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Home My WebLink About6/17/2009 - STAFF REPORTS - 2.Q. L1^ 1400 K Street, Suite 400 • Sacramento, California 95814 EAGUE Phone: 916.658.8200 Fax: 916.658.8240 OF CALIFORNIA www.cacities.org � CITIFS TO: City Officials FROM: Chris McKenzie, Executive Director RE: Sample Resolution RE: Litigation Over Unconstitutional Diversion of Local Share of Motor Fuel (Gas)Tax DATE. Friday,June 12, 2009 Baftround. In his final revised May Revision, the Governor proposed the seizure of almost $1 billion in city and county shares of revenues in the highway Users Tax Account (HUTA) from the motor fuel tax (or gallonage gas tax) to fund past and future highway bond debt service payments out of the general fund.Yesterday the Joint Budget Conference Committee endorsed this recommendation on a party line vote_ It is clear to attorneys employed and retained by the League that this recommendation, if enacted into law, would be unconstitutional. In fact, in both 1974 and 1998 voters enacted limitations on the power of the legislature to seize and use HUTA gas tax funds, allowing only loans to the general fund on a limited basis. The attached legal opinion from the Sacramento law firm of Nielsen, Merksamer, Parrinello, Mueller & Naylor, LLP, sets forth the legal analysis and conclusion that the Governor's proposal would violate Article XIX of the California Constitution. Resolution. The League has developed the attached sample resolution for cities that wish to direct their city attorney to cooperate with the League, other cities and counties in planning litigation challenging the constitutionality of the proposed theft of city and county funds. It does not commit the city to filing litigation, but it directs the city attorney to cooperate and work with the League and other local governments to advance the litigation. If litigation proves necessary in the next month or so, we anticipate there will be some lead cities and counties, along with the League. It may eventually prove desirable to have every interested city named in the litigation. As a result, asking your city attorney to get engaged and cooperate in the planning of this possible next step is appropriate and to send the message you will not take this lying down. Your City's Gras Tax Loss. For your city's projected 2009-10 motor vehicle fuel tax revenue loss see 11tLD=//www_californiacitytnance.com/I-IUTAproiFYlo.pdf The total amount of loss for each city is in the far right column. Under the Governor's proposal, approved by the Budget Conference committee, your city would lose this entire amount. In the next year, the loss would be about 75%of this amount. Where to Send Copies. The draft resolution directs the city cleric to send copies to your legislators, the Governor, the League, and various community groups that care about traffic safety in your city. We would appreciate you faxing copies to both your League Regional Public Affairs Manager and the League's Sacramento Office (Fax 916- 658-8240). Questions. If you have any questions or need any information please contact your League Regional Public Affairs Manager. City attorneys should contact Patrick Whitnell, League General Counsel,at pwhitncll(Dcacities.org. p �4e "► �ZOo9 A 7'r-aa-1 2 . Highway Users Tax(l) - Projected FY2009-10 Revenues Streets & Highways Code Sec. TOTALI SeC2105" _ sef�2106"'F-Sec2107"'J..SeC7107.5(4)1...........FY2009-10 -I... .........................I-..."1'.."1.11,11'.."...1.... I........................ .....I.....---- I RANCHO SANTA 271'1020 172,752 361,170 6.000 810,942 ...... ......... . .............�ff's'...8...3. ..................4...9...2".'7'...3-7- 7,-5-0-0- ...0...3",'8'...6'7'..... ............................200,319 a.6 3.I..9....................128,975.. . . .......................266,951. ...- --.......................6,000-,..-..................602,245 ..... ... ................ T.,.............................................................................11,111,11,11,11.1 1-1-1.111.................................................. 1924,808 1,196,758 2,565,058 10.000 5,596,624 .......... ................................18....15191 6 9 188,597.......................6,000.. .......................428,689 - --....8......1- SEAL BEACH 141,523 1052285 6,000 6 4 2 3 3 8 ...........................................I......"..'....11........ 1649 7,500 1,205,563 VILLA PARK 34.087 26,046 45,426 2,000 107,559 WESTMINSTER R.6.T.fi� 318,642 i.6 16 4 2 675,158 7 5 0 0 1,507,935 1.235,299 .9.2.9.9......... ......495,785. . . ... ....................7,500. ............. 1,110,619 .. 1.1.1-.1- .... ...................................................................................................................................... .... ................. ...................................................................................................................... AUBURN 72,286 60,456 96.331 3,000 232,073 .................. ...... ...................'-T6-1............................................................................................................................................... COLFAX .103 12,698 13,463 1,000 37,2'6�... LINCOLN 216,526 �.F.5 2 6 171,232 288,550 6,000 682,309 ..........................136-1-1...I...I......I.......I...I--.......................................................... LOOMTS .076 32,645 48,075 2,000 118,795 RDCKLIN230,145 3901774 7,500 921,653 ...................... .......................... ....... ......... ........�6T,4...96....................792,202...''-''...-...................1'0',0-00 l-,858,-15-7- ................................................................................................................................................ mm • ...........................................................................................................................PORTOLA 12,243 10,921 111,576 1,000 1 ................. .......... ...... ................................ .......... ... ................................................................................. BANNING ---- -------------- ---- -- ----.-.--..1--.-5.4.,3...8..6...I 1I.'.11.........9.11.51.,.2...3..4.......I........... 2 0 5.7 40 .........6....I0...0.....0......................4...6...91.,3 F2 81 ........... . . .............1.11.1 ..... .I....I....11.....I..........................I.................................. ................................ i��1427 105,201 228,449 6,000 511,NT . ............................................................... . ......... ... .. '... .... .... "' '......"'...'....................."''.............................."'4,...- ...tEyt4ff -- -- - - -- -- -- - - .......... . 05 164.204 5.000 36.... CALIMESA 41'042 28,943 54,694 2,000 126,679 CANYON LAKE5 4 0 1 3 9 8 0 2 0 4 3 0 0 0 183,529 -- - - -- - - ------------285,73D. .-...................1..7.2..,0.5..3..................3.8.0..7.7..3....................7..,.5.0..0...................846,056 . . ... CATHED .55K�Fff Ely,... ------I---------------220,660........................133,996.. -. -......................294,058- . - ---......................6,000-. .--....................654,714 - . - - CORONA802,909 Y 9 0 9 474,532 1.06 9 9 8 2 10,000 2.3 5 7 ...... .......................izi-.9-6..9.......................8-7..9..7..2---------------------I-8-9,-1-9..3----------------------a--0-0--0--------------------4-2-5...1 DESERT HOT SPRINGS 34 "HEMET.. .. ...........................................................404,020.. .................241,236, . . ., ...................589,193 538,409, . ,"......................7,500. ,'.................1,191,165 "- - -Nbfx� OKE§ iF.3 6 7 20,945 36,470 2,000 86,782 .N.M.6............ ..................... ......... .................�6.4.,-6.�4........ �F-,5'...6-6........................7,500"''......................1,307,583"''...... ''.......... 443,923 k-E ........... .......................... .......271,254'... ...................16'...3""5...8...6............. -38,1,,4-82.... . -6,0--0 0- 802,4g - 3"'ii .......... .�19..5-4.....................I..4.1 .7.7.1.....................311,774.. ... .......................6,000....... ..................693,499 . .-. .....................................i................ ------I........................................I..... -WdR'EKb 001.322 590,576 1,334,392 10,000 2,936,290 3241014 727,021 10,000 1,606,588 Okffo ....................................................... .......................9...2",'0'...9-1................. -1,6-8',577 6,00-0- -- 4-4-5-,'6'7� ....................... .2.4 1.5 11...................167,090.. .. .......................369,465. .... .........................7,50D ............................ .......... PALM DESERT i;ZK......... ... . ..................................................................................................... PALM 267,334 155,445 342.931 ---------------------------------------I...I...-.....I......................................................... PERRIS 1939 175,684 389,047 7.500 8 9 RANCHO MIRAGE18 9 4 59,270 1 2 3,7 9 4 4 0 0 0 279,958 . ...............................................1,616,634.. ..................950,450,... .-...............2,154,377-- -, .., ..........................10,000..------------------4,731,461 -.. ... RIVERSIDE 194,274 .g�.2 7 4 118,563 258,895 6,000 577,732 7331437 10,000 1,620,634 ------------------------- WILDOMAR 1976 6,000 742,103 ...........................11........ .................... ................747,328...........I......-10,000.. . 1 ........ 1,651,045 ... .1 ...1. MENIFEE 560,791 ........................ ...... .............................................................I.....,........... .........I................................................................................ 01maY09 (alifornia[.itfinaVLc LOM P@ga 7 of 12 RESOLUTION NO, A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, 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. The City Council of the City of Palm Springs finds: A. 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. B. 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. C. 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. D. 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. E. 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. F. 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. Resolution No. Page 2 G. Cities and counties maintain 81% of the state road network while the state directly maintains just 8%_ H. 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. I. According to a recent statewide needs assessment' on a scale of zero (failed) to 100 (excellent), the statewide average pavement condition index (PC]) 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: SECTION I. City Council hereby directs the City Attorney to 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. SECTION 2. The City Clerk shall send this resolution with an accompanying letter from the Mayor to the Governor and each legislator, informing them in the clearest of terms 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 SECTION 3. A copy of this Resolution shall be sent by the City Clerk 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. ADOPTED THIS 17T" DAY OF JUNE, 2009. David H. Ready, City Manager ATTEST: James Thompson, City Clerk t 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. Resolution No._ Page 3 CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) 55. CITY OF PALM SPRINGS ) I, JAMES THOMPSON, City Clerk of the City of Palm Springs, hereby certify that Resolution No. is a full, true and correct copy, and was duly adopted at a regular meeting of the City Council of the City of Palm Springs on June 17, 2009, by the fallowing vote: AYES: NOES: ABSENT: ABSTAIN: James Thompson, City Clerk City of Palm Springs, California