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CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
From: Fred Wilson OR\G\NAl
Dept: City Administrator
Date: February 10, 2004
Synopsis of Previous Council Action:
None.
Recommended motion:
Adopt Resolution.
Contact person:
Fred Wilson
Supporting data attached: Yes
FUNDING REQUIREMENTS: Amount:
Subject: Resolution of the Mayor and
Common Council of the City of San
Bernardino in support of Proposition 57
- The Economic Recovery Bond Act,
and Proposition 58 - The Balanced
Budget Act.
MICC Meeting Date: Feb. 17, 2004
Phone:
5122
Ward:
None
Source: (Accl. No.)
Council Notes:
'l4-:-'So ~4-~1
(Accl. Description)
Finance:
Agenda Item No. r:2.f
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CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
STAFF REPORT
Subject:
Resolution of the Mayor and Common Council of the City of San Bernardino in support of
Proposition 57, the Economic Recovery Bond Act, and Proposition 58, the Balanced Budget
Act.
Background:
Proposition 57, the Economic Recovery Bond Act, puts before the voters authorization for the
state to issue a one time Economic Recovery Bond of up to $15 billion to pay off the state's
accumulated General Fund deficit as of June 30, 2004. This bond will only be issued if the
California Balanced Budget Act (Proposition 58) is also approved by the voters. The bond will
be secured by existing tax revenues and by other revenues that could be deposited in a special
fund.
Proposition 58 amends the Constitution, requiring that the state adopt a balanced budget in
which estimated revenues would have to meet or exceed estimated expenditures. This Act
allows the Governor to proclaim a fiscal emergency in specified circumstances and to submit
proposed legislation to address the fiscal emergency. The proposal also establishes a budget
reserve. Subsequent to the issuance of bonds authorized in Proposition 57, most future
borrowing to cover budget deficits will be prohibited.
The League of California City Board of Directors voted on February 7, 2004, to support
Propositions 57 and 58. The San Bernardino County Board of Supervisors voted unanimously to
support the propositions on January 27, 2004. In a letter dated January 29, 2004, (see attached)
the Board of Supervisors requested that the City of San Bernardino also take a position of
support of Propositions 57 and 58.
Recommendation:
Adopt resolution.
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DENNIS HANSBERGER
CHAIRMAN
SUPERVISOR, THIRD DISTRICT
FEB - 4 2004
January 29, 2004
Mr. Fred Wilson
300 North nD" Street
San Bernardino, CA 92402
Dear Mr. Wilson:
On Tuesday, January 27, the San Bernardino County Board of Supervisors unanimously voted
to take a position in support of Propositions 57, the Economic Recovery Bond, and 58, the
Balanced Budget Act.
According to the Legislative Analyst's office, the $15 billion bond proposed in Proposition 57
would provide the state additional one-time funds to address its budget shortfall.
Proposition 58 seeks to amend the Constitution so that a balanced budget must be passed each
year. Should the budget begin to fall out of balance during the year, the legislature would be
required-to take action. Proposition 58 would also set up a special reserve account that is set
up to reach $8 billion (5% of the General Fund).
The Board of Supervisors believes adoption of these two important propositions will begin to
start the process of moving California's State Budget towards structural balance. Your support
in the form of a resolution or a position of support would be genuinely appreciated.
Enclosed is a draft example of the position the County of San Bernardino has taken to assist
your staff in preparation of a resolution for your consideration.
Sincerely,
A/h/~~ elL.. L
DENNIS HANSBERGER
ChairmanfThird District Supervisor
~~~
BILL POS ~
Vice-Chairman/First District Supervisor
~6r_
PA L BlANE
Second District Supervisor
p~' ~'U~~
PATTI AGUIAR
Fourth District Supervisor
DH/sdr
San Bernardino County Government Center. 385 North Arrowhead Avenue, Fifth Floor. San Bernardino, CA 92415-0110. (909) 387-4855
Yucca Valley Office' 57407 Twentynine Palms Highway' Yucca Valley, CA 92284 . (760) 228-5400
Big Bear Lake Office' 477 Summit Boulevard' Big Bear Lake. CA 92315 . (909) 866-0140
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RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SA!'l
BERNARDINO IN SUPPORT OF PROPOSITION 57, THE ECONOMIC RECOVERY
BOND ACT, AND PROPOSITION 58, THE BALANCED BUDGET ACT,
Whereas, the State of California's General Fund revenues grew dramatically in the
latter half of the 1990' s. particularly in the amount of personal income tax revenues generated
as a rcsult of the stock market boom and the taxes paid on stock-option earnings; and
\Vhereas, the stock-option revenue should have been viewed as "one-time" revenue and
not spent on ongoing liabilities; and
Whereas, when the "dot-com bubble" burst, rev'enues went into steep decline and
created what is known today as "the structural imbalance"; and
Whereas, even with billions of dollars of cuts to State and local programs to cope with
the State's $38 billion deficit last year, the State budget faces another major shortfall in 2004-
05: and
Whereas, Governor Schwarzenegger has developed an Economic Recovery Work-Out
plan for the State Budget: and
Whereas, the recovery plan consists of the following: an Economic Recovery Bond Act
to refinance a portion of the inherited debt. a proposed budget that moves toward structural
balance, and a constitutional amendment to require balanced budgets with a prudent reserve;
and
Whereas, these measures are embodied in Propositions 57 and 58 as they appear on the
March 2. 2004 state-wide ballot; and
Whereas, The City of San Bernardino should continue to oppose any raid on local
government revenues but also support the propositions put forward by the Governor to set
California on a path to economic recovery,
NOW, THEREFORE, BE IT RESOLVED, that the Mayor and Common Council of
the City of San Bernardino hereby supports the passage of Propositions 57 and 58 and
encourages all citizens to support them as well.
BE IT FURTHER RESOLVED that this resolution be noted in the minutes of this
Council and that a copy by forwarded to Governor Schwarzenegger, the Speaker of the
Assembly, the President Pro-Tern of the State Senate, the San Bernardino County Board of
Supervisors, and the League of California Cities,
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RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SA~
BERNARDINO IN SUPPORT OF PROPOSITION 57, THE ECONOMIC RECOVERY
BOND ACT, AND PROPOSITION 58, THE BALA~CED BUDGET ACT.
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor
and Common Council of the City of San Bernardino at a
meeting thereof held on
day of
. 2004, by the following vote. to wit:
the
Council Members:
AYES
NAYS
ABSTAIN
ABSE~T
ESTRADA
LONGVILLE
MC GINNIS
DERRY
SUAREZ
ANDERSON
MCCAMMACK
Rachel Clark, City Clerk
,2004.
The foregoing resolution is hereby approved this day of
Judith Valles, Mayor
City of San Bernardino
Approved as to
Form and legal content:
JAMES F. PENMAN.
City ttorney
By: