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Home My WebLink About07/07/2009, C11 - ADOPT A RESOLUTION AUTHORIZING THE CITY ATTORNEY TO COOPERATE WITH THE LEAGUE OF CALIFORNIA CITIES, council M °°°� j acEnaa Repopm '�" CITY OF SAN LUIS OBISPO FROM: Jonathan P. Lowell, City Attorney SUBJECT: 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 RECOMMENDATION 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. DISCUSSION Background The State of California is facing an estimated $24 billion budget deficit. With the failure of the May 2009 state ballot propositions, both Governor Schwarzenegger and the Legislature are turning to local governments to help bridge this fiscal gap at the State level. Governor Schwarzenegger has proposed seizing almost $1 billion in city and county shares of revenues in the Highway Users Tax Account (HUTA, or gas taxes)to fund transportation-related debt service costs in FY 2009-10, and an additional $750 million in FY 2010-11. Recently, the Joint Budget Conference Committee approved the Governor's recommendation. For FY 2009-10, the State proposes diverting $986 million in funds that cities and counties rely upon to fund their public works programs, including staffing costs. This redirection of funds will lead to thousands of job losses statewide and put an immediate halt to local transportation improvements across the state. For the City of San Luis Obispo, the loss is approximately $767,000 in FY 2009-10 and an unknown amount in FY 2010-11. The City's Public Works Department estimates that such a large reduction in FY 2009-10 may result in: I. Reduction in the funds available for the annual street resurfacing projects, causing the City's infrastructure to deteriorate. 2. Reduction of resources for on-going maintenance and operation of.the City's streets, sidewalks, traffic signals, signage and striping. 3. Increased potential for accidents due to malfunctioning signals, inadequate signage/striping, and defective sidewalk and street conditions. 4. Increased calls to the Police, Fire and Public Works departments to respond to such incidents. Resolution Authorizing Litigation Challenging Seizure by State Government Page 2 5. Reduction in the staff available to perform maintenance of streets, sidewalks, traffic signals, street lights, and traffic striping. The City could be forced to significantly cut back on maintenance services it provides. Proposed State Action Legally Suspect Attorneys for the League of California Cities have determined that the Governor's proposal is a violation of Article XIX of the California Constitution. According to the League, both Proposition 5 (1974) and Proposition 2 (1998) placed limitations on the power of the Legislature to seize and use LUTA funds, allowing only loans to the general fund on a limited basis. These limitations are contained in Article XIX, Sections 3, 5 and 6. Proposed Resolution . As part of its grassroots strategy to fight the Governor's proposal, the League of California Cities has asked all cities to adopt resolutions directing their City Attorneys to cooperate with the League, other cities, and counties in planning litigation challenging the constitutionality of the gas tax takeaway. This resolution does not commit the City of San Luis Obispo to filing litigation or expending City funds. CONCURRENCES The Public Works Director and the Director of Finance and Information Technology concur with this recommendation. FISCAL IMPACT There is no financial impact from adoption of this resolution. The City is at risk of losing approximately $767,000 in gas tax funds should the Legislature approve the Governor's proposal to seize almost $1 billion in city and county shares of revenues in the Highway Users Tax Account in FY 2009-10. ALTERNATIVES The Council could modify the resolution as it sees fit. Council could decide not to adopt the resolution. ATTACHMENT Resolution T:\Council Agenda Reports\City Attorney CAR\RUTA CAR.doc C Il-� ATTACHMENT RESOLUTION NO. XXXX (2009 Series) 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 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 FY 2009-10 budget the Governor has proposed transferring $1 billion of local gas taxes and weight fees to the state general fund to balance the state budget, and over $700 million in local gas taxes permanently in future years, immediately jeopardizing 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. Furthermore, cities expect that liability damage awards will mount as basic maintenance is ignored and traffic accidents, injuries and deaths increase; 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 maintains just 8%; and WHEREAS, ongoing street maintenance is a significant public safety concern. A city's failure to maintain its street pavement (potholes filling, sealing, overlays, etc.), traffic signals, signs, and street lights has a direct correlation to traffic accidents, injuries and deaths; and Cl(3 R Resolution No. (2009 Series) ATTACHMENT ., Page 2 WHEREAS, according to a recent statewide needs assessment (California Statewide Local Streets and Roads Needs Assessment, Nichols Consulting Engineers, Chtd. (2008), sponsored by the League of California Cities, California State Association of Counties and County Engineers Association of California) on a scale of zero (failed) to 100 (excellent), the statewide average pavement condition index 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 by the Council of the City of San Luis Obispo that the City Attorney take all necessary steps to cooperate with the League of California Cities, 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 BE IT FURTHER RESOLVED that the City staff shall send this resolution, with an accompanying letter from the Mayor, to the Governor and to state legislators, informing them 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 8 (1998) concerning the proper use and allocation of the gas tax; and BE IT FURTHER RESOLVED that a copy of this Resolution shall be sent by City staff 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. Upon motion of , seconded by , and on the following vote: AYES: NOES: ABSENT: �1�-� Resolution No. (2009 Series) ATTACHMENT Page 3 The foregoing resolution was adopted this day of , 2009. Mayor David F. Romero ATTEST: Audrey Hooper City Clerk APPROVED AS TO FORM: Jo P. Lowell City Attorney (f 11 - s