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HomeMy WebLinkAbout2011-02-08 City Council Item No. 13CITY OF LADE lPC LS11f0 ,KE DREAM EXTREME REPORT TO CITY COUNCIL TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: ROBERT A. BRADY CITY MANAGER DATE: FEBRUARY 8, 2011 SUBJECT: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE IN OPPOSITION TO THE GOVERNOR'S PROPOSAL TO ABOLISH REDEVELOPMENT AGENCIES IN CALIFORNIA Background As part of the Governor's proposed budget for 2011-2012 he has proposed eliminating local redevelopment agencies in California. This would include over 400 redevelopment agencies statewide. This proposal results once again an attempt by the State of California to take local funds to help balance the State budget. This taking of local funds in addition to the reduced property taxes and other revenue reductions caused by the economic recession further stresses the City's budget and the ability to provide vital services to its residents. Discussion Despite the fact that voters have repeatedly passed measures to prevent the State from taking revenues dedicated to funding local government programs, projects and services, the State has seized and borrowed billions of dollars in local government funds. The Governor's proposal is an attempt to side step the most recent will of the voters who on November 2, 2010 overwhelmingly elected to stop State raids of local funds, including redevelopment funds, by approving Proposition 22 by 61 AGENDA ITEM NO. 13 Page 1 of 5 Resolution Opposing State Abolishing Redevelopment Agencies February 8, 2011 Page 2 The City of Lake Elsinore has lost over $7 million in revenues since the State began taking property tax funds in the early 1990's. Additionally, the State took approximately $7 million dollars from the City of Lake Elsinore Redevelopment Agency last fiscal year and will take another $1.4 million this year. Combined, the State will have taken over $15 million in local funds from the City that could have been used to fund projects, services and programs for the citizens of Lake Elsinore. Redevelopment activities throughout California support 304,000 jobs annually, including over 170,000 construction jobs, contribute over $40 billion annually to California's economy in the generation of goods and services, and generate over $2 billion in State and local taxes on average annually. In Lake Elsinore, redevelopment has been used for projects such as the Historic Downtown improvements, the Diamond Stadium, boat launch facilities, Pottery Court and Lakeview Apartment affordable housing projects and the Links at Summerly. Fiscal Impact The elimination of the Lake Elsinore Redevelopment Agency would result in the loss of millions of dollars in local revenue, eliminate economic development opportunities and the loss of jobs that are created by redevelopment projects. Recommendation It is recommended that the City Council adopt the attached resolution opposing the Governor's proposal to abolish redevelopment agencies in California. Prepared and Approved by: Robert A. Brady City Manager Attachment: Resolution Page 2 of 5 RESOLUTION NO. 2011- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, IN OPPOSITION TO THE ADMINISTRATION'S PROPOSAL TO ABOLISH REDEVELOPMENT AGENCIES IN CALIFORNIA WHEREAS, as part of its 2011-12 budget proposal, the Governor has proposed permanently abolishing California's more than 400 local redevelopment agencies; and WHEREAS, this proposal represents more of the same misguided and illegal State budget raids of local government funds that voters have repeatedly sought to end, most recently in November 2010 when an overwhelming 61 % of voters elected to stop State raids of local government funds, including redevelopment funds; and WHEREAS, this proposal will bring very little financial benefit to the State. According to the State Controller's Office, redevelopment agencies have more than $87 billion in bond and other contractual obligations that legally must be repaid before revenues are available to any other purpose. In fact, according to the State Department of Finance's own budget documents, there will be zero State savings in future years from shutting down redevelopment; and WHEREAS, this proposal will destroy local economic development, including hundreds of thousands of jobs and billions of dollars in local economic activity throughout California. In fact, in the City of Lake Elsinore, abolishing redevelopment will destroy economic development, housing and infrastructure programs that have or will fund projects such as the boat launch facilities, Pottery Court and Lakeview Apartment affordable housing projects, Historic Downtown improvements, the Diamond Stadium and the Links at Summerly; and WHEREAS, throughout California, redevelopment activities support 304,000 jobs annually, including 170,600 construction jobs, contribute over $40 billion annually to California's economy in the generation of goods and services, and generate more than $2 billion in state and local taxes in a typical year; and WHEREAS, eliminating redevelopment will take away one of the few tools local governments have to comply with state requirements to plan for more compact urban development supported by transit-oriented development, housing, jobs and infrastructure; and WHEREAS, eliminating redevelopment will destroy the development of affordable housing in California. Redevelopment agencies are the second largest funder of affordable housing, behind only the federal government, responsible for over 98,000 units of affordable housing since 1993; and Page 3 of 5 WHEREAS, shutting down redevelopment agencies is a violation of multiple State and Federal constitutional provisions. THEREFORE, BE IT RESOLVED that the City of Lake Elsinore formally opposes the Administration's proposal to abolish redevelopment in California. THEREFORE, BE IT FURTHER RESOLVED, that the City of Lake Elsinore authorizes its Council and City staff to communicate its opposition to this proposal to the Governor, the Legislature, business groups, and citizens. PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council of the City of Lake Elsinore, California, this 8th day of February 2011 by the following vote: AYES: NOES: ABSENT: ABSTAIN` AMY BHUTTA, MAYOR CITY OF LAKE ELSINORE ATTEST: VIRGINIA BLOOM, CITY CLERK APPROVED AS TO FORM: BARBARA ZEID LEIBOLD CITY ATTORNEY Page 4 of 5 STATE OF CALIFORNIA COUNTY OF RIVERSIDE SS CITY OF LAKE ELSINORE I, Virginia Bloom, City Clerk of the City of Lake Elsinore, California, do hereby certify that the attached Resolution No. was duly approved and adopted by the City Council at the regular meeting thereof held on the day of , 2011. Attached is a true and correct copy of the original document which is on file in my office. EXECUTED this _day of , 2011, at the City Clerk's office of Lake Elsinore, California. Virginia Bloom City Clerk of the City of Lake Elsinore, California Page 5 of 5