HomeMy WebLinkAbout01-22-2013 c11 league support for vital litigationcounci lj aGEnba uepoat
Meeting Date 1/22/1 3
Number C1 1
C I T Y O F S A N L U I S O B I S P O
FROM :Katie Lichtig, City Manager
Prepared By :April Richardson, Executive Administration Assistan t
SUBJECT :LEAGUE OF CALIFORNIA CITIES REQUEST TO SUPPORT VITA LLITIGATION
RECOMMENDATION
Authorize participation in the League of California Cities Litigation Surcharge Fund .
DISCUSSIO N
Backgroun d
The City of San Luis Obispo is a member organization of the League of California Cities . The
League is an advocacy group that works to protect city revenues and preserve local control for citie sthroughout California . The City benefits in many ways from this member ship including legislativ e
and ballot measure advocacy, member-driven policies and services, legal advocacy, discounte d
education and training, leadership opportunities, and access to research and best practice resources .
• The 2013 membership dues are $14,278 . Throughout the ongoing economic downturn, the Leagu ehas avoided imposing any increase in membership dues . The City has paid the same dues sinc e2008 (Attachment 1). Due to the recession, the League has also experienced revenue reductions
from conference registrations and other major revenue sources, however has maintaine dmembership dues .
Voluntary Litigation Surcharge
The League is involved in a number of litigation cases to defend revenue protections, including tw o
lawsuits that challenge state actions that violate Proposition IA and Proposition 22 (Attachment 2).
The resources required to initiate and bring litigation to a final conclusion are substantial . To
fmance this litigation, the League is asking cities to pay a voluntary litigation surcharge, equal t o10% of the membership dues or $1,427 .80 . The League reports substantial support from citiesacross the state to this request for voluntary support .
FISCAL IMPAC T
The City Manager will use Ventures and Contingencies to pay this fee . There is a current balance o f$72,290 .00 in Ventures and Contingencies . After the expenditure of $1,427 .80, $70,862 .20 willremain.
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Report Title
Page 2
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ALTERNATIV E
Do not authorize participation in the fund .Staff does not recommend this alternative as having th e
League serve as a lead plaintiff on behalf of all California cities in litigation cases greatly reduce s
costs and leverages resources for the City .
ATTACHMENT S
1.Customized Return on Investment Repor t
2.Memo from the Officers of the League of California Citie s
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•Attachment 1
LEAGUE OF CALIFORNIA CITIE S
LEAGUE MEMBERSHIP --A GREAT INVESTMEN T
Customized Return on Investment Report
December 201 2
San Luis Obisp o
San Luis Obis . o's Due s
VLF/PropertyTax Swap 1 -
FY2005-06
13 306
114,724
FY2006.0 7
13,862
416,568
FY2007-0 8
14 27 8
708,533
FV200S-0 9
14,27 8
1,145,884
FY2009-1 0
14 27 8
1,438,549
FY2010-1 1
14 278
1,448,007
FV2011-1 2
14 278
1,255,628
FY2012-1 3
14 278
1,317,899
Total
112,83 6
7,845,78 9Prop. 42 (local streets)198,901 330,209 0 385,149 422,781 II b b 1,337,04 0HUTA state taking blocked 767,335 b b II 767,33 5HUTA and p rop. 42 protected by Prop . 22 a1 1,056,107 1,311,179 1,144,593 3,511,87 9
-
Property Tax loan securitized / prohibited by Prop . 22 111
1,271,642
1,271,642VLF shift prohibited by Prop . 22 141 186,504 186,5043d89 VLF Shift (Now under litigation)-162,269 -168,354 -330,623RedevelopmentTIprotected by Prop .22 n/a 0Redevelopment Disolution (net of ROPS)15 1
Total Return
Rate of Return
313,62 5
24 :1
746,77 7
54 :1
708,53 3
50 :1
1,531,03 3
107 :1
3,900,30 7
273 :1 -
2,690,61 7
188 :1
n/a
2404,53 8
168 :1
n/a
2294,138
0
14,589,567
161 :1 129 :1
1.Net gain In revenues by virtue of the VLF/Property Tax Swap . Growth in PropTax in Lieu of VLF versus estimated growth In VLF had it remained .2.Prop . 22 ended the Legislature's ability to borrow or delay HUTA and Prop . 42 gas tax funds .3.Prop . 22 ended the Legislature's ability to borrow local property taxes . The FY09-10 1oan was securitized . Under Prop1A('04) another borrowing could have occurred In 3 years .4.Prop . 22 ended the Legislature's ability to shift revenue allocations from the 0 .65% state Vehicle License Fee .5.Estimated redvelopment TI net of pass through payments and ROPS returned to local agencies other than the city via property tax apportionment shares .
Our mission is to expand and protect local control for cities through education and advocacy
to enhance the quality of life for all Californians .
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•,:1916)658-8240
Attachment 2
LEAGU E
OF CLIORNI A
C I
A
Tt i E S
December 7, 201 2
TO :
City Managers and City Clerks in non-manager citie s
FROM :
Officers of the League of California Citie s
Bill Bogaard, President, and Mayor of Pasaden a
Jose Cisneros, First Vice-President, and Treasurer of San Francisc o
Tony Ferrara, Second Vice-President, and Mayor of Arroyo Grand e
Mike Kasperzak, Past President, and Mayor of Mountain Vie w
Chris McKenzie, Executive Director
SUBJECT : League Dues for 2013—No Increase !
Voluntary Surcharge to Support Vital Litigatio n
Thank you for your City's membership in the League of California Cities . Enclosed please find
your city's customized 2013 dues statement and related supporting documentation .
League Membership—A Great Investmen t
The value your city derives from membership in the League of California Cities makes th e
payment of League dues a wise investment . Please review the enclosed customized "Return on
Investment" report for your city . It reflects financial benefits your city enjoys as a direct resul t
of the League's legislative and ballot measure advocacy . A strong and effective League i s
central to your city's continued strength and vitality .
Benefits of Membership
The League is the leading advocate for California cities . Protecting local control remains th e
cornerstone of League activities as we work in concert with cities, partners, and coalitio n
members . Please find the enclosed `"Benefits of Membership in the League of California Cities,"
a summary of the more significant benefits cities and city officials receive from Leagu e
membership .
Litigation Strategy to Defend Revenue Protection s
The League and city officials have invested tremendous human and financial resources over th e
past decade to secure meaningful constitutional protection of city revenue sources . Proposition
lA and Proposition 22 represent the will of the voters and significant victories for local control .
However, it is now clear that defending and enforcing these protections will require vigilanc e
and even litigation, possibly on a repeated basis, until the protections are generally understoo d
and respected, especially by the Legislature and Administration .
Our mission is to expand and protect local control for citie s
through education and advocacy to enhance the quality of life for all Californians .
C -
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Attachment 22
•The League currently has two lawsuits pending in the courts challenging state actions that violat e
Prop . IA and Prop. 22 . In League of California Cities v . Chiang,the League is challenging th e
state's shifting VLF from cities and directing this revenue to priorities the state has unilaterall y
deemed to be more important . In a second case,League of California Cities v . Matasantos,the
League is challenging the unconstitutional "claw-back" penalties in the AB 1484 budget traile r
bill that puts city sales and property tax revenues at risk . Every city in the state has an interest in
the outcome of these two lawsuits .
This vital defensive strategy is expensive, but essential . Implementing this strategy is conducte d
at greatly reduced cost and effort if the League serves as the lead plaintiff on behalf of all cities .
The alternative would be for each city or ad hoc groupings of cities to initiate separate lawsuits .
By coordinating their efforts through the League, cities can leverage their resources for th e
benefit of all cities to challenge the state whenever it attempts to weaken the important loca l
revenue protections California cities have worked so hard to achieve .
Voluntary Litigation Surcharg e
As noted, the resources required to initiate litigation and bring it to a final conclusion ar e
substantial . Throughout the ongoing economic downturn that cities have lived with for severa l
years, the League has avoided imposing any increase in dues for membership in the League .
Due to the recession, the League also has experienced a reduction in revenue from conferenc e
registrations and from other major revenue sources . To finance this new and important role for
•the League, the board of directors is asking that each city consider paying an optional surcharg e
equal to ten percent of the League dues to support vital litigation .
The surcharge is shown on the enclosed invoice . The recommended surcharge is optional ; a cit y
may pay the base dues and enjoy all the benefits of membership . However, we sincerely hop e
you will consider supporting this new and important role the League is undertaking because o f
its tremendous value to your city and all cities throughout the state .
Conclusion—California Cities Work Togethe r
Through the League, all cities and all city officials have the opportunity to help shape solution s
to the issues of greatest importance to our cities and the state of California . Working together ,
we pursue those solutions most effectively . It is important for cities to act energetically, i n
unison, and with renewed focus to amplify our voice in key statewide policy matters .
The board of directors encourages your enthusiastic support of and participation in the League o f
California Cities in 2013 . We look forward to continuing our fight together to protect loca l
control and help you provide outstanding service to the residents of your great city .
If you have any questions about this matter, please contact Dan Harrison, Director o f
Administrative Services, at dharrision(Decacities .org or 916-658-8267 .
Enclosures :
•Dues invoice
•Return on Investment Report
•
•Benefits of Membership
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