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HomeMy WebLinkAbout062-09 RESOLUTION NO. 62-2009 FINDING A FISCAL HARDSHIP WILL EXIST IF ADDITIONAL LOCAL PROPERTY TAX FUNDS ARE SEIZED AND ADDITIONAL UNFUNDED MANDATES ARE ADOPTED BY THE STATE OF CALIFORNIA WHEREAS, the current economic conditions have adversely affected city revenues and placed cities under incredible financial pressure; and WHEREAS, this has caused Danville officials to re-open and amend the adopted 2008-09 Financial Plan, reducing personnel costs and making service level cuts in General Government, Police Services, Development and Transportation Services, Maintenance Services, Recreation Services, and capital expenditures totaling $903,955; and WHEREAS, the Town is projecting a $2.1 million reduction in revenues for 2009/10 largely as a result of lower Property and Sales Tax receipts; and WHEREAS, since the early 1990s the State Government of California has seized over $8.6 billion of city property tax revenues statewide to fund the State Budget even after deducting public safety program payments to cities by the State; and WHEREAS, in FY 2007-08 alone the State seized $895 million in city property taxes statewide to fund the State Budget after deducting public safety program payments; and, an additional $350 million in local redevelopment funds were seized in FY 2008-09; and WHEREAS, the most significant impact of taking local property taxes has been to reduce the quality of public safety services cities can provide since public safety comprises the largest part of any city's General Fund budget; and WHEREAS, in 2004, the voters by an 84 % vote margin adopted substantial constitutional protections for local revenues, but the legislature can still "borrow" local property taxes to fund the State Budget; and WHEREAS, on May 5, the Department of Finance announced it had proposed to the Governor that the State "borrow" over $2 billion in local property taxes from cities, towns, counties, and special districts to balance the State Budget, causing deeper cuts in local public safety and other vital services; and WHEREAS, for Danville, the estimated amount to be borrowed would be $982,153; and WHEREAS, in the past the Governor has called such "borrowing" proposals fiscally irresponsible because the State will find it virtually impossible to repay and it would only deepen the State's structural deficit, preventing the State from balancing its budget; and WHEREAS, the Legislature is currently considering hundreds of bills, many of which would impose new costs on local governments that can neither be afforded nor sustained in this economic climate; and WHEREAS, state agencies are imposing, or considering, many regulations imposing unfunded mandates on local governments without regard to how: local agencies will be able to comply with these mandates while meeting their other responsibilities; and WHEREAS, the combined effects of the seizure of the Town's property taxes, increasing unfunded mandates, and the revenue losses due to the economic downturn have placed the Town's budget under serious fiscal pressure; and WHEREAS, the Town of Danville cannot sustain the loss of any more property tax funds or be burdened with any more state mandates as they will only deepen the financial challenges facing the Town; and WHEREAS, a number of the Town's financial commitments arise from contracts, including long-term capital leases and debt obligations which support securities in the public capital markets, that the Town must honor in full unless modified by mutual agreement of the parties; now, therefore, be it RESOLVED, that the Danville Town Council has determined that the Town will experience a fiscal hardship if the. recommendation of the Department of Finance to "borrow" $2 billion of local property taxes is supported by the Governor and the Legislature; and, be it further RESOLVED, that the Danville Town Council is strongly and unconditionally opposed to the May 5 proposal of the Department of Finance and any other state government proposals to borrow or seize any additional local funds, including property tax, redevelopment tax increment, and the Town's share of the Proposition 42 transportation sales tax; and be it further RESOLVED, that the Danville Town Council strongly urges the State Legislature and Governor to suspend the enactment of any new mandates on local governments until such time as the economy has recovered and urges the State to provide complete funding for all existing and any new mandates; and be it further PAGE 2 OF RESOLUTION NO. 62-2009 RESOLVED, the City Clerk shall send copies of this resolution to the Governor, the Town's State Senator, the Town's State Assembly Member, and the League of California Cities. APPROVED by the Danville Town Council at a regular meeting on June 2, 2009, by the following vote: A)(ES: Arnerich, Doyle, Andersen, Shimansky, Ste e NOES: None ABSTAINED: None ABSENT: None APPROVED AS TO FORM: 7W13 ~/_ CITY ATTORNEY ATTEST: PAGE 3 OF RESOLUTION NO. 62-2009