The URL can be used to link to this page

Home My WebLink About2010-04-27 City Council Agenda Item No. 6REPORT TO CITY COUNCIL TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: ROBERT A. BRADY CITY MANAGER DATE: APRIL 27, 2010 SUBJECT: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, SUPPORTING AB 1645 - NESTANDE/ARAMBULA Background Assembly Bill 1645 is co-authored by Assemblyman Brian Nestande and Assemblyman Juan Arambula. AB 1645 would require the state budget to include and account for an estimated $200 billion in unfunded liabilities. Discussion AB 1645 will prohibit the inclusion of revenues estimated from laws, programs, or executive actions not in effect at the time the budget is submitted to the Legislature by the Governor. This bill would also require the Governor or Department of Finance to submit a report to the Legislature with the annual budget detailing all of the state's key liabilities and recommendations for retirement of these liabilities. Fiscal Impact There is no fiscal impact to the City associated with the adoption of this resolution. Recommendation It is recommended that the City Council consider adoption of the attached resolution supporting AB 1645. Prepared and Approved by: Attachment Robert A. Brady City Manager AGENDA ITEM NO.6 Page 1 of 6 Page 2 of 6 RESOLUTION NO. 2010-014 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LAKE ELSINORE, CALIFORNIA, SUPPORTING ASSEMBLY BILL 1645 WHEREAS, the State Legislature's priority needs to be creating a transparent with built-in accountability measures; and WHEREAS, AB 1645 would require the budget to include and account for $200 billion in unfunded liabilities; and WHEREAS, these liabilities, according to the Legislative Analyst's Office include pensions and retiree health benefits for state workers and the construction of new infrastructure; and WHEREAS, AB 1645 will prohibit the inclusion of revenues estimated from laws, programs or executive actions not in effect at the time the budget is submitted to the Legislature by the Governor; and WHEREAS, AB 1645 would require the Governor, or the Department of Finance acting on his or her behalf, at the same time as the Governor's budget is submitted to the Legislature, to submit a report to the Legislature, setting forth a list of the state's liabilities that will affect the state's financial health in the future; NOW, THEREFORE, the City Council of the City of Lake Elsinore, California, does hereby resolve as follows: Section 1. That it supports adoption of Assembly Bill 1645. PASSED, APPROVED AND ADOPTED at a regular meeting of the City Council of the City of Lake Elsinore, California, this 27th day of April 2010. MELISSA A. MELENDEZ, MAYOR CITY OF LAKE ELSINORE ATTEST: CAROL COWLEY INTERIM CITY CLERK Page 3 of 6 Resolution No. 2010-014 Page 2 of 2 APPROVED AS TO FORM: BARBARA ZEID LEIBOLD CITY ATTORNEY STATE OF CALIFORNIA COUNTY OF RIVERSIDE SS CITY OF LAKE ELSINORE I, CAROL COWLEY, Interim City Clerk of the City of Lake Elsinore, California, hereby certify that Resolution No. 2010-014 was adopted by the City Council of the City of Lake Elsinore, California, at a regular meeting held on the 27th day of April 2010, and that the same was adopted by the following vote: AYES: NOES: ABSENT: ABSTAIN: CAROL COWLEY INTERIM CITY CLERK Page 4 of 6 Assemblyman Brian Nestande 64th Assembly District What is the background of this proposal? The Legislature's priority needs to be creating a transparent budget with built-in accountability measures. Assembly Bill 1645, co-authored with Assemblyman Juan Arambula (I - Fresno), requires the budget to include and account for an estimated $200 billion in unfunded liabilities. These liabilities, according to the Legislative Analyst's Office (LAO), include pensions and retiree health benefits for state workers, and the construction of new infrastructure. Unlike a private firm, the state is currently not required to account for these liabilities in the budget, which is a partial contributor to our fiscal mess. In addition, this measure would prohibit the counting of one time sales in the current budget until the sale is complete. Failed budget solutions account for a significant part of the new deficit. For example, the state assumed it was going to receive $1 billion for selling part of the State Compensation Insurance Fund, but this sale failed to happen pushing our state deeper into dept. The Legislature needs to make fully-informed decisions when it comes to crafting future budgets. We need to take into account every year the state's key liabilities as part of the budget discussion. We must look at both the short and long term debts that need to be paid and find ways to responsibly pay them off in time. Fact Sheet AB 1645 What specifically will this bill do? AB 1645 will prohibit the inclusion of revenues estimated from laws, programs, or executive actions not in effect at the time the.budget is submitted to the Legislature by the Governdr This measure would also require the Governer';. or Department of Finance, to submit a report to the Legislature with the annual budget detailing all of the state's key liabilities and recommendations for retirement of these liabilities. In addition to the report, AB 1645 would require the Governor's budget to include a section that addresses the retirement_of these key liabilities. Which code sections does tliis`bih affect? Amends Section 13337 of thre Gbvernmdht Code, relating to state fiscal:affairs Support? None on file Oppose? None on file Who is the staff contact for this, bill? Madhavi Knickerbocker 916:319:2664 Madhavi.Knickerbocker(a asm:ta.gdv! Page 5 of 6 Summary Page 1 of 1 1. 1 Under existing law, various duties and responsibilities are imposed upon the Governor and the Department of Finance in connection with the preparation and submission of the annual State Budget to the Legislature at each regular session thereof, including, among other things, the requirement to include a complete plan of all proposed expenditures and estimated revenues for the ensuing fiscal year. This bill additionally would require the Governor, or the Department of Finance acting on his or her behalf, at the same time as the Governor's Budget is submitted to the Legislature, to submit a report to the Legislature, setting forth a list of the state's key liabilities, in the nature of debt, deferred payments, and other liabilities that will affect the state's financial health in the future. The bill would direct that the report include a discussion of budget-related, infrastructure-related, and retirement-related liabilities, as well as recommendations for the retirement of those liabilities. The bill also would require the Governor's Budget to include a section that specifies the percentages and amounts of General Fund revenues that must be set aside and applied toward retiring key liabilities in accordance with the recommendations contained in the report. The bill further would restrict the Governor from including in the budget as estimated revenues those revenues estimated to be generated from laws, programs, or executive actions not in effect or effectuated at the time the budget is submitted to the Legislature. Page 6 of 6 http://ct2k2.capitoltrack.com/BillSummary.asp?item=LongSumtnary&measure=AB 1645 4/15/2010