Gilroy Chamber Business Focus May 2022

May 30, 2022

Mayor Marie Blankley: State of the City 2022

By: MARIE BLANKLEY

Gilroy Dispatch Editor’s note: The following is an excerpt from Mayor Marie Blankley’s State of the City address. She will deliver the full talk in person on June 4 at 9:30am in the Gilroy City Council Chambers.

It is my pleasure to bring to you Gilroy’s 2022 State of the City address.

As you may know, I’m a lifelong Gilroy resident (since 1964), a Certified Public Accountant (CPA) of over 30 years, and parent of two adult children with my husband, Steve, all of whom are engineers. This is my fifth year on the Gilroy City Council, and my second as mayor. I’m honored to follow in Roberta Hughan’s footsteps as the second woman to be elected mayor of Gilroy in 150 years.

Our struggles are ever-present, and this past year was no exception, but we’ve also made some very positive strides and have much to look forward to.

  • San Jose Sharks: We look forward to bringing a two-rink ice facility to the Gilroy Sports Park operated by Sharks Ice. As a city, we’ve done our part to this point. We hope to have a deal approved this year for which the Sharks anticipate an 18- to 24-month construction timeline to begin in early 2023.
  • Recreation opportunities for the acreage surrounding Gilroy Gardens are finally a go to explore. We’ve received clearance from the Surplus Lands Act, giving us the green light to move forward with recreation development possibilities.
  • Always the subject of something to improve upon, Gilroy’s downtown alleys will soon see significant changes thanks to a $3.9 million Clean California Local Grant from CalTrans. This money will make substantial capital improvements such as storm drains, lighting, pavement, and trash enclosures from Lewis Street to Seventh Street in the alley on the east side of the Monterey Street buildings, and also to the well-known Gourmet Alley from Fourth Street to Seventh Street. While PG&E may not be ready to place existing utility lines underground, conduit will now exist below the pavement to accommodate underground wires. These areas will be more bicycle and pedestrian friendly and will be closed to vehicular traffic (but for emergency and trash collection), welcoming pedestrian access and business/restaurant use of outdoor spaces in the alleys.
  • We have applied for a $19.5 million federal grant to build a long-awaited bridge connecting the west end of 10th Street to Santa Teresa Boulevard to provide direct access to the growing population in the city’s southwest quadrant. The infamous 10th Street Bridge may actually become a reality with this grant that would cover 80% of the cost, and require the City to meet the remaining 20%.
  • Equally exciting are two Letters of Support dated April 11, 2022 to Congressman Panetta from the Mobility Partnership of VTA and the Council of San Benito County Governments where we, southern Santa Clara County and northern San Benito County, jointly request funding for the design phase of Phase 2 improvements to the 101/25 interchange, and a $2 million request to begin initial work on that badly needed fourth lane on 101 south of Cochrane to continue the US 101 Silicon Valley Express Lanes Program through Gilroy. This would mean widening 101 in the median and installing express lanes electronic toll systems infrastructure to match what exists north of Morgan Hill through San Mateo County. $2 million is just a start, but it begins the process.
  • As to housing itself, the nearly $1 billion in funding provided by the voters of Santa Clara County in 2016, known as Measure A, to address housing insecurities is being quickly consumed throughout the county. Gilroy has only one Measure A-funded housing development, the Gateway Apartments on Monterey Road built in 2018, comprised of 75 apartment units, 37 of which qualify as very low- income housing and 38 low-income. Santa Clara County owns a vacant parcel near the Gilroy Transit Center, and we’ve asked their Office of Supportive Housing to designate Measure A funding to build housing for our more marginalized population that we hope to secure before all of Measure A funds have been spoken for.
  • The Gilroy City Council approved an additional $2 million in funding to improve our own city streets as part of a 5-year plan to stop the decline of pavement condition throughout the city. 

Marie Blankley, CPA is the mayor of Gilroy.

Employers Beware: Take-Home COVID Cases are on the Rise (US)

Article by National Law Review

You’ve just been informed that an employee who apparently contracted COVID-19 from exposure in your workplace brought the virus home, and now his spouse, who is in a high-risk category, has contracted the virus and is in the hospital.  Do you as the employer face potential liability for the spouse’s illness?

More than two dozen so-called “take-home” COVID-19 lawsuits have been filed across the country, including against some of the largest employers in the US. This alarming pattern has prompted trade groups to warn employers of the potential for lawsuits stemming from COVID infections filed not only by workers’ family and friends but by anyone infected by that circle of people, creating a seemingly endless chain of liability for employers. Some states have enacted laws shielding employers from such suits, but where that is not the case, the legal theories and procedural paths under which these suits have proceeded vary – including some being brought in state courts, some in federal courts, and others brought under claims within the worker’s compensation system. 

The issue is currently being tested in California, where the US Court of Appeals for the Ninth Circuit recently certified questions to the California Supreme Court seeking guidance on the state’s laws. The case, Kuciemba v. Victory Woodworks, Inc., arose after Mr. Kuciemba allegedly was exposed to COVID-19 through his work at one of his employer’s job sites.  According to the Kuciembas, Victory knowingly transferred workers from an infected construction site to the job site where Mr. Kuciemba was assigned without following the safety procedures required by the San Francisco Health Order. He was forced to work in close contact with these employees, and soon developed COVID-19, which he brought back home. His wife is over 65 years old and was at high risk from COVID-19, and the family had been careful to limit their exposure to the virus, with the exception of Mr. Kuciemba going to work. Mrs. Kuciemba subsequently tested positive for the disease and was hospitalized for over a month after developing severe symptoms. The Kuciembas filed suit, alleging that Victory caused Mrs. Kuciemba’s injuries by violating the Health Orders, and negligently allowed COVID-19 to spread from its worksite into their household. 

The lower court dismissed the case, which was then appealed to the federal appeals court. After hearing the argument, the court asked the California Supreme Court to answer two questions of state law. First, whether Mrs. Kuciemba’s illness was an “injury” that was “derivative” of Mr. Kuciemba’s work-related injury, and therefore, Mrs. Kuciemba’s claims would be subject to the exclusive jurisdiction of the Worker’s Compensation Act (“WCA”); and second, assuming that the WCA is not the exclusive remedy, whether the employer owed a duty to the households of its employees to exercise ordinary care to prevent the spread of COVID-19. Neither question has been squarely answered by the California Supreme Court, although, as noted by the federal appeals court, in a somewhat analogous situation, California courts have allowed suits against employers who negligently allowed their employees to carry asbestos fibers home to their families.   

While the Kuciemba case was pending, a California Court of Appeal in another case, See’s Candies v. Superior Court, ruled that the derivative injury doctrine does not bar third-party COVID-related claims. Under a similar fact pattern, the court allowed the negligence case to go forward while noting that the plaintiff would still need to prove that the employer owed a duty of care to non-employees infected with COVID-19 due to an employee contracting the virus at work. Acknowledging that an analysis of this duty “appear[s] worthy of exploration,” the state appellate court said the analysis would include an assessment of “public policy concerns that might support excluding certain kinds of plaintiffs or injuries from relief.” The California Supreme Court declined to review the See’s case, meaning that it’s holding still stands. 

The California Supreme Court has not yet announced whether it will use its discretion to respond to the Ninth Circuit’s certified questions in the Kuciembas’ case. In the meantime, California employers cannot automatically rely on the exclusive remedial scheme provided under the worker’s compensation system to cover these claims and are not necessarily shielded from COVID-19 lawsuits brought by employees’ family members (and perhaps others). That said, even if employers owe their employees’ families a duty of care, affected employees will still have to prove that it was the employer’s negligence that caused the illness and that the virus was not contracted from another source – a tall order for a highly transmissible virus like COVID-19. In the meantime, however, it behooves all California employers to continue maintaining health and safety measures to prevent the spread of COVID-19, and react quickly and appropriately in the event of an outbreak of COVID-19 in the workplace.

Job Killer Bills Stopped

Article by CalChamber 

The Gilroy Chamber of Commerce, CalChamber, and other business organizations have been able to stop the following job killer proposals which will no longer advance this year:

  • AB 2095 (Kalra; D-San Jose)would have placed new onerous administrative burdens on employers by requiring annual reporting of wage and hour data and employee benefits on an employer’s entire United States workforce that will unfairly criticize employers for lawful conduct by publishing that data on the Labor and Workforce Development Agency’s website and using such data to rank employers and deny them state opportunities, and would have subjected employers to frivolous litigation and settlement demands.
  • AB 2182 (Wicks; D-Oakland) would have imposed new burdens on employers to accommodate any employee with  family responsibilities, which essentially would have included a new, uncapped protected leave for employees to request time off and exposed employers to costly litigation under the Fair Employment and Housing Act by asserting that any adverse employment action was in relation to the employee’s family responsibilities, rather than a violation of employment policies.
Mattress and Box Springs No-Cost Recycling Event on June 4, 2022

There will be a no-cost mattress and box spring recycling event held in Gilroy on Saturday, June 4, 2022, at Gilroy City Hall located at 7351 Rosanna Ave. from 9:00 AM to 2:00 PM hosted by the Mattress Recycling Council.

Each resident can bring up to 4 mattresses, box springs, or futons for recycling at no-cost. No proof of residency is needed and there will be a crew on-site to assist.

This event is for mattresses ONLY. To recycle or dispose of other bulky items, residents should contact the San Martin Transfer Station located at 14070 Llagas Avenue, San Martin. Items recycled or disposed of at the San Martin Transfer Station may require a fee.

For more information about Mattress Recycling visit: https://mattressrecyclingcouncil.org/.

The State Cuts Grass Watering

Article by Kathleen Ronayne, Associated Press

Grass in office parks, on college campuses or in some California neighborhoods will go brown this summer after state water officials adopted a ban May 24 on watering certain green spaces as the state’s drought drags on.

The ban adopted by the State Water Resources Control Board follows Gov. Gavin Newsom’s plea for Californians to use less water or face broad, mandatory restrictions on water use. The board also voted to require local water districts to adopt stricter conservation measures, though they are locally designed to meet different community needs. Many of those rules place further limits on how often people can water their yards.

“The governor made very clear that there is a sense of urgency here,” said E. Joaquin Esquivel, chairman of the water board.

California is in its third year of an acute drought, part of a two-decade megadrought facing the U.S. West that scientists say is the worst in 1,200 years. Hotter temperatures are also exacerbating the state’s water challenges as people have started to water their lawns earlier than normal. This January through March marked California’s driest winter in at least a century.

Starting June 10, watering some grass outside businesses, industrial facilities and institutions like colleges, hospitals and government facilities, as well as spaces managed by homeowners’ associations, won’t be allowed.

Grass that can’t be watered includes anything that’s used for decoration and not for regular activities or events. The ban doesn’t apply to parks, sports fields, people’s lawns, or to watering trees. It would apply to grass managed by homeowners’ associations but not individual residents. Violators can be fined $500 per day.

Beyond those restrictions, about 400 local water districts that supply California cities and towns must step up conservation actions, the board voted. Each district follows conservation requirements based on local plans created after the last drought. Many further limit how often people can water their lawns and aim to boost public messaging about the value of conservation.

Officials from numerous water agencies urged the board not to force them all into further restrictions and instead give them more discretion based on their local supply conditions. Stacy Taylor, water policy manager at Mesa Water District in Orange County, said many local districts have already achieved major water savings and boosted supplies through investments in water storage, recycling and other measures.

“We have no shortage because we have done what the state has asked,” she said.

The board approved a carveout for a small number of water districts, including Santa Cruz, a coastal city of about 65,000 people where water use is already very low, at about 45 gallons per person per day, said Rosemary Menard, the district’s water director. A 10-minute shower uses roughly 20 gallons.

Santa Cruz is not as hot or dry as many parts of inland California and the city doesn’t get any water from state supplies. The next step in the district’s local plan is water rationing, which Menard said isn’t necessary.

Under the carveout, districts that don’t rely on state or federal supplies or the Colorado River, have a low average per capita water use and don’t rely heavily on depleted groundwater supplies will face a different set of rules. Only about 10 districts are expected to be able to meet that criteria, said Max Gomberg, water conservation and climate change manager.

Rather than going to the next step of their local plans, they’ll be required to limit outdoor watering with potable water to two days per week and only during certain hours. They must initiate public outreach campaigns about conservation.

May 23, 2022

Small Business Relief Grant Program Informational Meeting May 25, 2022

One-time Business Relief Grants are available for qualifying businesses within Gilroy city limits.

Grants are based on the number of full-time employees with awards ranging from $5,000 – $10,000. Applications are due by June 10, 2022 and are available on the City’s website.

To learn more about the program and answer any questions you may have about applying, a virtual meeting is scheduled for May 25, 2022. Spanish translation will be provided.

What: Small Business Relief Grant Program Informational Meeting

When: May 25, 2022 at 6:00 PM

Zoom Link: bit.ly/SmallBusinessGrant2022

Additionally, in-person support with the application process will be available on June 3, 2022 from 9 AM – 6 PM. More information will be provided as it becomes available.For more information about the Small Business Relief Grant Program visit www.cityofgilroy.org/843/Small-Business-Relief-Program or email Relief.Program@cityofgilroy.org.

Conversation and Coffee with Mayor Marie Blankley: State of the City

The community is invited to join Mayor Marie Blankley for the State of the City presentation over coffee and donuts on Saturday, June 4, 2022, at 9:30 AM in Council Chambers located at 7351 Rosanna Street. All are welcome to attend.

To request Spanish language interpretation services for this meeting, please contact communications@cityofgilroy.org a minimum of 72 hours prior to the meeting.

To read a written report on the State of the City prior to the meeting, read the May Spotlight with the Mayor. https://conta.cc/3Mm8NZ7

Conversation and Coffee | State of the City

Date: June 4, 2022  

Time: 9:30 AM

Location: Council Chambers at Gilroy City Hall located at 7351 Rosanna Avenue

Gavilan Joint Governing Board Selects New Superintendent/President

GILROY, CA – The Gavilan Joint Community College District Governing Board interviewed
finalists for the Superintendent/President position on Thursday, May 19, 2022, and today is
announcing their decision to begin contract negotiations with Dr. Pedro Avila to become the
next Superintendent/President for the District. Dr. Avila is currently the Vice President, Student
Services/Assistant Superintendent for Santa Rosa Junior College. The Governing Board plans to
place the employment agreement on the agenda for public review and approval consideration
at their regular meeting scheduled for June 14, 2022. 

The previous day, on Wednesday, May 18, President/Superintendent Finalists Open Community
Forums took place in-person at the Gilroy campus and streamlined virtually. The community
offered feedback on all three finalists via digital anonymous forms until 10 pm, May 18. The
next day, May 19, the Board met in closed session, they reviewed all submitted comments on
the finalists from the forum feedback forms, conducted final interviews of each of the three
finalists, and deliberated in the selection of the next Superintendent/President for the college. 

Edwin Diaz, Gavilan Governing Board President shared:   

“From the beginning our Governing Board has been committed to providing continuity
leadership for the college. It was a very tight timeline for the President/Superintendent Search
Committee to produce 3 finalists, and for our Human Resources Department to organize the
Open Community Forums. On behalf of the Board, I want to thank all our community members,
faculty and staff, for their engagement by submitting their questions and feedback. We are
excited to select Dr. Pedro Avila.” 

For all media inquiries and more information email: rzepeda@gavilan.edu  

About Gavilan College: Gavilan College is one of 113 California Community Colleges, a part of the largest system of higher
education in the world. At Gavilan College you can prepare to transfer to a university, get training in a
skilled career, build your academic skills, or attain needed classes for career advancement. As
a small community college, Gavilan offers a more community-oriented and personalized experience
than you might find at a larger school, with high educational quality and access to
technology.  www.gavilan.edu.

Mattress and Box Springs No-Cost Recycling Event on June 4, 2022

There will be a no-cost mattress and box spring recycling event held in Gilroy on Saturday, June 4, 2022, at Gilroy City Hall located at 7351 Rosanna Ave. from 9:00 AM to 2:00 PM hosted by the Mattress Recycling Council.

Each resident can bring up to 4 mattresses, box springs, or futons for recycling at no-cost. No proof of residency is needed and there will be a crew on-site to assist.

This event is for mattresses ONLY. To recycle or dispose of other bulky items, residents should contact the San Martin Transfer Station located at 14070 Llagas Avenue, San Martin. Items recycled or disposed of at the San Martin Transfer Station may require a fee.

For more information about Mattress Recycling visit: https://mattressrecyclingcouncil.org/.

California Energy Commission Grant Funding Opportunity for CA Manufacturers

The California Energy Commission recently released a new grant solicitation offering financial assistance to help clean energy entrepreneurs successfully advance their emerging best-of-class innovative technology to the Low-Rate Initial Production (LRIP) stage. The Phase 1 submission deadline for eligible companies is July 28, 2022.

Click here to learn more. 

May 16, 2022

Proud Members of the Gilroy Chamber of Commerce

Member Renewals 

The Gilroy Chamber of Commerce appreciates the support of our members. Investment dollars are dedicated to vital programs such as economic development, business marketing, leadership programs and more. We applaud each of you for helping make Gilroy a better place to live and work.

30 Years & over

Mini Storage of Gilroy

Morgan Hill Cellars/Pedrizzetti Winery

Olam International

Rebekah Children’s Services

20 Years & over

Calpine Gilroy Cogen & Energy Center

Creative Labels, Inc.

Cresco Equipment Rentals

Eagle Ridge Realty

KSBW-TV 8

South Valley Internet

10 Years & over

Compass, Lisa Stringfellow (Fleming)

Garlic City Café

Gilroy Sunrise Rotary

Pinnacle Bank

Lowell O. Tan, DDS, Inc.

5 Years and over

Culligan Water of Santa Clara

Edward Boss Prado Foundation/Cecelia’s Closet

Tokita Seed America

Gilroy Chamber Opposes Job Killer Bill

The Gilroy Chamber of Commerce, California Chamber of Commerce and other organizations oppose AB 2182 (Wicks) which has been labeled as a JOB KILLER. AB 2182 imposes a burdensome new accommodation requirement on small businesses to provide employees with time off any time school or a care center is unavailable. 

The Fair Employment and Housing Act (FEHA) applies to private and public employers with five or more employees and includes a costly private right of action, exposing small employers to costly litigation. AB 2182 also creates a new protected class under FEHA: people with “family responsibilities”. That term is broadly defined to include anyone with a child under 18 or anyone who provides care to someone in their family or household, including a non-family member. 

This creates an automatic basis for an individual in that new classification to challenge any adverse employment action. It is estimated that nearly 16,000 jobs would be lost because of the burdensome new requirements included in AB 2182.

What's New with Business

New Report from Health Net Outlines Recommendations to Increase Access to Care & Drive More Equitable Health Outcomes within Medi-Cal

A new report from Health Net compiles lessons learned and recommendations to increase access to care and reduce health disparities for the state’s most vulnerable residents. Informed by their investments in innovative programs and collaboration with partners across the state, the report identifies some of the more persistent barriers faced by Medi-Cal patients and offers key findings to boost access to quality care and drive health equity. 

Snapshot – Key Findings to Boost Access to Quality Care & Drive Health Equity 

  • Invest in data & leverage insights to ground interventions in human connection
  • Solutions shouldn’t be complex – simplicity is key
  • Meet patients where they are by identifying channels they trust

Together with CalAIM, Health Net’s innovations work within Medi-Cal to develop solutions to overcome barriers to care. As we collectively build on proven programs and deliver new innovations while implementing CalAIM, patients will continue to experience better, more coordinated and equitable care.

View the full set of recommendations from the report link on Bridging the Divide.

Community Emergency Response Team Training Opportunity

Register for the upcoming Community Emergency Response Team (CERT) course offered by Gilroy’s Office of Emergency Services (OES) in partnership with Morgan Hill’s OES.

This course is a combination of online training with one-day in-person training covering essential disaster preparedness information, including hazards in our area and basic disaster response skills, such as fire safety, light search and rescue, team organization and communications, damage assessment, disaster psychology, and disaster medical operations.

To view the detailed schedule and register for this free opportunity, please follow the link to Eventbrite.For additional information, please contact Andrew Young at Andrew.Young@cityofgilroy.org. Additional course offerings can be viewed on the City of Gilroy Website.

Gavilan College Announces Superintendent/President Finalists and Forums

GILROY, CA – Following a national search, the candidates below have been selected as finalists
for the position of Superintendent/President at Gavilan JCCD. The finalists will participate in
open forums at the Gavilan College campus, room Social Sciences 214 (SS 214) on Wednesday,
May 18, 2022, according to the following schedule. Parking is free on campus.

Dr. Pedro Avila – Forum 1:15 – 2:15 pm
Vice President of Student Services/Assistant Superintendent
Santa Rosa Junior College
Dr. Claudia Lourido-Habib – Forum 2:30 – 3:30 pm
President Porterville College
Dr. Brian Sanders – Forum 3:45 – 4:45 pm
Vice President of Instruction Columbia College
Face coverings are required to attend the open forums. A recording of the open forums will be
available for public viewing following the forums (see links by candidate information).
Visit this page to read the bios of each of the finalists and to submit questions for the forums by
the May 13 deadline: https://www.gavilan.edu/about/president/search/index.php

Gavilan’s outgoing Superintendent/President, Dr. Kathleen Rose commented:
“As my retirement date approaches, I want to thank the search committee and our Human
Resources Department for working under a very tight timeline to do a national search, conduct
many interviews, and produce three finalists. The forums are a fantastic opportunity for our
community to participate in this especially important process of selecting your next
Superintendent/President.”

About Gavilan College
Gavilan College is one of 113 California Community Colleges, a part of the largest system of
higher education in the world. At Gavilan College you can prepare to transfer to a university,
get training in a skilled career, build your academic skills, or attain needed classes for career
advancement. As a small community college, Gavilan offers a more community-oriented and
personalized experience than you might find at a larger school, with high educational quality
and access to technology. https://www.gavilan.edu.

Bad Legislation Leads to Job Losses

Economic Impact Study Estimates Job Losses

By Ashley Hoffman, CalChamber

Economic growth and job creation are essential to California’s success. Every year, the California Chamber of Commerce identifies the legislation that will hinder job creation, tagging those bills as “job killers.”

Encina Advisors, an economics firm, analyzed several of this years’ job killer bills to determine just how many jobs would be lost statewide because of those bills:

  • AB 2932 (Low; D-Campbell): This bill would have required employers with 500 or more employees to pay workers overtime after just 32 hours of work and would have required the workers’ overall compensation to not change, thereby increasing the hourly rate of pay. It would have placed business in a vise between trying to find workers to cover operations after the fourth day during the “Great Resignation” and sustaining a significant, across-the-board pay increase. The bill was not set for hearing and will not be moving forward.

Estimated Job Loss: Between 340,600–1.02 million jobs

  • AB 2182 (Wicks; D-Oakland): AB 2182 significantly expands the Fair Employment and Housing Act (FEHA) by creating a new protected class, those with “family responsibilities.” This includes anyone with a child under 18 or who cares for someone else (which is not limited to family members). It would require private and public employers to accommodate any unforeseen care obligation, regardless of the fact that leaves already exist for those exact situations. The economic analysis looked at the number of jobs that would be lost based on the spike in absenteeism and lost productivity. Notably, it did not include the effects of increased costs in litigation under FEHA. AB 2182 was placed on the Assembly Appropriations Committee Suspense File on May 11 pending a review of its fiscal impacts to the state.

Estimated Job Loss: Approximately 15,900 jobs

  • SB 1162 (Limón; D-Goleta): While this bill has multiple parts that will lead to increased litigation and increased administrative costs, the economic analysis focused on Section 1 of the bill. That section undermines SB 973 (Jackson; D-Santa Barbara) from 2020 by publicly releasing the pay data reports SB 973 had committed to keeping in the purview of the Department of Fair Employment and Housing, exposing businesses to litigation. Indeed, several years ago, a plaintiff’s attorney said he would use similar data to “hammer companies” with lawsuits. By encouraging litigation, SB 1162 would require companies to divert revenue from operations to litigation costs. It is also important to note that SB 1162 will spur future troublesome legislation, like SB 1458, that would use this data to further increase costs on businesses, which is not captured in this job loss estimate. SB 1162 is set to be considered by the Senate Appropriations Committee on May 16.

Estimated Job Loss: Approximately 2,100 jobs

  • SB 1044 (Durazo; D-Los Angeles): This bill would allow any worker to subjectively decide not to come to work or to leave work during a state of emergency or emergency condition. There are no exceptions for those workers who are essential in providing emergency services, like healthcare workers, or who aid emergency workers like utilities, communications, or those who provide essential public services. Similar to AB 2182, this would result in significant costs due to this absenteeism. SB 1044 is on the Senate Appropriations Suspense File pending a review of its fiscal impacts to the state.

Estimated Job Loss: Approximately 20,200 jobs

Governor, Legislators Won’t Budge in High-Speed Rail Dispute

By Ralph Vartabedian, CalMatters

California Democrats are locked in one of the most consequential disputes in modern state history over the future of the Los Angeles-to-San Francisco high-speed rail project after a decade of troubled construction.

The $105 billion bullet train project — for which $10.3 billion has been spent so far — would be the largest single investment in state history, the most ambitious civil works effort in the nation and now a symbol to many experts of how not to build a railroad, all of which define the stakes in the current impasse. 

The feud has festered for 16 months, since Gov. Gavin Newsom asked the Legislature for a $4.2 billion appropriation in early 2021. The request has triggered a standoff with Assembly Democrats, who have steadfastly refused to hand over the last remaining funds from a 2008 bond measure for high-speed rail.

The battle involves who will exert control over the project’s future, how to improve its efficiency and how the remaining funds can yield the greatest benefits, which involve sharp disagreements that could be difficult to resolve. 

“The project is not proceeding according to a robust plan, which results in waste and other inefficiencies,” said Bent Flyvbjerg, a business expert in mega projects at the University of Oxford’s Saïd Business School and IT University of Copenhagen.  “Given the political divisions, the cost growth, the schedule delays and the lack of a sound future revenue source, this project is going to the graveyard of famous boondoggles.”

Proponents of high-speed rail dispute such grave characterizations, asserting the project is solid.

“The naysayers are always going to be naysayers,” said Ray LaHood, U.S. Transportation Secretary under President Obama and a crusader for high-speed rail. “There’s construction underway. Hundreds of people are working on the project and have good paying jobs. There’s a plan now to go to Bakersfield. The future is very encouraging. It hasn’t stopped.”

A legislative standoff

But serious problems remain unresolved in the Central Valley, and new issues with utility relocations along the future tracks are again holding up construction. 

The rail authority estimated in 2008, when voters approved $9 billion for the system, it would cost $33 billion and start running by 2020. But slow land purchases, delays in environmental documents, employee turnover and litigation over the last 14 years keep putting the goal further out of reach.

“There is no confidence in the project,” said Speaker Anthony Rendon, a Los Angeles Democrat. “We had an end date of 2020 and now we don’t have an end date.” 

The latest estimate, made earlier this year, set the cost at $105 billion. The new price tag is based on some estimates made in 2019, not accounting for the spurt of inflation in construction materials and labor, according to the Legislative Analyst’s Office, the non-partisan adviser to the Legislature. The risk is that the real cost is still not known.

In his negotiations with the Legislature, Newsom has offered several billion dollars of sweeteners to the urban centers to get the $4.2 billion. So far, the Assembly has not bitten. 

Newsom’s office did not respond to a request for comment. 

Against this backdrop, Rendon and a majority of Democrats in the Assembly want to essentially detonate Newsom’s plan for the rail. 

Asked in a recent interview what he could not accept, Rendon said, “I think this strict adherence to the current project is not really what we’re interested in.”

Newsom unveiled the “current project” in 2019, when he scaled back former Gov. Jerry Brown’s plans and adopted a blueprint for an electrified 171-mile partial operating system between Bakersfield and Merced. It would cost $23 billion, leaving the state with $2 billion to cover any setbacks, according to the 2022 business plan unveiled earlier this year. 

“This project is big and complex and complicated and difficult and needs oversight,” said Laura Friedman, a Glendale Democrat and  chair of the Assembly Transportation Committee. “It seems like there’s pressure being put on us to very quickly give them their money and just move on. ‘Legislature, get out of our way,’ which to me is really, really committing legislative malfeasance.”

The Senate has maintained its long silence on the rail project. Senate Transportation Committee chair Lena Gonzalez, a Democrat from Long Beach, declined an interview request and to answer written questions. In a statement, she said she is working on a “robust transportation funding package.” 

Each side in the dispute believes the ultimate success of the project to connect downtown stations in Los Angeles and San Francisco with a 220 mile per hour train — an ambition that has existed for 40 years — hinges on their approach. 

Competing California high-speed rail plans 

In an Oct. 15 letter to Newsom, Rendon and Friedman offered to provide a $1 billion appropriation for upcoming construction and another $1.5 billion for cost overruns. As part of that offer, they sought an increase for high-speed rail segments in Southern California and an improved plan to connect the Central Valley segment to the Bay Area.

No deal was reached, though negotiations between staffs from the Legislature and the governor’s office have resumed in recent weeks. The budget for the next fiscal year would be adopted by July 1 with a possible revision in August. 

In a statement, rail authority spokesperson Annie Parker noted that Newsom “proposed a $9.1 billion comprehensive transportation package” for transit and climate goals. It includes, she said, $4.9 billion for transit and other green transportation projects, as well as the $4.2 billion for the bullet train.

The bullet train, she added, “has been an economic engine.”

The rail authority’s need for the $4.2 billion immediately is not clear. The rail authority has about $1.5 billion in cash on hand, according to its financial reports, meaning it could keep the project going for at least a year. 

Helen Kerstein, who monitors high speed rail for the Legislative Analyst’s Office, said the current standoff — though not an immediate threat — is important to resolve for the long-term future of the project.

But rail authority chief executive Brian Kelly has insisted that the agency needs the money now to provide stable planning and to make orderly advanced purchases of such items as trainsets that take a long time for delivery. 

The views of Assembly Democrats, a majority of whom voted for a resolution last year that backed a recalibration of the program, rankles many supporters. 

Of the urban legislators, former rail authority chairman Dan Richard said, “They will never be satisfied. I made agreements to give $470 million for Los Angeles Union Station and $700 million for electrification of Caltrain. We didn’t even get invited to speak at the dedication.” 

The Assembly plan would also delay installation of a high voltage electrical system, until the Central Valley tracks connect somewhere. In the interim, it wants the rail authority to consider a new generation of battery-operated trains, which manufacturers say could reach 170 mph and higher in coming years. Kelly disputes that the battery trains could travel fast enough to comply with legal requirements. 

A more basic question is whether the state can ever afford to make the costly connections to the coasts, involving lengthy mountain tunnels near seismic faults. Bakersfield to Los Angeles is priced at $50 billion and San Francisco to the Central Valley tie-in at Chowchilla $22 billion, according to upper end estimates in the 2022 draft business plan. 

“There is a very significant outstanding question of where that money will come from and how to proceed at this point,” said Kerstein.

Legislators are worried that the 171-mile system would remain isolated.

“The idea that you would spend all your money on a train that doesn’t connect to anything and just hope that you’re going to get more money, I find a really frightening business proposition,” said Friedman.

Federal support likely insufficient

Bullet train proponents believe that the Bi-Partisan Infrastructure Law that was signed by President Biden last year could provide new money. But there is no designated carve-out for the California project, unlike for the Acela train from Boston to Washington, D.C. California might expect no more than $5 billion, grant experts say, a helpful amount but not a game changer. 

A state-appointed peer review group raised serious concerns about the future of the project in an April letter to legislative leaders. It praised progress on environmental clearances and acknowledged the impact of COVID, but it faulted out-of-date cost estimates, lack of technical experience for upcoming contracts and legislative oversight.

“The cost and schedule experience so far does not yet support optimism about future performance,” wrote the author, Louis Thompson, the longtime chairman of the panel and a former Federal Railroad Administration executive and World Bank railroad expert. 

Thompson went on, “Despite the possibility for additional federal funding, overall project funding remains inadequate and unstable making effective management extremely difficult. In addition, the authority has no clear guidance from the Legislature on the next steps in the project.” 

 

Utility relocations derailing bullet train

Another complication is that construction in the Central Valley is bogging down, once again failing to meet a revised schedule. There are 119 miles currently under contract for roadbed and structures, which originally was supposed to be completed by 2017. 

“There is visually nothing happening in the Central Valley,” said Jeff Denham, the former chairman of the House rail subcommittee, a Republican almond farmer who voted for the project when he was in the Legislature but later became a strident critic. “Equipment has been moved out.”

Construction has significantly slowed, said three officials working or consulting on the project, who asked not to be identified because they are not authorized under state contracts to speak to the news media. They say the state’s schedule for completion of 119-miles by December 2023 is impossible and a more likely outcome would put completion anywhere from 2026 to 2030.

Parker, the rail authority spokeswoman, said it is working on construction updates and will present those to the rail board this summer. One of the three construction contracts, led by the Spanish firm Ferrovial, is expected to be “substantially complete” by the current deadline, she said. 

A central problem involves utility relocations, which are far behind schedule and delaying the start of bridges and viaducts. The rail authority’s most recent progress reports validate the executives’ concerns.

In its April progress report, the rail authority said that 57% of 1,850 utility relocation projects remain uncompleted by three teams of contractors some 10 years after construction began.

After utility owners approve designs to move wires or pipes, the rail authority has six months to start work, according to the three executives. If it goes past that window, it must start the process over, they said. For many reasons, designs often go through reapproval. 

Parker said the authority has been transparent about the overall problems, which originated from starting construction “out of sequence” with land purchases and utility relocations. She noted, “Currently, we are working through those challenges and we’re implementing procedures to prevent these issues from happening on future contracts.” She said that work has begun on some uncompleted utility relocations, leaving 28% yet to start. 

Slow land purchases have loomed over the project for a decade. The state lacks 222 parcels out of 2,291 that it needs, the report said. Only 28 of the 66 structures across four counties have been completed. 

The rate of construction spending by the teams led by Tutor Perini and Dragados are lagging far behind projections, the reports show. At current billing rates, it will take about four years to complete the remaining value of work under their contracts, according to the progress reports. It would put completion at about 2026.

Two years ago, Kelly was quoted in the news media saying construction would reach full speed by now and employ 1,700 to 2,000 craft workers. In its April report, employment was reported at 906. Parker said the estimate was made before the COVID pandemic. 

The three current contracts cover only 119 miles of the 171 miles of the route that Newsom wants to build. New contracts and land acquisition would be needed for 52 additional miles. Tracks, a complex signaling system and a high voltage electrical system would come after bridges, track bed and viaducts are largely completed. 

As a result, the rail authority is facing monumental challenges to  carry its first passengers on the Bakersfield to Merced partial operating system by Newsom’s deadline of 2030 and within the current $23 billion budget.  

“Rail is challenged regarding economic return under the best of circumstances,” said Flyvbjerg, the Oxford and Copenhagen universities expert who describes the California project as a case study of how not to build a bullet train. “So, the last thing rail projects need, in terms of economic return, is delays and cost overruns that further undermine that return.”

May 9, 2022

Gilroy Chamber Helps to Stop Job Killer Bill

The Gilroy Chamber of Commerce along with CalChamber and other business organizations have succeeded in stopping AB 2932 from advancing any further in the Legislature this year. 

AB 2932 (Low; D-Campbell) Increased Overtime Requirement. Significantly increases labor costs by imposing an overtime pay requirement after 32 hours and other requirements that are impossible to comply with, exposing employers to litigation under the Private Attorneys General Act (PAGA).

In our ongoing effort to represent the business community’s interest at all levels of government, the Gilroy Chamber of Commerce continues to monitor bills coming out of the Legislature that impact our local business community. The Chamber is committed to supporting pro-business legislation and opposing legislation that is detrimental to our local economy. 

Water Pipeline in South County?

Article by Valley Water

Santa Clara County is once again in a severe drought. This follows the historic drought from 2012 to 2016. The impacts of climate change have had a direct effect on water supplies locally and statewide. It is why conservation has truly become a California way of life.

Facing this reality, Valley Water continues to look for ways to increase the use of recycled water throughout Santa Clara County. We’re excited to soon begin construction on the South County Recycled Water Pipeline.

“This project is another way for us to save drinking water,” Valley Water Chair Pro Tem John L. Varela said. “By expanding the current recycled water pipeline we’ll be able to provide a dependable, drought-proof, and locally controlled water supply for the cities of South County, its residents, businesses and farms for generations to come.”

Working in partnership with the City of Gilroy, roughly 3.5 miles of pipeline will be added. This will enhance the current connection to the South County Recycled Water Authority wastewater treatment plant facility, allowing more farms and businesses to have access to this crucial water supply. The pipeline will reduce the dependency on groundwater to feed the distribution systems for Gilroy, Morgan Hill and San Martin. Recycled water provided to users in Santa Clara County meets or exceeds standards set by state and federal agencies for the various uses of recycled water.

Valley Water remains proactive in seeking state and federal money to help reduce the cost of projects to residents. We were successful in receiving a $5.7 million grant from the United States Bureau of Reclamation.

This severe drought won’t be the last one. Investing in water infrastructure and technology is needed to make sure we can always provide safe, clean water here in Santa Clara County. To learn more about Valley Water’s recycled and purified water projects, visit www.valleywater.org/your-water/recycled-and-purified-water.

High Speed Rail at a Snail’s Pace

Article by CalMatters

California lawmakers are locked in one of the most consequential disputes in modern state history over the future of the Los Angeles-to-San Francisco bullet train project after a decade of troubled construction, as Ralph Vartabedian puts it in this stunning story for CalMatters. The project, whose cost is now estimated at $105 billion, would be the largest single investment in state history and the most ambitious civil works effort in the nation — if it gets built.

  • Newsom wants lawmakers to hand over $4.2 billion to continue work on the train’s Central Valley segment. Assembly Democrats are not convinced.
  • Assembly Speaker Anthony Rendon, a Lakewood Democrat: “There is no confidence in the project. … We had an end date of 2020 and now we don’t have an end date.”
  • Assemblymember Laura Friedman, a Glendale Democrat and leader of the Assembly Transportation Committee: “It seems like there’s pressure being put on us to very quickly give them their money and just move on. ‘Legislature, get out of our way,’ which to me is really, really committing legislative malfeasance.”

For some perspective on just how far the project is from completion:

  • A 119-mile stretch of Central Valley construction, which was supposed to be completed by 2017, likely won’t be finished until 2026 at the earliest, despite the state’s new 2023 deadline.
  • 57% of 1,850 utility relocation projects remain uncompleted some 10 years after construction began.
  • The state lacks 222 land parcels out of 2,291 that it needs.
  • Only 28 of the 66 structures across four counties have been completed. 

 

Sacramento is a Microcosm of California’s Homeless Crisis

Opinion by Dan Walters, CalMatters

The intersection of Howe Avenue and Fair Oaks Boulevard lies in one of the Sacramento area’s most affluent neighborhoods.

High-end shopping centers, trendy restaurants and seven-figure homes abound and those who live and work in the area complained for months about an encampment of about 30 homeless people in a grassy strip of land at the intersection.

However, due to a quirk of municipal geography, those irritated by the encampment were stymied. They were in unincorporated Sacramento County but the site was just inside the City of Sacramento and owned by the city.

Under a federal court ruling (Martin vs. Boise) cities cannot prevent people from camping on public property unless they are provided with alternative housing. While county officials, especially its sheriff, supported those who wanted the encampment dismantled, city officials said their hands were tied.

Last month, the contending parties came up with a novel “solution.” The city agreed to lease the property to a newly formed “Howe/Fair Oaks Property Owners Association” for $250 month prior to an eventual sale. With that legal change of hands, city crews moved in to erase the camp.

Of course, while it ameliorated a touchy political problem it didn’t really solve anything. The camp’s displaced residents merely scattered into other bits of public property in the neighborhood.

The Howe/Fair Oaks episode encapsulated California’s homeless crisis. Polling tells us that Californians rate it as one of their major concerns and want it resolved, but while state and local governments have spent billions of dollars in recent years, squalid camps have proliferated.

Most are in larger cities such as Sacramento, but social and medical services are mostly administered by county governments and the two levels of local government often are at odds over services and costs. Darrell Steinberg, a former leader of the state Senate, became Sacramento’s mayor while promising a vigorous effort to reduce homelessness but downtown Sacramento has hundreds of people living on its sidewalks, including those surrounding city hall, and the public’s growing impatience is palpable.

Steinberg and the city council have squabbled incessantly over creating sites where the homeless could camp safely, thus meeting the Boise case’s requirement for alternatives.

Fed up with inaction, Sacramento’s business community filed a ballot measure to compel the city to do something. It would require the city to authorize emergency shelter space for 75% of Sacramento’s unsheltered people within 60 days of voter passage.

A city staff report said the measure would cost the city an additional $192 million per year, six times its current spending on homeless shelters. “Such a significant redirection of funding would drastically reduce core programs and service levels,” the report said. “It is simply not possible to maintain current programs and services while also meeting the demands of the proposed initiative.”

With the ballot measure looming, city officials hurriedly drafted a softer alternative, requiring shelter for 60% of homeless residents and 20% of them within 90 days of voter approval. With obvious reservations,

Steinberg and the council voted to place the alternative on the ballot and sponsors of the original measure agreed to drop it. “This is an open door for creating a right to shelter, a right to housing, a right to mental health care,” Steinberg said, putting a positive spin on the city’s surrender to rising impatience.

The city also asked county officials to put a similar measure before their voters, but there are relatively few homeless camps outside the city, so the county doesn’t face similar political pressure. A workable solution or just another stopgap? We’ll see.

Ella Rodriguez: Christopher High School’s Superwoman

Melanie Corona, Public Information Officer, Gilroy Unified School District

On Friday, April 29, Christopher High School senior, Ella Rodriguez, was honored as the Association of California School Administrators (ACSA) Region 8 Every Student Succeeding award winner.  

The purpose of this award is to honor students at all grade levels who have succeeded against all odds, beyond expectations or simply won the hearts of the administrators and other educators who helped them achieve their goals. 

Ella is an excellent student, a para-ambulatory All-American Athlete, and valued volunteer for The Challenged Athletes Foundation, among many other achievements.  She attended Luigi Aprea Elementary, Brownell Middle School and is a member of the Christopher High School Class of 2022.

She was born with a congenital birth defect and had her foot amputated at nine months of age at Shriners Hospital. She took her first steps with a prosthetic foot and has used many different sizes and styles of prosthetics in her 17 years.

Ella enthusiastically participates in many activities – both in and outside of school. In particular, she shines as a basketball player and track and field athlete.  Ella began playing wheelchair basketball with the Bay Area Outreach and Recreation Program (BORP) in 2014 and it has become her passion.  She has played on a co-ed team where she was the only female athlete on the roster for four years.  Ella shares her love of the game by mentoring young athletes starting out on the prep Wheelchair Basketball team on Saturdays before practice. She was the team captain for the 2021-2022 season as a senior in high school.

In addition to her achievements on the basketball court, Ella is an accomplished track and field athlete.  In 2018 and 2019, she was named a US Paralympics Track and Field High School All American and the points she earned at the State Track Meet won Christopher High the 2019 Girls Track and Field Para-Ambulatory State championship.  In the summer of 2021, Ella qualified for Team USA’s Track and Field Paralympic Trials in Minneapolis, Minnesota. There, she placed second overall for discus and second in her classification for long jump.

Giving back to her community is something else that is important to Ella.  She is an assistant coach and mentor to the Prep Wheelchair Basketball team at BORP inspiring and motivating younger, new athletes, particularly girls.  She has worked extensive hours with Challenged Athletes Foundation to grow the California State Para Track movement.  

Her love of sports continues, and she has exercised her rights for sport inclusion in addition to participating in outdoor sporting organizations such as BORP. She was nominated 2019 Shriners Hospital for Children Ambassador for Northern California at the annual Golf Tournament, and is a finalist for the 2021 REACH scholarship award from San Jose Sports Authority. 

Ella will attend the honors college at The University of Arizona this fall and play on the women’s wheelchair basketball team.  She dreams of competing at the Paralympics someday in both Wheelchair Basketball and Track & Field.

May 2, 2022

The Failure of Finger Pointing

By Mark Turner, President/CEO of the Gilroy Chamber of Commerce

Unfortunately, for the third time in as many years, the Garlic Festival, due to numerous circumstances, will not take place. The community’s largest “family reunion,” to the disappointment of everyone, is on hold. 

What’s more disappointing is the firestorm of name calling, finger pointing (especially at the City), and the intentional effort to cause dissention and disunity amongst our residents, businesses, and organizations involved with the Garlic Festival. 

The Garlic Festival has always had a way of bringing the community together. The incident that occurred at the close of the 2019 Garlic Festival brought the community together like no other time before. It’s understandable that so many people are disappointed about the fact there will be no Garlic Festival again this year, however, the one event that united this community in the past now seems to be the event that has divided it. 

There are many factors that come into play when planning such a large event, especially after what took place in 2019. It’s easy to point the finger at someone else and blame them as some have chosen to do. The problem is, the finger pointing does not solve the problem, it only makes it worse. 

We need to come together and ask some serious questions around the future of the Garlic Festival along with Gilroy’s moniker as the Garlic Capitol of the World. We need to address questions such as:

  1. What can we do to work through the obstacles?
  2. What are the non-negotiables and what are the alternatives?
  3. What does a reimagined festival look like?
  4. What possibilities exist for a new location?
  5. How can we come together to find solutions?

Not only are we better together we are better than what I’ve seen play out on social media the last several days. This community, along with business and non-profit leaders, have never failed to rise to the occasion to overcome problems, challenges, and difficulties. For all parties involved, collaboration is the key. Now is not the time to point the finger of blame but to seek solutions and a way of bringing back the pride and joy of our community.

It's California Tourism Month

May is California Tourism Month, the state of California’s official observance of tourism’s essential role in the state’s economy and identity. This year, Visit California and California’s tourism industry are recognizing the great strides the industry has made toward recovery over the past two years amid devastating business closures and job losses.

In the Central Coast region of the state (where Gilroy is located) in particular, visitor spending reached $7,369 million, providing 733,000 jobs in 2021, according to Visit California’s annual economic impact report prepared by Dean Runyan Associates. While the 2021 economic impact numbers marked a significant improvement over 2020, the Central Coast is 82% of the way to reaching the pre-pandemic success of 2019. Only one of California’s 58 counties exceeded the economic impact achieved in 2019. 

California tourism’s recovery continues on an uneven path. However, as travel normalizes and visitors return to cities and travel further abroad, the current in-state competitive dynamics promise to change.

Statewide, visitor spending reached $100.2 billion in 2021, up 46% from 2020. Employment and visitor-generated tax revenue across the state also rose in 2021. 

Still, what visitors spent in California in 2021 amounted to just 69% of the record $144.9 billion reported in 2019. Employment levels in California’s tourism industry remained only about three-fourths of the 1.2 million workers recorded in 2019. International inbound travel and business travel have also been slow to return, disproportionately hurting many of our state’s urban centers and iconic destinations.

Locally, Gilroy saw a hotel occupancy rate of 51.1% in 2021 down from the 67.6% rate in 2019. Transit Occupancy Tax (TOT) showed signs of recovery in 2021 increasing to $1,330,879 which is a 25% increase over 2020. As a rural and outdoor recreation destination, Gilroy benefitted from travelers’ desire to be outside in 2021 and welcomed a number of visitors to the area for the first time.

In preparation for the 2022 tourism season, Visit Gilroy is aggressively marketing again to encourage visitation to the community. Travelers are ready to get out and experience what Gilroy has to offer. The team at our California Welcome Center Gilroy located in the Gilroy Premium Outlets is excited to welcome visitors and we encourage all our hospitality partners to be ready for a busy tourism season. A reminder, check out the events calendar on Visitgilroy.com website for a list of what to do during your stay in Gilroy.

Road Closures Around Gilroy

Information by Gilroy Dispatch

Southbound Monterey Street Closure Expected to Start May 2

Construction crews will be working in the area of Monterey Street and Fourth Street during the first week of May as part of a project to underground internet fiber for a development project.

Monterey Street is expected to be closed to southbound traffic between Fourth Street and Lewis Street May 2-5 from 9am-5pm daily. 

Detours will be in place, and driveway access for businesses will be maintained.

Following this work, construction crews will be returning to complete a full repave of the work area to restore the roadway to its “uncut” condition. Paving work is anticipated to take place during the summer and details will be provided when they are available, according to city officials.

Highway 101 lane Closures Begin Soon

Caltrans will perform scheduled lane closures for the Highway 101 Sargent Bridge rehabilitation project in Gilroy beginning May 3.

The work will require overnight closure of one southbound lane near Tar Creek. The closure will allow crews to safely begin installing new piles, densify soil and construct new approach slabs, according to Caltrans. 

The temporary overnight lane closures are expected to take place through mid-August. The work is weather dependent.

The closures will occur Monday through Thursday from 8pm to 10am and Friday from 10pm to 8am Saturday morning. Weekend closures will be Saturday from 7pm to 9am Sunday morning, and Sunday from 8pm to 10am Monday morning.

Megadrought Threatens California Power Blackouts This Summer

By David R. Baker, Mark Chediak, and Naureen S. Malik with Bloomberg

The historic drought that’s choked off rivers and reservoirs from the Rocky Mountains to the California coast is threatening to strain power grids this summer, raising the specter of blackouts and forcing the region to rely on more fossil fuels.

Many reservoirs that should be brimming with spring snowmelt show bathtub rings of dry dirt instead, including the largest one in the U.S., Lake Mead, which fell this week to a record low. Hydropower dams feeding off those reservoirs won’t be able to pump out as much electricity as they should, if they keep operating at all. After the drought last summer shut down the hydro dam at Lake Oroville, California’s second-largest reservoir, for five months, officials warn that’s no longer a distant possibility.

“We never thought it would be realized in our lifetime,” Governor Gavin Newsom said last week during a trip to the dam, meant to remind Californians about the dangers of the drought. “It happened. And the prospects that it will happen again are very real, particularly because we had the driest January, the driest February, and driest March in California history.”

One of California’s key water districts declared an emergency this week, limiting outdoor water usage for about six million people. The state had to resort to rolling blackouts during an extreme heat wave in 2020, and eastern Washington did the same in 2021. California had recently closed several old natural gas power plants as it shifts to solar and wind power. Low hydropower was one of the reasons the state suffered from a shortage of power during the heat wave’s hot nights.

Drought and subsequent power blackouts are but one example of how extreme weather conditions are straining cities and infrastructure built for a different, more stable climate. Last year, the U.S. endured 20 weather events that caused at least $1 billion in damage apiece, including the February deep freeze in Texas that killed more than 200 people. In all, extreme weather cost the country about $148 billion in 2021, according to the National Centers for Environmental Information. In the 2010s, the average was $89 billion per year.

Less hydropower means the region’s fossil fuel power plants will burn more natural gas and coal to pick up the slack. That’s a problem for states trying to cut their greenhouse gas emissions and fight climate change. And even the increased reliance on fossil fuels has its limits. States across the West have all grown dependent on importing power from each other during times of high demand. When a strong heat wave strikes multiple states at once – blanketing, say, the coast and the southwest – supplies grow tight, and the possibility of blackouts rises.

“We’re in a difficult situation,’’ said Michael Wara, director of the Climate and Energy Policy Program at Stanford University. “If there’s not a lot of hydro to go around, and if we have regions having a heat wave together, things get trickier.”

The Pacific Northwest coast — from Portland, Oregon up to Seattle — has received roughly average amounts of rain and snow for the current water year, which began in October, according to the National Weather Service. But from Eastern Oregon south to the Mexico border and extending across the Southwest, the La Nina weather phenomenon brought another drier-than-average winter, and drought grips nearly the entire region. April snows in California’s Sierra Nevada Mountains helped some of the state’s reservoirs reach average for this time of the year, while others are far below normal.

The problem is particularly dire on the Colorado River, one of the region’s most important sources of water and energy. Lake Powell, the river reservoir which feeds the Glen Canyon hydropower dam, stands at 37% of normal capacity for this time of year. Officials from the federal government and seven states agreed to orchestrate flows into and out of the lake to ensure the dam’s generators keep running. As a result, less water will run downstream to Lake Mead, which feeds the Hoover Dam. That will cut the amount of drinking water available to residents of Arizona, California, and Nevada.

“Those two resources in particular are being threatened by the possibility of having to shut down,” said Branden Sudduth with the Western Electricity Coordinating Council, which helps oversee power grids across the region. His organization sees a “slight possibility” that the Glen Canyon Dam could shut as early as this summer or fall. If it does and a prolonged heat wave hits, blackouts could result, he said. 

Western states “have been retiring a lot of large base-load coal resources, that makes our availability of the supply of generation that much lower,” said Sudduth, WECC’s vice president of reliability planning. States “haven’t been replacing it fast enough with other types of resources, and that makes the importance of these large hydroelectric generators that much more important.”

BloombergNEF forecasts that hydropower generation in California and Oregon’s Bonneville Power Administration, together, will drop about 2% from last year, which was already a drought year. The forecast is nearly 24% lower than in 2019, the region’s last wet year. Newly added renewable power, as well as grid-scale batteries, will pick up some of the slack, particularly in California. But the region as a whole will burn perhaps 2 billion cubic feet more of natural gas each day than it would have in a normal hydro year, said Gary Cunningham, director of market research at brokerage Tradition Energy. 

Southern California is at risk of volatile gas prices and in extreme conditions, potentially brownouts, he said. That’s because gas flowing westward on the El Paso pipeline from Texas, a key source for the power-plant fuel, is restricted after a rupture last year. The Los Angeles area’s massive Aliso Canyon gas storage facility is still operating at reduced levels after a 2015 leak, although regulators have approved increased usage for this summer.

“Under worse circumstances, we could see the need for rolling brownouts and blackouts in Southern California,” Cunningham said.

And there is, of course, no sense of when the drought might end. Some scientists, studying centuries of tree-ring data, say the southwestern US is gripped in a 22-year “megadrought” that ranks as the region’s driest spell in at least 1,200 years. Occasional wet years in that two-decade stretch have brought only temporary relief. And they attribute much of the drought’s severity to climate change.

“Given the length and intensity of drought conditions in the West, there is a growing sense that low hydro availability is the ‘new normal,’” said Teri Viswanath, lead economist for power, energy and water at CoBank ACB.

Survive and Thrive After Any Disaster

The Cal OES Earthquake Program is providing NEHRP funding to the Disaster Resistant Business Toolkit to host 2 webinars, the first on May 10, 2022 and the second on May 25, 2022, to provide businesses with a toolkit to prepare for earthquakes and reduce potential earthquake impacts. This no-cost webinar provides free resources, including a new mobile tool to aid in planning business resilience.

 This webinar will coach business owners and managers on how to 

  1. reduce potential disaster losses (from earthquake to power outage) 
  2. keep the doors open when disasters strike, even during a pandemic! 
  3. prioritize operations to make better strategic decisions post-disaster 

Become a Disaster Resistant Business (DRB) by following easy, interactive, step-by-step tools to ensure your business can survive and thrive any interruptions. No experience necessary. Invite your team to plan your resilience together. 

May 10, 2022 Webinar Registration – Zoom 

May 25, 2022 Webinar Registration – Zoom

Verizon’s Small Business Digital Ready $10k Small Business Grant

Verizon Small Business Digital Ready is committed to helping small businesses grow. It’s why Small Business Majority is partnering with this program to arm businesses just like yours with the tools and resources needed to thrive in today’s digital economy. By joining this free platform, you’ll not only get access to courses, live coaching sessions, and invaluable learning materials, but can also qualify to apply for an exclusive pool of $10,000 small business grants.

To unlock the application for the current round of grant funding, register on Verizon Small Business Digital Ready, complete two courses or live coaching events, and apply by June 30, 2022.

Register today »​​​​​

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