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CC - Item 3F - Resolution Opposing the State's Potential Siezure of Gas Tax FundsROSEMEAD CITY COUNCIL STAFF REPORT TO: THE HONORABLE MAYOR AND CITY COUNCIL FROM: JEFF ALLRED, CITY MANAG DATE: JUNE 23, 2009 SUBJECT: RESOLUTION OPPOSING THE STATE'S POTENTIAL SIEZURE OF GAS TAX FUNDS SUMMARY The State's Budget Conference Committee has recommend the seizure of Highway Users Tax, commonly referred to as Gas Tax, for the period of two years as a measure to help balance the State's budget. The City's lobbyist, Gonsalvez & Sons, along with the League of California Cities have been strongly opposing this recommendation. The League believes that any seizure of Gas Tax is in direct conflict with the voter's approval of this tax in both 1974 and 1998 and is recommending that City's be prepared to take legal action against the state if the proposed seizure of funds is implemented. The City of Rosemead receives approximately $950,000 per year from Gas Tax which funds programs such as street sweeiping, traffic signal operations and repair, pothole repair, street sign replacement and other street maintenance related costs. Any reduction of these funds by the State will have a significant impact on City's ability to provided necessary services and maintenance to our roads. Programs such as street sweeping not only improve the aesthetics of the community, but are also critical in maintaining our stormwater NPDES permits. Any reduction in street sweeping or street maintenance could result in a violation of our NPDES permit which could potentially result in fines and increased compliance costs. The League of California Cities has requested each city adopt the attached resolution opposing the illegal seizure of Gas Tax funds. While the approval of the resolution does not authorize the filing of a lawsuit by the City, it does direct the City Attorney to support and work wth the League of California Cities in regards to potential legal action if the Governor supports the Budget Committee's proposal. Staff Recommendation That the City Council adopt Resolution 2009-32 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 the state government of the City's street maintenance funds FINANCIAL IMPACT The cost of City Attorney services is included in the proposed 2009-10 Budget. If a lawsuit is filed, staff will bring back an estimate of costs to the City Council for review. PUBLIC NOTICE PROCESS This item has been noticed through the regular agenda notification process. ITEM NO. 3-F APPROVED FOR CITY COUNCIL AGENDA: RESOLUTION: 2009-32 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 WHEREAS, according to a recent statewide needs assessments on a scale of zero (failed) to 100 (excellent), the statewide average pavement condition index (PCI) 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, THE CITY COUNCIL OF THE CITY OF ROSEMEAD HEREBY RESOLVES AS FOLLOWS: 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; and RESOLVED FURTHER, that the city manager or 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 RESOLVED FURTHER, that a copy of this Resolution shall be sent by the city manager or 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. Signatures on next page a 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. PASSED, APPROVED AND ADOPTED this 23rd day of June 2009. Margaret Clark Mayor ATTEST: Gloria Molleda City Clerk APPROVE AS TO FORM: Joseph M. Montes City Attorney