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HomeMy WebLinkAbout2006-04-12 STAFF REPORTS 2B o�ppLMgQ� ry U N • 4O,AiCO i i cq<iFORN�P CITY COUNCIL STAFF REPORT DATE: April 12, 2006 Consent Agenda SUBJECT: RESOLUTION TO ENDORSE AND SUPPORT CALIFORNIA READING AND LITERACY IMPROVEMENT AND PUBLIC LIBRARY CONSTRUCTION AND RENOVATION BOND ACT OF 2006 FROM: David H. Ready, City Manager BY: Library SUMMARY The June 6, 2006 election ballot will include Proposition 81, California Reading and Literacy Improvement and Public Library Construction and Renovation Bond Act. Proposition 81 will provide bond funds to renovate and build community libraries, thus making more local money available to expand literacy programs, create homework centers, and improve services to seniors, businesses, and people with disabilities. RECOMMENDATION: Adopt Resolution No. "A Resolution of the City Council of the City of Palm Springs Endorsing and Supporting the 2006 California Reading and Literacy Improvement and Public Library Construction and Renovation Bond Act of 2006." STAFF ANALYSIS: Palm Springs is home to the Valley's first library and currently the Valley's most comprehensive and varied library collection. The City is exploring options for the expansion and renovation of its current facility. By supporting other libraries all over the State of California also in need of funds for new buildings, the City will be in the forefront of cities that consider quality of life issues such as literacy, service to children, seniors and businesses imperative for healthy communities. The Library Board of Trustees has voted unanimously to support Proposition 81 and has mailed their letter of support to the campaign. FISCAL IMPACT: Finance Director Review: None. Item No. 2 . B . City Council Staff Report April 12, 2006 Resolution to Support Proposition 81 Barbara Roberts, Director of Library Services h 9,,JButzlaff, s isatant City Manager David H. Ready, City a g[er Attachments: Copy of Proposition 81 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, ENDORSING AND SUPPORTING THE 2006 CALIFORNIA STATE LIBRARY BOND. Whereas, Governor Arnold Schwarzenegger has signed into law the California Reading and Literacy Improvement and Public Library Construction and Renovation Bond Act of 2006; and Whereas, approval by voters of that bond would authorize the State of California to sell $600 million in bonds to assist local governments in the construction of public libraries; and Whereas, passage of that bond, which will appear on the June 2006 ballot, will permit many cities and counties across the state to construct library facilities; and Whereas, the California State Library has identified that at least 579 unfunded library construction projects which total $4.4 billion in need statewide; and Whereas, Palm Springs, is a community that is part of the fastest growing county in California, will continue to have ongoing and growing needs for public library services; and Whereas, use of existing libraries in Palm Springs and Riverside County continues to grow and expand as new libraries are added, new services offered, and hours increased: Now Therefore, Be it Resolved, that the Palm Springs City Council supports the passage and funding of the California Reading and Literacy Improvement and Public Library Construction and Renovation Bond Act of 2006, and urges all citizens, community leaders, and organizations in Riverside County to lend their support to the creation of this public library bond fund. ADOPTED this_ day of April, 2006. David H. Ready, City Manager ATTEST: Jaimes Thompson, City Clerk CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) 1, 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 April 12, 2006, by the following vote: AYES: NOES: A13SENT: ABSTAIN: James Thompson, City Clerk City of Palm Springs, California Legislative Analyst's Office 2/16/06 4:00 p.m. FINAL Proposition 81 California Reading and Literacy Improvement and Public Library Construction and Renovation Bond Act of 2006 Background For the most part, cities, counties, and special districts pay the costs of operating and building local libraries. These libraries do receive some money from the state and federal government for local library operations. For example,local libraries throughout the state are receiving about$46 million this year from the state and federal governments for various operating costs. The state also provides funds to help pay for the construction and renovation of library facilities.This funding typically is raised through general obligation bonds. For example: • In 1988, state voters approved Proposition 85,which authorized$75 million in general obligation bonds to fund grants to local agencies for building, expanding, or renovating library buildings. • In 2000,voters approved Proposition 14,which provided an additional $350 million in bond funds for library projects. Both grant programs required local agencies to pay for 35 percent of the cost of the project with their own funds. Proposition 14 funded 45 projects,many of which are currently under way. Eligible applications were submitted for an additional 60 projects Page 1 of 4 Legislative Analyst's Office 2/16/06 4:00 p.m. FINAL which were not funded. These unfunded applications sought$506 million in state bond funding. Proposal Tlus proposition allows the state to sell$600 million of general obligation bonds for local library facilities. The state would use these bond funds to provide grants to local governments to: • Construct new libraries. • Expand or renovate existing libraries. • Acquire land for new or expanded libraries. • Provide related furnishings and equipment. These grant funds could not be used for (1)books and other library materials, (2) certain administrative costs of the project, (3) interest costs or other charges for financing the project, or (4) ongoing operating costs of the new or renovated facility. This grant program is similar to the 2000 program. For example,local agencies would be required to pay 35 percent of the project cost and individual grants could range from$50,000 to$20 million. The new program grants first priority to eligible applications that were submitted but not funded under Proposition 14. No more than$300 million of the new funding would be reserved for these applications. The remaining bond funds would be available for new applications. The measure also reserves$25 million for "joint use'projects Page 2 of 4 Legislative Analyst's Office 2/16/06 4:00 p.m. FINAL serving both a library and a public education institution (such as a school district or college). The proposition provides for a seven-member state board to adopt policies for the program and decide which local agencies would receive grants. In reviewing local applications,the board must consider factors such as (1) the needs of urban, suburban, and rural areas; (2) the age and condition of existing library facilities in the area; and (3)the financial ability of the local agencies to operate library facilities. Bonds. General obligation bonds are backed by the state,meaning the state is required to pay the principal and interest costs on these bonds. State General Fund revenues would be used to pay these costs. These revenues come primarily from state personal and corporate income taxes and the state sales tax. Fiscal Effects Costs to Pay Off Bonds. For these bonds, the state would likely make principal and interest payments from the state's General Fund over a period of about 30 years. If the bonds are sold at an average interest rate of 5 percent, the cost would be almost $1.2 billion to pay off both the principal ($600 million) and interest($570 million). The average payment would be about$40 million per year. Local Cost to Match State Funds.As mentioned above, in order to receive a state grant a local agency must provide 35 percent of the project cost. Thus, on a statewide basis, local agencies would need to spend about$320 million. The cost would vary by local agency depending on the cost of the specific project. Page 3 of 4 Legislative Analyst's Office 2/16/06 4:00 p.m. FINAL Costs to Operate New Library Facilities. Local agencies that build new or expand existing libraries would likely incur additional operating costs. These costs— statewide—could be several millions of dollars annually. Page 4 of 4