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HomeMy WebLinkAboutAgenda Report - April 5, 2017 C-10TM CITY OF LODI COUNCIL COMMUNICATION AGENDA ITEM CiO AGENDA TITLE: Adopt Resolution Opposing Assembly Bill 199 (Chu) — Prevailing Wage on Private Residential Construction — and Approving Letter of Opposition MEETING DATE: April 5, 2017 PREPARED BY: City Clerk RECOMMENDED ACTION: BACKGROUND INFORMATION: Adopt resolution opposing Assembly Bill 199 (Chu) — Prevailing Wage on Private Residential Construction — and approving letter of opposition. On March 16, 2017, the City received correspondence from the Building Industry Association of the Greater Valley to join it and many other organizations in opposing AB 199 (Chu) — Prevailing Wage on Private Residential Construction. AB 199 would eliminate the long-standing residential exemption from prevailing wage rates and make private, market -rate residential development a public works project for which a prevailing wage would be paid. This measure would have dramatic negative cost implications for newly -constructed and privately - financed housing in California and it could not come at a worse time. A copy of the request, the text of the bill, a resolution of opposition, and a draft letter of opposition is attached for Council's review and information. For the reasons stated above and in the attached correspondence, it is recommended that the City Council adopt the resolution of opposition and authorize the execution and delivery of the proposed correspondence. FISCAL IMPACT: Not applicable. FUNDING AVAILABLE: Not applicable. JMF Attachments 'Aa J �+hifer M. li rraiolo y Clerk APPROVED: limit.„.1441•4 rig . en "1• , .. - er, City Manager Jennifer Ferraiolo From: Steve Schwabauer Sent: Thursday, March 16, 2017 4:02 PM To: Jennifer Ferraiolo Subject: Fwd: BIA Requesting Assistance from City of Lodi Attachments: AB 199 (Chu) - Coalition Letter of Opposition - 03.08.17.pdf; AB 199 Local Govt Resolution.docx Forwarded message From: John Beckman <johnb(a bia v.org> Date: Mar 16, 2017 3:49 PM Subject: BIA Requesting Assistance from City of Lodi To: Steve Schwabauer <sschwabauer a@lodi.gov> Cc: Steve, We are taking the unprecedented action of requesting cities to join our coalition to stop AB 199. Attached is our coalition letter along with a template for a local government resolution. Below is the latest update from our coalition. Please let me know if you have any questions and, how can I assist you in getting in this on the next City Council agenda? Respectfully, CARE HOUSING Stop AB 199! Yesterday, the members of the Assembly Labor and Employment Committee voted 5-1 to move AB 199 to the Assembly Appropriations Committee, despite agreeing that the bill needed additional clarification and amendments to not drive up the cost of housing. Hundreds of community groups and leaders officially opposed the bill, including retired California Supreme Court Justice Cruz Reynosa, founder of National Council of La Raza Herman Gallegos, and former member of the California State Assembly and Chair of the California Latino Legislative Caucus Joe Coto. Over 250 opponents of the bill attended the hearing with representatives from affordable housing, social justice, business, taxpayer, building and construction groups. Our CARE Housing Coalition will continue leading the opposition to AB 199 as it moves to the Assembly Appropriations Committee next month. 1 Help us STOP AB 199! Share this video on social media, and follow our !=ac obook and Twitter pages for more updates. See highlights of the testimony of John Gamboa, president of California Community Builders: am Arid they're. strivi►agj, Some o 1 i rrt ;ire, p oy.i:r j up to 80% of their income to € over the -rr cit. John R. Beckman Chief Executive Officer, BIA of the Greater Valley 1701 W. March Lane, Suite F Stockton, CA 95207 209-235-7831 Office 209-235-7837 Fax 209-327-5363 CeII ,ohnBfabiap,v.org www.hiagv.org • Ern Y.6r, T ousan 118 Sive Millions NAHB. www.nahb.org/MA Membership doesn't cost it pays$ "And in this case, it paid big!" -June 19, 2013, $759,630 refunded to members. 2 CALIFORNIA LEGISLATURE -2017-18 REGULAR SESSION ASSEMBLY BILL No. 199 Introduced by Assembly Member Chu January 23, 2017 An act to amend Section 1720 of the Labor Code, relating to public works. LEGISLATIVE COUNSEL'S DIGEST AB 199, as introduced, Chu. Public works: private residential projects. (1) Existing law requires private residential projects built on private property that are built pursuant to an agreement with a state agency, redevelopment agency, or local public housing authority to meet the requirements for projects that are defined as "public works," including, among other requirements, the payment of prevailing wages. Existing law defines the term "political subdivision" for the purposes of these requirements to include any county, city, district, public housing authority, public agency of the state, and assessment or improvement districts. Existing law makes a willful violation of specific laws relating to the payment of prevailing wages and the hours worked on public works projects a misdemeanor. This bill would instead require private residential projects built on private property that are built pursuant to an agreement with the state or a political subdivision to meet the requirements for projects that are defined as "public works," thus expanding the types of projects that must meet these requirements. By expanding the definition of a crime, this bill would impose a state -mandated local program. (2) The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. 99 AB 199 —2— This bill would provide that no reimbursement is required by this act for a specified reason. Vote: majority. Appropriation: no. Fiscal committee: yes. State -mandated local program: yes. The people of the State of California do enact as follows: 1 SECTION 1. Section 1720 of the Labor Code is amended to 2 read: 3 1720. (a) As used in this chapter, "public works" means: 4 (1) Construction, alteration, demolition, installation, or repair 5 work done under contract and paid for in whole or in part out of 6 public funds, except work done directly by any public utility 7 company pursuant to order of the Public Utilities Commission or 8 other public authority. For purposes of this paragraph, 9 "construction" includes work performed during the design and 10 preconstruction phases of construction, including, but not limited 11 to, inspection and land surveying work, and work performed during 12 the postconstruction phases of construction, including, but not 13 limited to, all cleanup work at the jobsite. For purposes of this 14 paragraph, "installation" includes, but is not limited to, the 15 assembly and disassembly of freestanding and affixed modular 16 office systems. 17 (2) Work done for irrigation, utility, reclamation, and 18 improvement districts, and other districts of this type. "Public 19 work" does not include the operation of the irrigation or drainage 20 system of any irrigation or reclamation district, except as used in 21 Section 1778 relating to retaining wages. 22 (3) Street, sewer, or other improvement work done under the 23 direction and supervision or by the authority of any officer or 24 public body of the state, or of any political subdivision or district 25 thereof, whether the political subdivision or district operates under 26 a freeholder's charter or not. 27 (4) The laying of carpet done under a building lease -maintenance 28 contract and paid for out of public funds. 29 (5) The laying of carpet in a public building done under contract 30 and paid for in whole or in part out of public funds. 31 (6) Public transportation demonstration projects authorized 32 pursuant to Section 143 of the Streets and Highways Code. 99 -3 — AB 199 1 (7) (A) Infrastructure project grants from the California 2 Advanced Services Fund pursuant to Section 281 of the Public 3 Utilities Code. 4 (B) For purposes of this paragraph, the Public Utilities 5 Commission is not the awarding body or the body awarding the 6 contract, as defined in Section 1722. 7 (b) For purposes of this section, "paid for in whole or in part 8 out of public funds" means all of the following: 9 (1) The payment of money or the equivalent of money by the 10 state or political subdivision directly to or on behalf of the public 11 works contractor, subcontractor, or developer. 12 (2) Performance of construction work by the state or political 13 subdivision in execution of the project. 14 (3) Transfer by the state or political subdivision of an asset of 15 value for less than fair market price. 16 (4) Fees, costs, rents, insurance or bond premiums, loans, interest 17 rates, or other obligations that would normally be required in the 18 execution of the contract, that are paid, reduced, charged at less 19 than fair market value, waived, or forgiven by the state or political 20 subdivision. 21 (5) Money loaned by the state or political subdivision that is to 22 be repaid on a contingent basis. 23 (6) Credits that are applied by the state or political subdivision 24 against repayment obligations to the state or political subdivision. 25 (c) Notwithstanding subdivision (b): 26 (1) Private residential projects built on private property are not 27 subject to the requirements of this chapter unless the projects are 28 built pursuant to an agreement with a state agcncy, redevelopment 29 agcncy, or local public housing authority. the state or a political 30 subdivision. 31 (2) If the state or a political subdivision requires a private 32 developer to perform construction, alteration, demolition, 33 installation, or repair work on a public work of improvement as a 34 condition of regulatory approval of an otherwise private 35 development project, and the state or political subdivision 36 contributes no more money, or the equivalent of money, to the 37 overall project than is required to perform this public improvement 38 work, and the state or political subdivision maintains no proprietary 39 interest in the overall project, then only the public improvement 40 work shall thereby become subject to this chapter. 99 AB 199 — 4 — 1 (3) If the state or a political subdivision reimburses a private 2 developer for costs that would normally be borne by the public, 3 or provides directly or indirectly a public subsidy to a private 4 development project that is de minimis in the context of the project, 5 an otherwise private development project shall not thereby become 6 subject to the requirements of this chapter. 7 (4) The construction or rehabilitation of affordable housing units 8 for low- or moderate -income persons pursuant to paragraph (5) or 9 (7) of subdivision (e) of Section 33334.2 of the Health and Safety 10 Code that are paid for solely with moneys from the Low and 11 Moderate Income Housing Fund established pursuant to Section 12 33334.3 of the Health and Safety Code or that are paid for by a 13 combination of private funds and funds available pursuant to 14 Section 33334.2 or 33334.3 of the Health and Safety Code do not 15 constitute a project that is paid for in whole or in part out of public 16 funds. 17 (5) Unless otherwise required by a public funding program, the 18 construction or rehabilitation of privately owned residential projects 19 is not subject to the requirements of this chapter if one or more of 20 the following conditions are met: 21 (A) The project is a self-help housing project in which no fewer 22 than 500 hours of construction work associated with the homes 23 are to be performed by the home buyers. 24 (B) The project consists of rehabilitation or expansion work 25 associated with a facility operated on a not-for-profit basis as 26 temporary or transitional housing for homeless persons with a total 27 project cost of less than twenty-five thousand dollars ($25,000). 28 (C) Assistance is provided to a household as either mortgage 29 assistance, downpayment assistance, or for the rehabilitation of a 30 single-family home. 31 (D) The project consists of new construction, expansion, or 32 rehabilitation work associated with a facility developed by a 33 nonprofit organization to be operated on a not-for-profit basis to 34 provide emergency or transitional shelter and ancillary services 35 and assistance to homeless adults and children. The nonprofit 36 organization operating the project shall provide, at no profit, not 37 less than 50 percent of the total project cost from nonpublic 38 sources, excluding real property that is transferred or leased. Total 39 project cost includes the value of donated labor, materials, and 40 architectural and engineering services. 99 — 5 — AB 199 1 (E) The public participation in the project that would otherwise 2 meet the criteria of subdivision (b) is public funding in the form 3 of below-market interest rate loans for a project in which 4 occupancy of at least 40 percent of the units is restricted for at 5 least 20 years, by deed or regulatory agreement, to individuals or 6 families earning no more than 80 percent of the area median 7 income. 8 (d) Notwithstanding any provision of this section to the contrary, 9 the following projects shall not, solely by reason of this section, 10 be subject to the requirements of this chapter: 11 (1) Qualified residential rental projects, as defined by Section 12 142(d) of the Internal Revenue Code, financed in whole or in part 13 through the issuance of bonds that receive allocation of a portion 14 of the state ceiling pursuant to Chapter 11.8 (commencing with 15 Section 8869.80) of Division 1 of Title 2 of the Government Code 16 on or before December 31, 2003. 17 (2) Single-family residential projects financed in whole or in 18 part through the issuance of qualified mortgage revenue bonds or 19 qualified veterans' mortgage bonds, as defined by Section 143 of 20 the Internal Revenue Code, or with mortgage credit certificates 21 under a Qualified Mortgage Credit Certificate Program, as defined 22 by Section 25 of the Internal Revenue Code, that receive allocation 23 of a portion of the state ceiling pursuant to Chapter 11.8 24 (commencing with Section 8869.80) of Division 1 of Title 2 of 25 the Government Code on or before December 31, 2003. 26 (3) Low-income housing projects that are allocated federal or 27 state low-income housing tax credits pursuant to Section 42 of the 28 Internal Revenue Code, Chapter 3.6 (commencing with Section 29 50199.4) of Part 1 of Division 31 of the Health and Safety Code, 30 or Section 12206, 17058, or 23610.5 of the Revenue and Taxation 31 Code, on or before December 31, 2003. 32 (e) Notwithstanding paragraph (1) of subdivision (a), 33 construction, alteration, demolition, installation, or repair work on 34 the electric transmission system located in California constitutes 35 a public works project for the purposes of this chapter. 36 (f) If a statute, other than this section, or a regulation, other than 37 a regulation adopted pursuant to this section, or an ordinance or a 38 contract applies this chapter to a project, the exclusions set forth 39 in subdivision (d) do not apply to that project. 99 AB 199 — 6 — 1 (g) For purposes of this section, references to the Internal 2 Revenue Code mean the Internal Revenue Code of 1986, as 3 amended, and include the corresponding predecessor sections of 4 the Internal Revenue Code of 1954, as amended. 5 (h) The amendments made to this section by either Chapter 938 6 of the Statutes of 2001 or the act adding this subdivision shall not 7 be construed to preempt local ordinances requiring the payment 8 of prevailing wages on housing projects. 9 SEC. 2. No reimbursement is required by this act pursuant to 10 Section 6 of Article XIII B of the California Constitution because 11 the only costs that may be incurred by a local agency or school 12 district will be incurred because this act creates a new crime or 13 infraction, eliminates a crime or infraction, or changes the penalty 14 for a crime or infraction, within the meaning of Section 17556 of 15 the Government Code, or changes the definition of a crime within 16 the meaning of Section 6 of Article XIII B of the California 17 Constitution. 0 99 RESOLUTION NO. 2017- A RESOLUTION OF THE LODI CITY COUNCIL OPPOSING ASSEMBLY BILL 199 (CHU) — PREVAILING WAGE ON PRIVATE RESIDENTIAL CONSTRUCTION WHEREAS, AB 199 by Assemblymember Chu could overturn current law and mandate higher housing costs on seniors, and low-income and working Californians already struggling to make ends meet; and WHEREAS, AB 199 and mandated prevailing wage could result in up to a 46% increase in the total costs of new apartments and housing in California; and WHEREAS, the average California home already costs about 250% more than the national average and California's average monthly rent is 50% higher than the rest of the country; and WHEREAS, the impact of homelessness is being seen and felt more and more in our local communities; and WHEREAS, AB 199 and mandated prevailing wage could put the over one million low-income Californians who receive SSI/SSP grants at a greater risk of becoming homeless; and WHEREAS, when housing costs rise, families are forced to shift their spending away from basic needs like food and health care; and WHEREAS, we desperately need affordable housing for our teachers, police, firefighters, nurses, and other hard-working residents of the City of Lodi; and WHEREAS, California's housing shortage costs the state more than $140 billion per year in lost economic input, including lost construction investment as well as foregone consumption of goods and services because Californians spend so much of their income on housing; and WHEREAS, when the cost of construction skyrockets, projects may become unfeasible and new for -sale and rental housing projects may be abandoned, resulting in tens of thousands of jobs killed; and WHEREAS, AB 199 could result in the state and local governments losing millions of dollars in permit fees and property tax revenue, meaning less money for vital services like public safety, education and health care; and WHEREAS, AB 199 could drive up the cost of housing, increase homelessness, reduce economic growth and decrease state and local tax revenue. NOW, THEREFORE BE IT RESOLVED, by the Lodi City Council that it does hereby oppose AB 199 (Chu) — Prevailing Wage on Private Residential Construction. Date: April 5, 2017 I hereby certify that Resolution No. 2017- was passed and adopted by the Lodi City Council in a regular meeting held April 5, 2017, by the following vote: AYES: COUNCIL MEMBERS — NOES: COUNCIL MEMBERS — ABSENT: COUNCIL MEMBERS — ABSTAIN: COUNCIL MEMBERS — 2017 - JENNIFER M. FERRAIOLO City Clerk CITY COUNCIL DOUG KUEHNE, Mayor ALAN NAKANISHI, Mayor Pro Tempore MARK CHANDLER BOB JOHNSON JOANNE MOUNCE 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©Iodi.gov April 6, 2017 The Honorable Tony Thurmond Chair, Assembly Labor and Employment Committee State Capitol, Room 4005 Sacramento, CA 95814 STEPHEN SCHWABAUER City Manager JENNIFER M. FERRAIOLO City Clerk JANICE D. MAGDICH City Attorney RE: Assembly Bill 199 — Prevailing Wage on Private Residential Construction — OPPOSE The City of Lodi writes to express its strong opposition to AB 199 (Chu), a bill that would eliminate the long-standing residential exemption from prevailing wage rates and thereby make private, market -rate residential development a public work project for which a prevailing wage would be paid. This measure would have dramatic negative cost implications for newly constructed and privately financed housing in California and it could not come at a worse time. Countless newspaper articles and recent reports have highlighted the dire condition of housing in California. California's Department of Housing and Community Development (HCD) estimates that we must build at least 180,000 units to keep pace with demand, not accounting for the backlog of 2 million units that has accrued over the past several decades. Homeownership rates are at abysmal levels — the lowest level since the 1940s — currently 49th nationally. The Legislative Analyst Office and HCD found that (1) California's average housing costs are two and a half times the national average; (2) faced with high housing costs, commute distances and the resulting adverse environmental consequences are significantly increased as they search for more affordable housing; (3) higher housing costs shift spending away from paying health insurance resulting in adverse health consequences, increased likelihood of becoming homeless, increased dependence on government subsidized services and shortened lifespan'. With the current crisis of undersupply, highest -in -the -nation housing costs, and exploding unaffordability ranking at the top of the state's most pressing political, social and economic concerns, it would seem that a proposal to add as much as 45-50 percent to the cost of a newly built home is ill-advised as it will definitely hamper housing production in the state and make housing more expensive and more out of reach for an ever- growing number of Californians. Given that for every $1,000 increase in the cost of a home, 15,000 California households are priced out of the market,2 this measure would directly impact hundreds of thousands of Californians and their ability to attain the American dream of homeownership, disproportionately impacting teachers, firefighters, police, nurses, service employees in the public and private sector, minorities and millennials. This can only increase inequality in California. 1 National Coalition for the Homeless (http://www.nationalhomeless.org/factsheets/health.html) 2 National Association of Home Builders - 2016 "Priced Out" Estimates Assembly Bill 199 — Prevailing Wage on Private Residential Construction — OPPOSE April 6, 2017 Page Two While the legislative session is already witnessing an influx of bills hoping to ameliorate the housing crisis, AB 199's mandate to pay prevailing wages for private residential projects constructed on private property would undoubtedly further exacerbate it. For these reasons, we voice our ardent opposition to this measure. Sincerely, Doug Kuehne Mayor, City of Lodi cc: The Honorable Kansen Chu, Author Members, Assembly Labor and Employment Committee Jennifer Richard, Chief Consultant, Assembly Labor and Employment Committee Joshua White, Assembly Republican Caucus, Office of Policy RESOLUTION NO. 2017-51 A RESOLUTION OF THE LODI CITY COUNCIL OPPOSING ASSEMBLY BILL 199 (CHU) — PREVAILING WAGE ON PRIVATE RESIDENTIAL CONSTRUCTION WHEREAS, AB 199 by Assemblymember Chu could overturn current law and mandate higher housing costs on seniors, and low-income and working Californians already struggling to make ends meet; and WHEREAS, AB 199 and mandated prevailing wage could result in up to a 46 percent increase in the total costs of new apartments and housing in California; and WHEREAS, the average California home already costs approximately 250 percent more than the national average and California's average monthly rent is 50 percent higher than the rest of the country; and WHEREAS, the impact of homelessness is being seen and felt more and more in our local communities; and WHEREAS, AB 199 and mandated prevailing wage could put the over one million low- income Californians who receive SSI/SSP grants at a greater risk of becoming homeless; and WHEREAS, when housing costs rise, families are forced to shift their spending away from basic needs like food and health care; and WHEREAS, we desperately need affordable housing for our teachers, police, firefighters, nurses, and other hard-working residents of the City of Lodi; and WHEREAS, California's housing shortage costs the state more than $140 billion per year in lost economic input, including lost construction investment, as well as foregone consumption of goods and services because Californians spend so much of their income on housing; and WHEREAS, when the cost of construction skyrockets, projects may become unfeasible and new for -sale and rental housing projects may be abandoned, resulting in tens of thousands of jobs lost; and WHEREAS, AB 199 could result in the state and local governments losing millions of dollars in permit fees and property tax revenue, meaning less money for vital services like public safety, education, and health care; and WHEREAS, AB 199 could drive up the cost of housing, increase homelessness, reduce economic growth, and decrease state and local tax revenue. NOW, THEREFORE BE IT RESOLVED that the Lodi City Council does hereby oppose AB 199 (Chu) — Prevailing Wage on Private Residential Construction. Date: April 5, 2017 I hereby certify that Resolution No. 2017-51 was passed and adopted by the Lodi City Council in a regular meeting held April 5, 2017, by the following vote: AYES: COUNCIL MEMBERS — Chandler, Johnson, Mounce, and Mayor Kuehne NOES: COUNCIL MEMBERS — None ABSENT: COUNCIL MEMBERS — Nakanishi ABSTAIN: COUNCIL MEMBERS — None 2017-51 7)51(LAAa-L-84 NNIFI='y FERRAIOLO ity Clerk CITY COUNCIL DOUG KUEHNE, Mayor ALAN NAKANISHI, Mayor Pro Tempore MARK CHANDLER BOB JOHNSON JOANNE MOUNCE 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([ lodL goy April 6, 2017 The Honorable Tony Thurmond Chair, Assembly Labor and Employment Committee State Capitol, Room 4005 Sacramento, CA 95814 (916) 319-2115 STEPHEN SCHWABAUER City Manager JENNIFER M. FERRAIOLO City Clerk JANICE D. MAGDICH City Attorney RE: Assembly Bill 199 — Prevailing Wage on Private Residential Construction — OPPOSE The City of Lodi writes to express its strong opposition to AB 199 (Chu), a bill that would eliminate the long-standing residential exemption from prevailing wage rates and thereby make private, market -rate residential development a public work project for which a prevailing wage would be paid. This measure would have dramatic negative cost implications for newly constructed and privately financed housing in California and it could not come at a worse time. Countless newspaper articles and recent reports have highlighted the dire condition of housing in California. California's Department of Housing and Community Development (HCD) estimates that we must build at least 180,000 units to keep pace with demand, not accounting for the backlog of 2 million units that has accrued over the past several decades. Homeownership rates are at abysmal levels — the lowest level since the 1940s — currently 49th nationally. The Legislative Analyst Office and HCD found that (1) California's average housing costs are two and a half times the national average; (2) faced with high housing costs, commute distances and the resulting adverse environmental consequences are significantly increased as they search for more affordable housing; (3) higher housing costs shift spending away from paying health insurance resulting in adverse health consequences, increased likelihood of becoming homeless, increased dependence on government subsidized services and shortened lifespan. With the current crisis of undersupply, highest -in -the -nation housing costs, and exploding unaffordability ranking at the top of the state's most pressing political, social and economic concerns, it would seem that a proposal to add as much as 45-50 percent to the cost of a newly built home is ill-advised as it will definitely hamper housing production in the state and make housing more expensive and more out of reach for an ever- growing number of Californians. Given that for every $1,000 increase in the cost of a home, 15,000 California households are priced out of the market,2 this measure would directly impact hundreds of thousands of Californians and their ability to attain the American dream of homeownership, disproportionately impacting teachers, firefighters, police, nurses, service employees in the public and private sector, minorities and millennials. This can only increase inequality in California. 1 National Coalition for the Homeless (http://www.nationalhomeless.org/factsheets/health.html) 2 National Association of Home Builders - 2016 "Priced Out" Estimates Assembly Bill 199 — Prevailing Wage on Private Residential Construction — OPPOSE April 6, 2017 Page Two While the legislative session is already witnessing an influx of bills hoping to ameliorate the housing crisis, AB 199's mandate to pay prevailing wages for private residential projects constructed on private property would undoubtedly further exacerbate it. For these reasons, we voice our ardent opposition to this measure. Sincerely, /1/ Doug Riatece Doug Kuehne Mayor, City of Lodi cc: The Honorable Kansen Chu, Author(assemblymember.chu@assembly.ca.gov) Members, Assembly Labor and Employment Committee (916-319-2191) Jennifer Richard, Chief Consultant, Assembly Labor and Employment Committee (916-319-2191) Joshua White, Assembly Republican Caucus, Office of Policy (1020 N Street, Rm. 400, Sacramento) RESOLUTION NO. 2017-51 A RESOLUTION OF THE LODI CITY COUNCIL OPPOSING ASSEMBLY BILL 199 (CHU) — PREVAILING WAGE ON PRIVATE RESIDENTIAL CONSTRUCTION WHEREAS, AB 199 by Assemblymember Chu could overturn current law and mandate higher housing costs on seniors, and low-income and working Californians already struggling to make ends meet; and WHEREAS, AB 199 and mandated prevailing wage could result in up to a 46 percent increase in the total costs of new apartments and housing in California; and WHEREAS, the average California home already costs approximately 250 percent more than the national average and California's average monthly rent is 50 percent higher than the rest of the country; and WHEREAS, the impact of homelessness is being seen and felt more and more in our local communities; and WHEREAS, AB 199 and mandated prevailing wage could put the over one million low- income Californians who receive SSI/SSP grants at a greater risk of becoming homeless; and WHEREAS, when housing costs rise, families are forced to shift their spending away from basic needs like food and health care; and WHEREAS, we desperately need affordable housing for our teachers, police, firefighters, nurses, and other hard-working residents of the City of Lodi; and WHEREAS, California's housing shortage costs the state more than $140 billion per year in lost economic input, including lost construction investment, as well as foregone consumption of goods and services because Californians spend so much of their income on housing; and WHEREAS, when the cost of construction skyrockets, projects may become unfeasible and new for -sale and rental housing projects may be abandoned, resulting in tens of thousands of jobs lost; and WHEREAS, AB 199 could result in the state and local governments losing millions of dollars in permit fees and property tax revenue, meaning Tess money for vital services like public safety, education, and health care; and WHEREAS, AB 199 could drive up the cost of housing, increase homelessness, reduce economic growth, and decrease state and local tax revenue. NOW, THEREFORE BE IT RESOLVED that the Lodi City Council does hereby oppose AB 199 (Chu) — Prevailing Wage on Private Residential Construction. Date: April 5, 2017 I hereby certify that Resolution No. 2017-51 was passed and adopted by the Lodi City Council in a regular meeting held April 5, 2017, by the following vote: AYES: COUNCIL MEMBERS — Chandler, Johnson, Mounce, and Mayor Kuehne NOES: COUNCIL MEMBERS — None ABSENT: COUNCIL MEMBERS — Nakanishi ABSTAIN: COUNCIL MEMBERS — None gNNIFE' FERRAIOLO ity Clerk 2017-51