HomeMy WebLinkAbout14-252 Letter in Support of AB 1521 & SB 69CITY OF
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DREAM EXTREME,
TO:
FROM:
11-All
REPORT TO CITY COUNCIL
Honorable Mayor and Members of the City Council
Grant Yates, City Manager
August 26, 2014
SUBJECT: A Letter of Support from the City Council of the City of Lake Elsinore,
California, in Support of AB 1521 and SB 69
Recommendation
It is recommended that the City Council authorize the Mayor to sign the letter of support for
AB 1521 and SB 69.
Discussion
The Cities of Jurupa Valley, Eastvale, Wildomar and Menifee have all suffered from the
inequity in funding from the result of the passing of SB 89 in 2011. The legislation to
correct this inequity and restore funding is at a critical point. It is anticipated that the bill
should pass out of legislature by midweek and be on the Governors' desk for his
consideration by the end of the week. This letter of support is to show our elected
representatives that the Riverside County cities are unified in supporting this legislation.
Fiscal Impact
There is no fiscal impact to the City of Lake Elsinore associated with this letter of support.
Prepared by: Virginia J. Bloom, City Clerk
Approved by: Grant M. Yates, City Manager
Attachment: Draft Letter of Support
August 19, 2014
The Honorable Richard Roth
California State Senate
State Capitol Bldg, Rm 4034
Sacramento, CA 95814
FAX: (916) 651 -4931
The Honorable Steve Fox
California State Assembly
State Capitol Bldg, Rm 3132
Sacramento, CA 95814
FAX: (916) 319 -2136
RE: AB 1521 (Fox) and SIB 69 (Roth). Local government finance: vehicle
license fee adjustment - Notice of Support
Dear Senator Roth and Assembly Member Fox:
The City of Lake Elsinore is pleased to support AB 1521 and SB 69, which
together would restore funding stability to recently incorporated cities and
cities that annexed inhabited territory, and establish a foundation to support
sustainable and compact growth policies.
First and foremost, these measures are about doing the right thing to rectify
a critical problem affecting several of the state's recently incorporated cities,
and cities that annexed inhabited unincorporated territory to improve service
delivery in furtherance of local agency formation commission (LAFCO)
policies.
For more than 50 years, the majority portion of Vehicle License Fee (VLF)
revenues went to cities to provide for local resident services. Newly
incorporated cities and inhabited areas annexed by cities were included in
these allocations and received a share of VLF revenues based on population
growth. However, after the 2004 VLF - property tax swap agreement, the
amount VLF revenues received by cities was significantly cut after the VLF
rate was reduced from 2% to 0.65 %. To make up for lost revenues, city
budgets were backfilled by additional dollar- for - dollar property tax revenues.
While the VLF - property tax swap solved one problem, it created another in
that it contained no provisions recognizing that cities would annex inhabited
areas (an activity supported by various state policies) or that future
incorporations would occur in a state with continued population growth. As a
result, newly incorporated cities or areas annexed by cities after the 2004 tax
swap received no backfill property tax dollars in order to compensate for lower
VLF revenues.
This problem was further exasperated following the adoption of SB 89 in
2011; which swept all city VLF revenues to fund law enforcement grants that
previously had been funded by the state. As a result, recently incorporated
cities were particularly harmed. SB 69 addresses the fiscal harm experienced
by affected cities by allowing them to participate in the funding solution that
was provided to all cities and counties at the time of the 2004 VLF - property
tax swap.
AB 1521 and SB 69 also take into consideration the major state policy
challenges presented if future incorporations and annexations of county
incorporated territory no longer make sense. Cities are not static and need
the ability to grow and meet the needs of California's ever - increasing
population. In order to ensure successful city growth, whether new or existing,
stable revenue sources must be established. AB 1521 and SB 69 achieve
this by utilizing existing county Educational Revenue Augmentation Fund
(ERAF) dollars. By accessing ERAF funds, cities are guaranteed a stable
revenue source with no fiscal impact on schools.
Besides addressing the fiscal harm that occurred to cities with the passage
of SB 89, this solution also provides long -term policy benefits to the state.
State policies for achieving sustainability, greenhouse gas reduction, smart
growth, infill and transit - oriented development and preserving farmland and
open space have staked much on the role and success of cities. The fiscal
costs of this solution are minor compared to the policy costs of not supporting
city- centered compact growth.
For these reasons, the City of Lake Elsinore supports AB 1521 and SB 69.
Sincerely,
Natasha Johnson
Mayor
City of Lake Elsinore
M. Senator Roth
Assembly Member Melendez
Erin Sasse, League Public Affairs
Dan Carrigg, League of California Cities, FAX: (916) 658 -8240