a trusted voice of the business community and an effective advocate for sustainable change. During the past two years, 2014-2015, Peggy Dolgenos, our out-going Chair of the Business Council led us through those changes while focusing on the critical issues facing our county and the region - housing, transportation infrastructure, water systems, and our educational system to name just a few. She has set a positive tone for the council. Thank you Peggy for your leadership, your uncanny and thoughtful approach. We deeply appreciate your leadership and know you will continue as an active member of the Business Council in the year ahead.

2016 will be a pivotal year. It is time to turn the corner on these issues and really pave a path for a sustainable future. Our success in the past is due largely to the personal commitment of our membership. To be thought leaders seeking solutions we need to be actively engaged in the policy making decisions process. In 2016, the Council will re-invest our energy in the future of our region - one business at a time, one policy issue at time and in a collective effort, we will make a positive difference.

Thank you for joining us in this process.

Sincerely,

Sid Slatter, President, Slatter Construction

Chair, SCCB

Casey Beyer, Executive Director

SCCBC

2015 Board of Directors AT&T Barry Swenson Builder Bay Federal Credit Union Comerica Bank Cruzio Internet Dominican Hospital First Alarm Graniterock Grunsky Law Hutchinson & Bloodgood LLP Lighthouse Bank Marianne’s Ice Cream Pajaro Dunes Company Palo Alto Medical Foundation PG&E Physicians Medical Group of Santa Cruz County Plantronics Santa Cruz County Association of Realtors Santa Cruz County Bank Santa Cruz Sentinel Shadowbrook/The Crow’s Nest Slatter Construction University of California, Santa Cruz Wells Fargo Commercial Wells Fargo Insurance Services

MAJOR LEGISLATIVE ACHIEVEMENTSWater Supply Advisory Commission Recommendation

After 18 months of education and deliberation the City of Santa Cruz Water Supply Advisory Commission delivered a recommendation to the City Council in November of 2015 to address the City’s long term projected supply shortfall. The Recommendation relies first on the preferred strategies of In Lieu Recharge, and Aquifer Storage and Regeneration (ASR), but also contains the backup options of Recycled Water and Desalination. The City Council formally adopted the recommendation, but elected to not put the measure up for a City wide vote.

Business Council Board Member, and Current 2016 President Sid Slatter served on the WSAC as the Business Council’s appointed representative. Sid, in working other commissioners, was instrumental in ensuring that a supplemental supply option be included in the final recommendation, and that there be appropriate “triggers” in place to guarantee that the City has an adequate and reliable water supply plan should the preferred alternative options fail to work.

Business Council staff, in addition to providing support to sympathetic WSAC members, also spoke in favor of the recommendation at public meetings, wrote letters supporting the commission’s efforts, and even adopted a formal stance to support their final recommendation.

Regional Transportation Commission Expenditure Plan

In December of 2015 the Santa Cruz County Regional Transportation Commission formally voted to adopt an expenditure plan for the likely 2016 Transportation Ballot Measure, which would increase the County-wide sales tax by a half cent to fund local transportation projects. The expenditure plan outlines five core project areas: Neighborhood Projects, Highway Corridors, Mobility Access, Rail Corridor, and Coastal Rail Trail.

The Santa Cruz County Business Council has taken an active role in helping to move a potential measure toward the ballot. SCCBC members have contributed money for polling of likely voters, provided extensive input to RTC staff and board members, and have spoken in favor of the measure at public meetings. SCCBC members and staff have also engaged in critical discussions with other organizations likely to support the measure, including Friends of the Rail & Trail, the Land Trust of Santa Cruz County, and the Santa Cruz Area Chamber of Commerce; in an effort to build a broad coalition of business and environmental interests.

Annual Report 2015

MAJOR LEGISLATIVE ACHIEVEMENTSSanta Cruz County and City Housing Elements

2015 was a pivotal year for housing within our community as rents and the median home price continued to climb to all time record highs. However, 2015 was also an important year for Housing policy as all of the local municipalities were required to pass Housing Elements.

A Housing Element is a section of a given agency’s general plan that assesses the need for additional zoning in order to meet the expected population growth of the next 7 years. These numbers are referred to as Regional Housing Needs Allocation (RHNA), and they are assigned based upon the research conducted by a regional state agency, which in our case is the Association of Monterey Bay Area Governments (AMBAG). While the State does get the final say over whether to certify a housing element or not (meaning they reserve the right to withhold funds), a City/County must only have adequate zoning for certification. There is no real requirement to build the units.

Business Council staff were present during all phases of the Housing Element adoption process. We continuously expressed our desire to use the Housing Element as a way to adopt more forward thinking policies that would encourage the development of more housing beyond just zoning, and the reduction of existing barriers to development. The results of our effort and continual involvement were that the two largest and most important housing elements, Santa Cruz City and County, were both adopted with large lists of new policies and programs that will fundamentally alter the development landscape of our community. Not only do both adopted documents meet their RHNA certification levels, but these additional policies are widely supported by a coalition of business, community, and environmental interests.

Aptos Village Breaks Ground

The Aptos Village Project has been in the works for over a decade, having been originally approved in 2006. However, given the length and difficulty of navigating the public approval process the project has only now just broken ground. That being said, the Business Council has been supportive of the project since it was first proposed, having written letters, attended public hearings, and solicited letters to the editor, all while hearing directly from the project developers, Business Council member Barry Swenson Builder.

Annual Report 2015

The project boasts the development of over 70 new housing units (of which 10 will be made available to those earning below the regional median income), a new town green, and an anchor grocery/retail store, all built along the main transit corridor of Soquel Avenue in Aptos. The Aptos Village Project is exactly the type of development project that the Business Council should be supporting because it is a mixed use infill project that would revitalize an under-utilized commercial corridor, built primarily for the purposes of providing for workforce housing.

Broadband Initiatives - City and County

2015 paved the way for major advances in developing broadband infrastructure throughout our region, as best embodied by the County’s award winning Broadband Master Plan, and the approval of the City of Santa Cruz’s municipal fiber network. Business Council staff and members helped to champion both of these projects through open and direct advocacy, having attended public meetings, and written letters in support of both initiatives.

As part of their planning process the County approved a 91 mile fiber optic line development project that would extend fiber access from Santa Cruz to Soledad, building the essential fiber backbone required for future internet projects. The plan proved to be so successful that it was awarded a national achievement award by the National Association of Counties, for being an “innovative and effective county government program that enhance services for all residents.”

The City of Santa Cruz approved a private/public partnership with Cruzio Internet, a Business Council Board Member, to build out a municipal fiber network that would connect to every single household in Santa Cruz. Given the terms of the deal, this new network could potentially provide every household with the option of having 1 Gigabit per second download speeds at a price comparable to existing cable broadband services currently offering speeds 20x less than a potential fiber network. This partnership represents a unique blend of private sector “know-how” with government’s ability to borrow and regulate, that may prove to be a model for the rest of the Country.

Annual Report 2015

MAJOR LEGISLATIVE ACHIEVEMENTSAffordable Housing Program Amendments

Starting in late July 2014, the County performed a nexus analysis on the potential for new impact fees, largely in response to multiple statewide court rulings. After multiple rounds of public hearings at the Board level, Planning Commission and Housing Advisory Commission, the Board adopted a “developers choice” model to funding affordable housing, allowing for the payment of impact fees as an alternative to building on-site inclusionary units.

SCCBC staff successfully lobbied the County to preserve this elective model, resulting in substantially more flexibility, that will also be used to fund affordable housing in the post-redevelopment era. SCCBC also successfully lobbied for a tiered fee structure for smaller unit projects that rewards smaller, denser development, while not overly burdening single family homeowners. Taken together, these updated policies constitute the most significant changes in the County’s relationship with and approach to housing development in the past 40 years, and the Business Council played a pivotal role in realizing these changes.

OUR GUEST SPEAKERS

SCCRTC Executive Director George Dondero

As part of the Business Council’s ongoing involvement in the transportation sales tax measure George Dondero visited with our members and Board on multiple occasions last year to speak about the expenditure plan that was eventually adopted in December.

Supervisor Ryan Coonerty

3rd District Supervisor Ryan Coonerty and Susie O’Hara of the County’s Downtown Accountability Program met with the Council in March to discuss public safety and review the program.

Annual Report 2015

Supervisor Bruce McPherson

Supervisor Bruce McPherson and his Chief of Staff Gine Johnson met with our Board in January to talk about the potential implementation of Community Choice Aggregation, and discuss other issues affecting the County.

County Auditor-Controller Mary Jo Walker

In July the Council met with County Auditor-Controller Mary Jo Walker to discuss public pensions and other aspects of the County’s financial and tax system.

Bike Santa Cruz County Executive Director Amelia Conlen

Amelia Conlen of Bike Santa Cruz County was a featured guest during a joint meeting of the Infrastructure and Transportation, and Government Affairs Committees. She discussed her organizations position and role in advocating for the transportation sales tax measure.

Metro Chief Executive Officer Alex Clifford

Alex Clifford, Chief Executive Officer of the Santa Cruz Metro, met with our Board of Directors in December to provide insight into the financial state of Metro, and discuss their position in relation to the transportation measure.

Annual Report 2015

Santa Cruz Mayor Don Lane

Then Mayor Don Lane visited with the Council in November to discuss the recently passed WSAC recommendation, and the likely political repercussions of the agreement.

Santa Cruz Vice Mayor Cynthia Mathews

Now Mayor, Cynthia Mathews attended the joint committee session with then Mayor Lane. Having also been one of the founders of the Sustainable Water Coalition she provided an informed and thoughtful perspective on the WSAC recommendation.

Deputy Water Director/Engineering Manager Heidi Luckenbach

Santa Cruz Water Department Engineering Manager Heidi Luckenbach discussed the state of the current drought and briefed the Council about the WSAC agreement with then Mayor Lane and Vice Mayor Mathews in November.

WSAC Member and Desal Alternatives Founder Rick Longinotti

Rick Longinotti, co-founder of Desal Alternatives and City of Santa Cruz WSAC member visited with Council in April. He outlined his vision for addressing the prolonged drought, and had a robust discussion with our members.

Annual Report 2015

Gilroy City Council member Peter Leroe-Munoz

Peter Leroe-Munoz, a member of the Gilroy City Council, visited with our Board in October to talk about his candidacy for State Assembly District 30, which covers Watsonville in south Santa Cruz County, as well as Gilroy and Salinas. His background is that of an Attorney with a focus on Public Safety.

Open Space District Project Coordinator Fred Keeley

Fred Keeley was chosen by the County CAO to lead the effort to explore the potential for creating a County-wide Open Space District. He spoke about this issue, as well as his prior experience in the State Assembly with our Board in May.

FM3 Principal, and Pollster David Metz

David Metz, Principal of Fairbank, Maslin, Metz, and Associates met with the Council in August to present his findings from a public opinion poll of Santa Cruz County residents on transportation. The poll was funded in part through contributions from the Business Council and our members.

Annual Report 2015

SPECIAL PROJECTS

Monterey Bay Internships - New Website

During a workshop in November of 2014, Business Council staff met with representatives of Cabrillo College, their staff, faculty, and students to discuss how we could better align the educational goals of the institution with our local workforce development needs. The near unanimous recommendation that came out of that meeting was a desire to centralize the internship placement process for the entire region, so that students could get the applied knowledge they needed and local employers could benefit from the direct recruiting of qualified and interested local college students.

Fast forward to 2016 and Business Council staff have been hard at work building a new centralized website that will be utilized by employers and students alike throughout the entire Monterey Bay Region. The new website, mbinterns.org, leverages a strategic partnership between the Business Council, UCSC, Cabrillo College, the Community Foundation of Santa Cruz County, and the Monterey Bay Economic Partnership to create a one stop shop for local employers looking to recruit local college students for interns. After nearly 5 months in development, the site is now live, and fully functioning, and will undoubtably improve the experience of those in the local business community.

Local employers are encouraged to post all of their available internship positions on mbinterns.org, which is currently being marketed to schools all over the Monterey Bay Region.

Annual Report 2015

A TRANSITION IN LEADERSHIP

Casey Beyer Becomes Executive Director

In July, the Santa Cruz County Business Council hired senior Silicon Valley executive and long time political operative Casey Beyer as the new Executive Director. Mr. Beyer, who had previously served in leadership positions under numerous elected officials and private companies for over 30 years, joined the Business Council on the heels of one of the most successful advocacy years on record for the organization, after former Executive Director Joe Foster left last December, leaving Gary Merrill to serve as the interim Executive Director during the transition period.

From left to right, Joe Foster, Gary Merrill, and Casey Beyer

SPECIAL EVENTSGoBIZ/Covered California Event

In June of 2015 the Business Council partnered with the Santa Cruz Area Chamber of Commerce and the offices of State Senator Bill Monning and Mark Stone to host an educational forum on the new State GoBIZ Tax Credit Program and Small Business Health Insurance Coverage with staff from Covered California.

Community Leadership Visit

In August 2015, the Business Council sent staff to attend the annual Community Leadership Visit, hosted by the Santa Cruz Area Chamber of Commerce. The 2015 trip visited Seattle and Victoria Canada and covered such pertinent topics as Housing Development, Technology Transfer for Universities, Tourism, Transportation, and Startup Accelerator Programs.

Annual Report 2015

Comerica Bank: The State of the Economy Luncheon

Comerica Bank and the Santa Cruz County Business Council partnering with the Community Foundation of Santa Cruz County to present Chief Economist and Comerica Vice President Robert Dye, who provided an overview of current economic conditions, both locally and nationally.

MBEP: State of Region Conference

In November many Business Council members attended the Monterey Bay Economic Partnership State of the Region Conference, which featured keynote speaker California Lieutenant Governor Gavin Newsom. The conference also featured informative panel discussions and speaker series on Housing, Public Safety, Employee Retention and Training, and Environmental Conservation. Business Council Executive Director Casey Beyer was chosen as the moderator for the panel on Housing.

Lieutenant Governor Gavin Newsom addresses the audience during the State of the Region Conference

Annual Report 2015

STAY INVOLVED

As always, feel free to reach out to staff if you have an issue you think we should look into, or even if you just want to become more engaged. We welcome members to serve on one or more of our committees so please don’t hesitate to ask. You can also stay updated by visiting our website http://sccbusinesscouncil.com/, or by following us on social media.

You can send general inquiries to staff by emailing us at:

robert.singleton@sccbusinesscouncil.com casey.beyer@sccbusinesscouncil.com

AUTHOR’S NOTE

After now having served in the role of Policy Analyst for the Business Council for two years, I am very proud to say that our work has without a doubt directly contributed to the preservation and promotion of local economic vitality. Our organization has been instrumental in defining the collective voice of the business community on the most important issues facing our County. Our role in advocating for a supplemental water supply can be felt in the adoption of the WSAC agreement. We have led in the development of a broad coalition of diverse interests in moving forward with the passage of a transportation ballot measure. And our investment of both time and funds has helped to bring about a real solution to a core workforce development need, in that mbinterns.org will directly aid in the placing of college interns with local businesses.

These accomplishments demonstrate the true value of the Business Council to our community. 2015 was a very productive year, but we are very much looking forward to the work ahead in 2016.

Sincerely,Robert SingletonPolicy Analyst

Annual Report 2015

AT&T! ! ! ! Hutchinson & Bloodgood LLP! ! !

Barry Swenson Builder! ! Lighthouse Bank! ! ! ! Santa Cruz Sentinel

Bay Federal Credit Union! PG&E! ! ! Shadowbrook Restaurant/The Crow’s Nest

Berger Lewis Accountancy ! Pajaro Dunes Company!! ! ! Slatter Construction

Cruzio Internet !! ! Palo Alto Medical Foundation/Sutter Health! South Swell Ventures

Dominican Hospital ! ! Physicians Medical Group of Santa Cruz County UCSC

First Alarm & Patrol! ! Plantronics! ! ! ! Watsonville Coast Produce

Graniterock! ! ! Santa Cruz County Association of Realtors! Wells Fargo

Grunsky Law Firm ! ! Santa Cruz County Bank! ! Watsonville Community Hospital

Santa Cruz County Business CouncilBoard of Directors and Member Companies

2015 Board of Directors

New Members