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Home My WebLink AboutAgenda Report - June 15, 2022 C-19CITY OF Ago :ice011 z CALIFORNIA AGENDA ITEM COb /49 COUNCIL COMMUNICATION AGENDA TITLE: Receive Report Regarding Communication Pertaining to a 2022-23 State Budget Request to Invest $1.6 Billion in the Vitality of Cities. MEETING DATE: June 15, 2022 PREPARED BY: City Clerk RECOMMENDED ACTION: Receive report regarding communication pertaining to a 2022-23 State budget request to invest $16 billion in the vitality of cities. BACKGROUND INFORMATION: The City received a request from the League of California Cities requesting cities send a letter of support immediately, in light of Legislature passing a final budget before June 15, 2022. Cal Cities is requesting that the State budget the following amounts: $500 million for the creation of the Housing and Economic Development Program: The elimination of redevelopment agencies in 2011 stripped local governments of the most powerful and successful tool to revitalize urban cores, help jumpstart the construction of affordable housing, and support economic development activities. The loss of this tool also hinders local officials' ability to help advance the state's bold climate policy objectives, including minimizing vehicle miles traveled and reducing greenhouse gas emissions. This is why establishing the Housing and Economic Development Program is crucial to achieving our housing supply and climate action goals. $933.5 million for local governments for costs owed for state -mandated programs: According to data obtained from the State Controller's Office, as of October 2021, the state owes cities, counties, and special districts $933.5 million, including estimated accrued interest, in mandated costs incurred since 2004 through fiscal year 2019-20. $180 million for organic waste recycling: The Department of Resources Recycling and Recovery's (CalRecycle) Organic Waste Reduction Regulations (SB 1383), adopted in November 2020, require local governments to reduce landfill disposal of organic waste 75% by 2025 and to increase edible food waste recovery 20%. Compliance obligations for local governments began in early 2022 and local governments continue to develop a comprehensive suite of local collection, enforcement, and funding programs. The 2021 Budget Act included $60 million to create the SB 1383 local assistance grant program, however, additional funding is greatly needed. The attached letter, signed by Mayor Pro Tempore Hothi, was sent out on June 2, 2022. APPROVED: Steve Schwabauer Stephen Schwabauer, City Manager FISCAL IMPACT: FUNDING AVAILABLE: Signature: Not applicable. Not applicable. Olivia Nashed Olivia Nashed City Clerk Signature: Email: onashed@lodi.gov Email: sschwabauer@lodi.gov CITY COUNCIL MARK CHANDLER, Mayor MIKEY HOTHI, Mayor Pro Tempore SHAK KHAN DOUG KUEHNE ALAN NAKANISHI June 2, 2022 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 citynlerk(51odi.gov The Honorable Nancy Skinner Chair, Senate Budget and Fiscal Review Committee 1021 O Street, Suite 8630 Sacramento, CA 95814 STEPHEN SCHWABAUER City Manager OLIVIA NASHED City Clerk JANICE D. MAGDICH City Attorney The Honorable Philip Ting Chair, Assembly Budget Committee 1021 O Street, Suite 8230 Sacramento, CA 95814 The Honorable Vince Fong The Honorable Jim Nielsen Vice Chair, Assembly Budget Vice Chair, Senate Budget and Fiscal Committee Review Committee 1021 O Street, Suite 4630 1021 O Street, Suite 7110 Sacramento, CA 95814 Sacramento, CA 95814 RE: 2022-23 State Budget Request to Invest $1.6 billion in the Vitality of Cities Dear Senator Skinner, Senator Nielsen, Assembly Member Ting, and Assembly Member Fong, In the spirit of a strong state and local government partnership to benefit all Californians, the City of Lodi respectfully requests a one-time allocation of $1.6 billion (General Fund) in fiscal year 2022-23 to establish a Housing and Economic Development Program, implement organic waste recycling regulations, and reimburse local governments for unfunded, state -mandated programs. Local governments are essential to the strength of California's economy, and the vitality of local governments is dependent upon fiscal stability. These proposed investments would support the economic vitality of local governments and would also help further the state's ambitious climate resiliency and affordable housing goals. We write to urge the Legislature to seize the historic opportunity the state budget surplus presents to invest in the hearts of our communities and advance our shared goals. A strong state -local fiscal partnership would propel significant investments in a bright, sustainable future for all Californians. Establish a Housing and Economic Development Program - $500 million The City of Lodi supports establishing a Housing and Economic Development Program that would facilitate a partnership between the state and local agencies who adopt local property tax increment financing tools to support affordable housing, upgrade essential infrastructure, and spur economic development. This program is crucial to achieving our housing supply and climate action goals. While cities appreciate the property tax tools the Legislature created after dissolving redevelopment to help address a range of community issues, the lack of funding has resulted in few cities being able to fully utilize them. Tools such as the Enhanced Infrastructure Financing Districts, Community Revitalization and Investment Authorities, and Affordable Housing Authorities may differ in their focus and details, but their common challenge is they lack sufficient financial capacity. The establishment of a state -local partnership to provide matching funds would greatly expand the viability of these tools, and propel significant investments in affordable housing, public infrastructure, and job creation. Organic Waste Recycling Program Implementation - $180 million Local governments are the backbone for achieving California's goal to reduce greenhouse gas emissions through organic waste recycling programs. Local governments need significant additional funding implement this state -mandated program without diverting existing resources from essential city services and increasing the financial burden on taxpayers. The Department of Resources Recycling and Recovery's (CalRecycle) Organic Waste Reduction Regulations (SB 1383), adopted in November 2020, require local governments to reduce landfill disposal of organic waste 75% by 2025 and to increase edible food waste recovery 20%. Compliance obligations for local governments began in early 2022 and local governments continue to develop a comprehensive suite of local collection, enforcement, and funding programs. Cities and counties greatly appreciate the Legislature's creation of the SB 1383 local assistance grant program in the 2021 Budget Act. However, additional funding is greatly needed, presenting a renewed opportunity for state and local partnership to further our shared climate goals Compliance with the SB 1383 regulations has caused local governments to raise their rates to cover the additional costs of administering the program. At a time when inflation is at its highest rate in decades, our residents are already feeling the negative impacts on their personal budgets. This is the right time for the state to continue to fund the implementation of this program to help keep solid waste and recycling rates from increasing dramatically. Reimburse Local Governments for State -Mandated Programs - $933.5 million According to data obtained from the State Controller's Office, as of October 2021, the state owes cities, counties, and special districts more than $933 million, including estimated accrued interest, in mandated costs incurred since 2004. Local governments rely on the state to reimburse them in a timely manner for costs related to state -mandated programs. Failing to pay for these costs threatens the stability of local budgets and the ability of local governments to fund essential services to the community. Given that local governments have diligently carried out crucial, unfunded programs for many years, we urge the Legislature to make local governments whole and support the financial sustainability of local governments. It is paramount that all levels of government work in tandem to advance shared state and local goals. Only then will it be possible to realize strong, thriving communities for all Californians. Thank you for considering our request and for the continued partnership. Sincerely, Mikey Hothi Mayor Pro Tempore City of Lodi cc: Senator Susan Eggman (Via email: suson.eaaman@sen.ca.gov) Assembly Member Jim Cooper (Via email: jim.cooDer@asm.ca.gav) The Senate Budget Committee (Via email: SBUD.Committee@senate.ca.gov) The Assembly Budget Committee (Via email: AsmBud9et@asm_ca.g0v) Stephen Qualls at squalls@cacities.org The League of California Cities (Via email: cit letters@calcities.org)