HomeMy WebLinkAboutAgenda Report - February 5, 2003 I-01CiTy oF Low
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RECOMMENDATION: No action needed.
BACKGROUND INFORMATION. The Mayor has requested that the City Manager provide an update
regarding the State budget during every Council meeting with
particular note of any impacts to the City's budget.
The most recent update regarding the State budget is focused on the Vehicle License Fee (VLF) and the
"trigger" for the backfill. The State Assembly, on Tuesday January 28, 2003 passed ABX1 4 on a 45 — 33
vote which clarifies how the VLF can be restored due to insufficient funds in the State General. Fund. It is
expected that the Senate Budget Committee will consider the bill January 30, 2003. Both Chief Adams
and Chief Fret z joined their counterparts at the Assembly hearing.
Attached for Council's information is a copy of the League of California Cities '? recent article regarding the
VLF hearing, and a copy of the City Manager's Letter to the Editor dated January 28, 2003.
Additionally, the City Manager is in the process of meeting with employees from all Departments to keep
staff informed of possible State impacts to the City. Thus far he has met with: Police officers, Community
Development, Community Center, Public, Works - City Hall staff, Public Works — Streets, Library, Human
Resources, and Parks and Recreation. He is scheduled to complete the remaining Departments and
Divisions by raid -February, During these visits, the City Manager is cautioning staff regarding budget
concerns with particular focus on implementing a hiring freeze, deferring Capital projects, scrutinizing
travel requests and equipment and vehicle purchases. The City Manager has committed to keeping
employees up-to-date as the City proceeds with the budget process.
Funding. Not applicable.
Respectfully submitted,
Ja . t S. Keeter
Deputy City Manager
Attachment
APPROVED.
League of California Cl hies Page l of 2
NeWs and information > News Updates > Assembly Passes VLF Trigger Bill
Assembly Passes VLF Trigger Bill
Photo: Some of the approximately 100 police chiefs and
Officers Awl came to the CaVitoS to obserse the
Assembly debate on AB 4x.
)romised, on January 28 the Assembly
c. up and passed on a 45 - 33 vote
C1 4 - Wesson (known as Aid 4X), the
'trigger bill that clarifies how the VLF
be restored due to insufficient funds in
state general fund. (Qlick mere tosee
your. jjan bjy_Meaiber voted.)
With the gallery packed with approximately
100 police chiefs and other uniformed
personnel, the debate went on for
approximately 90 minutes, It followed
debate and action on a package of
spending cuts that was tied to the VLF bill.
Speaker Wesson concluded his remarks
with the following:
"it is easy to keep a promise during the gored times, harder to do so during the bad times. A promise is a
promise and we're judged byour steeds and our actions...We will refuse to lay toff 15,000 firefighters. -For
the past few days there's been references to cocaine. I request that you choose your wards more carefully
because I tape issue with that,"
Bill Amendments Exempt Lower -Value Vehicles
Before taking up the bill, the Assembly first took up an amendment offered by Assembly Appropriations
Chair, Carrell Steinberg, reta`snin.g the VLF reduction for vehicles with a "cost price" of $5,000 or less.
Steinberg indicated this.was desirable policy and would immunize the statute from being subject to
referendum. (Apparently statutes containing tax reductions are not subject to referendum as proposed by
Senator Tom McClintock).
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The fiscal impact of the amendment is an estimated $60 million. At this point we are assuming that the
fiscal impact will be barn proportionately throughout the VLF - - including the non-reaiignment portion going
to counties. Cities get about 0% of the VLF revenge (net of state administrative fees), with the ether 70%
going to counties for realignment, special allocations and their base7per-c pita amounts. Assuming all this
remains unchanged, and assuming the legislative staff estimate of $80 million impact is correct, then cities
will be impacted by roughly $24 million.
For information purposes since 1992-1993 the VLF has increased at an average annual rate of 6.550/0e
Between 2001-02 and 2002-03 it is estimated to increase by 7.7%, or $380 million. if the $80 million
reduction occurred, the VLF would still grew by $6300 million,
There is no further word from the Governor's office on his position on the AB 4X, but we knew he
continues to have reservations about it. The bill now grass to the Senate where it awaits efforts by some to
acid amendments dealing with housing element compliance (Tom iorlakson) or changing the statutory
allocation formula.
lett .fli vww.c.acities.oz ctoe.asp` priiital)le=yes&ID=6816 1,130/2003
League of Califoniia Cities
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The bill is expected to be taken up January 30 in the Senate Budget Committee. City officials should
keep up the contacts with their Senators about the importance sof this measure as a means of
restoring the;VLF and protecting local services. And don't forget to thank your Assembly
emb r l COcK. here for re € rm tion.
l-ittp.iiww .eacities.,,)rg/cocoas ?printa ic�ycs&!DD 6816 1/30/2003
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odi
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Gpi n ilon ARCHIVES
National apart
January y 28, 2003
News
Wetf r Lodi needs vehicle license fees
Floc -d
H-ealth
Finan iai The city of Lodi is concerned with the governor's
Home proposed cuts to the motor vehicle license fee
._... M_ backfill.
PLOMbY Five years agcy, during prosperous times, the
Legislature promised to protect local services by
U015ri fi providing funds to backfill cities and counties for the
tat ara it
cuts in vehicle license lecsa
Staff.L�irec nary This reduced yoiw annual vehicle registration east by
FAQ 66 of every. $100 you paid. Prov. Gray Davis, in an
OnliijpF=or rs effort to balance the state's budget, is now proposingm to take away the backfill from cities. This will cost
the city of Lodi $3.4 million over the next 17 months,
While I can sympathize with the governor's fiscal
crisis and his attempts to spread the pain., t cannot
comprehend how the state can balance its budget on
the backs of cities and counties. Lodi already gives
the state 2 million a year through the Education
Relief Augmentation Farad. For Lodi, this equates to
2 million }ger year, or 20 million over 10 year's,
When the VLF offset was authorized in 1998,
legislators from both parties agreed to language
specifically providing that the fees would return to
higher lever whenever "insufficient moneys are
available" in the general fund. Certainly, that day has
arrived and is consistent with existing law,
The city of Lodi cages the governor and the
legislature to fulfill its commitment to the cities by
keeping them "whole" and to abide by the trigger
language regarding the "backfill."
Dixon Flynn
Lodi City Manazger-
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