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Home My WebLink AboutAgenda Report - June 17, 2009 B-01 SMAGENDA ITEM_I • CITY OF LODI COUNCIL COMMUNICATION TM AGENDA TITLE: Consider Adopting Resolution Authorizing the City Attorney to Cooperate with the League of California Cities, other Cities and Counties in Litigation Challenging the Constitutionality of any Seizure by State Government of the City's Street Maintenance Funds. MEETING DATE: June 17,2009 PREPARED BY City Attorney's Office RECOMMENDED ACTION: Adopt a resolution authorizing the City Attorney to cooperate with the League of California Cities, other cities and counties in litigation challenging the constitutionality of any seizure by State government of the City's street maintenance funds. BACKGROUND INFORMATION: Gas tax is now in the State Legislature's sights. The Street Fund is made up of three principle revenue sources: General Fund, Measure K and gas tax (officially Highway Users Taxes). Gas tax is a series of taxes adopted over time contained in the Streets and Highways Code. For Fiscal Year 2009110 we project $1,062,000 in gas tax revenue (this is not Proposition 42). The State may contend taking gas tax is not a loan, unlike borrowing property tax, and would not directly affect local governments' public safety budgets. The effect on street maintenance, however, would be drastic. In 2006, it was estimated that $13 billion was needed for urgent local street and road repairs. This is what convinced voters to approve infrastructure improvements in the form of Propositions 113, 1C, and 1D. Attached is a League of California Cities recommended resolution authorizing the City to cooperate with the League in challenging the transfer. In the event the City were actually to file a challenge in its own name, staff would return for further council authorization. FISCAL IMPACT: Up to $1,062,000 in lost gas tax revenue. rw%-7 Z77; vm�".a APPROVED: Y�/-) Blair King, r_ ager RESOLUTION NO. 2009-77 A RESOLUTION OF THE LODI CITY COUNCIL AUTHORIZING THE CITY ATTORNEY TO COOPERATE WITH THE LEAGUE OF CALIFORNIA CITIES AND OTHER CITIES AND COUNTIES IN LITIGATION CHALLENGINGTHE CONSTITUTIONALITY OF ANY SEIZURE BY STATE GOVERNMENT OF THE CITY'S STREET MAINTENANCE FUNDS TTTr4'P:.-rr'T: ::1%-+-a*1 ::: rrr:::: r.:::::� ::::::.::::: : :::::::::::::.: --- WHEREAS, the current economic crisis has placed cities under incredible financial pressure and caused them to make painful budget cuts, including layoffs and furloughs of city workers, decreasing maintenance and operations of public facilities, and reductions in direct services to keep spending in line with declining revenues; and WHEREAS, since the early 1990s the state government of California has seized over $10 billion of city property tax revenues statewide, now amounting to over $900 million each year, to fund the state budget even after deducting public safety program payments to cities by the state; and WHEREAS, in his proposed fiscal year 2009-10 budget, the Governor has proposed transferring $1 billion of local gas taxes and weight fees to the state general fund to balancethe state budget, and over $700 million in local gas taxes permanentlyin future years, immediatelyjeopardizing the ability of the City to maintain the City's streets, bridges, traffic signals, streetlights, sidewalks, and related traffic safety facilities for the use of the motoring public; and WHEREAS, the loss of almost all of the City's gas tax funds will seriously compromise the City's ability to perform critical traffic safety related street maintenance, including, but not limited to, drastically curtailing patching, resurfacing, street lighting/traffic signal maintenance, payment of electricity costs for street lights and signals, bridge maintenance and repair, sidewalk and curb ramp maintenance and repair, and more; and WHEREAS, some cities report to the League of California Cities that they will be forced to eliminate part or all of their street maintenance operations while others will be forced to cut back in other areas (including public safety staffing levels) to use city general funds for basic street repair and maintenance; and WHEREAS, in both Proposition 5 in 1974 and Proposition 2 in 1998 the voters of our state overwhelmingly imposed restriction on the state's ability to do what the Governor has proposed, and any effort to permanently divert the local share of the gas tax would violate the state constitution and the will of the voters; and WHEREAS, cities and counties maintain 81 % of the state road network while the state directly maintainsjust 8%; and WHEREAS, ongoing street maintenance is a significant public safety concern; and WHEREAS, according to a recent statewide needs assessment' on a scale of zero (failed) to 100 (excellent), the statewide average pavement condition index (PCI) is 68, or "at risk." Local streets and roads will fall to "poor' condition (Score of 48) by 2033 based on existing funding levels available to cities and counties. NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Lodi hereby directs the City Attorney to take all necessary steps to cooperate with the League of California Cities and other cities and counties in supporting litigation against the state of California if the legislature enacts and the governor signs into law legislation that unconstitutionally diverts the City's share of funding from the Highway Users Tax Account (HUTA), also known as the "gas tax," to fund the state general fund; and RESOLVED FURTHER that the City Manager or City Clerk shall send this resolution with an 'accompanying letter from the mayor to the Governor and each legislator, informing them in the clearest of terms of the City's adamant resolve to oppose any effort to frustrate the will of the electorate as expressed in Proposition 5 (1974) and Proposition 2 (1998) concerning the proper use and allocation of the gas tax; and RESOLVED FURTHER that a copy of this Resolution shall be sent by the City Manager or City Clerk to the League of California Cities, the local chamber of commerce, and other community groups whose members are affected by this proposal to create unsafe conditions on the streets of our City for pedestrians, bicyclists, and motorists. Dated: June 17, 2009 ------------------------------------------------------------------- ------------------------------------------------------------------- I hereby certify that Resolution No. 2009-77 was passed and adopted by the City Council of the City of Lodi in a special meeting held June 17,2009, by the following vote: AYES: COUNCIL MEMBERS — NOES: COUNCIL MEMBERS — ABSENT: COUNCIL MEMBERS — ABSTAIN: COUNCIL MEMBERS — 2009-77 HANSEN, JOHNSON, MOUNCE NONE HITCHCOCK, KATZAKIAN 1 California StatewideLocal Streets and Roads Needs.1sse�sment, Nichols Consulting Engineers, Chtd. (2008), sponsoredby the League of California Cities, California State Association of Counties and County Engineers Association of California. CITY COUNCIL LARRY HANSEN, Mayor PHIL KATZAKIAN, Mayor Pro Tempore SUSAN HITCHCOCK BOBJOHNSON JOANNE MOUNCE June 18,2009 CITY OF LODI CITY HALL, 221 WEST PINE STREET P.O. BOX 3006 LODI, CALIFORNIA 95241-1910 (209) 333-6702 / FAX (209) 333-6807 www.lodi.gov cityclerk & odi.gov Governor Arnold Schwarzenegger State Capitol Building Sacramento, California 95814 BLAIR KING, City Manager RANDI JOHL, City Clerk D. STEPHEN SCHWABAUER City Attorney SUBJECT: HIGHWAY USERS TAX ACCOUNT (HUTA) —"GAS TAX" Dear Governor Schwarzenegger: Enclosed please find a copy of Resolution No. 2009-77, "A Resolution of the Lodi City Council Authorizing the City Attorney to Cooperate with the League of California Cities and Other Cities and Counfies In Litigation Challenging the Constitutionality of Any Seizure by State Government of the City's Street Maintenance Funds," adopted by the City Council of the City of Lodi on June 17, 2009. Please note by way of this resolution, the City of Lodi is clearly and adamantly opposing any effort to frustrate the will of the electorate as expressed in Proposition 5 (1974) and Proposition 2 (1998) concerning the proper use and allocation of the gas tax. Please feel free to contact me should you have any questions or comments -regarding the above. Sincerely, Phil Katzakian Mayor Pro Tempore C: Senator Dave Cogdill Assembly Member Bill Berryhill Assembly MemberAlyson Huber League of California Cities File