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Home My WebLink AboutS4-City Administrator CITY OF SAN BERNARDINO -REQUEST FOR COUNCIL ACTION From: Fred Wilson, City Administrator ~.< Subject: Resolution of the Mayor and Common Council urging the California Legislature to reject the Governor's proposed shift of local Vehicle License Fee (VLF) revenues and to honor the 1998 commitment to restore the VLF. Dept: City Administrator's Office Date: January 17, 2003 ... MCC Date: 1/21/03 Synopsis of Previous Council Action: None. Recommended Motion: Adopt Resolution. Contact person: Fred Wilson, City Administrator Phone: 5122 Supporting data attached: Staff Report and Resolution Ward(s): FUNDING REQUIREMENTS: Amount: None Source: (Acct. No.) N/A Acct. Description: N/A Finance: Council Notes: Agenda Item No. lS4 1/~IIC23 CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION Staff Report Subiect: Resolution of the Mayor and Common Council of the City of San Bernardino urging the California Legislature to reject the Governor's proposed shift of local Vehicle License Fee (VLF) revenue and to honor the 1998 commitment to restore the VL V . Back!!found: In 1998, during a period of strong economic growth at the state level, the California State Legislature approved the use of a portion of the state General Fund to reduce the VLF payments of vehicle owners. The state paid to local governments a "VLF backfill" in lieu of the reduced VLF payment. According to the League of California Cities, the 1998 Legislation and subsequent enactments contain clear provisions that in the event that insufficient funds are available to be transferred from the General Fund to fully fund the offsets and backfill amount that the VLF offset shall be reduced and VLF payments increased. On January 10, 2003, Governor Davis recommended the shift of over $4 billion in VLF backfill funds away from cities and counties over the next 18 months to fund other priorities. For San Bernardino, the VLF loss for FY 200212003 is $3,548,547. For FY 200312004, the estimated VLF loss is $7,662,791. The League of California Cities has contacted cities and urged them to protect this critical funding source (see Attachment "A"). Financial Impact: None Recommendation: Adopt Resolution. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO URGING THE CALIFORNIA LEGISLATURE TO REJECT THE GOVERNOR'S PROPOSED SHIFT OF LOCAL VEHICLE LICENSE FEE (VLF) REVENUES AND TO HONOR THE 1998 COMMITMENT TO RESTORE THE VLF. Whereas, prior to 1935, cities and counties collected property taxes on motor vehicles to fund essential local public health and safety issues; and Whereas, in 1935, the Legislature first enacted the Vehicle License Fee (VLF) Act, replacing the property tax on vehicles with a 1.75 percent fee charged against the value of the motor vchicle; and Whereas, in 1948, the rate of the VLF was increased to 2 percent of the value of the vehicle; and Whereas, in 1986, the voters voted overwhelmingly to constitutionally dedicate the proceeds of the VLF to fund city and county services; and Whereas, in 1998, a period of strong economic growth, the Legislature approved the use of a portion of the rapidly growing state General Fund to reduce the VLF payments of vehicle owners. This amount, known as the "offset", grew in future years to 67.5 percent offset against the amount owed. The amount paid to local governments in lieu of the reduced VLF payment is knows as the "VLF backfill"; and Whereas, the 1998 legislation and subsequent enactments contain clear provisions that when insuf1icient funds are available to be transferred from the General Fund to fully fund the offsets and backfill amount that the VLF olTset shall be reduced and VLF payments increased; and Whereas, VLF and backfill revenues constitute 12 percent of the city's general purpose revenues. More than 65% of the City's general fund budget is committed to Police and Fire; and Whereas, revenues derived from the VLF and backfill are of critical importance in funding vital local public health and safety services; and Whereas, any failure by the Legislature to maintain the VLF backfill or restore the VLF will cause widespread disruption in local government services essential to the well-being of California citizens and their cities and counties; and Whereas, Governor Davis' proposal to divert $4 billion in local VLF backfill payments over the next seventeenl1lonths fails to honor the 1998 commitment, and is a direct assault on local services that will be felt by every California resident; and 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO URGING THE CALIFORNIA LEGISLATURE TO REJECT THE GOVERNOR'S PROPOSED SHIFT OF LOCAL VEHICLE LICENSE FEE (VLF) REVENUES AND TO HONOR THE 1998 COMMITMENT TO RESTORE THE VLF. Whereas, shifting $4.2 billion in locally controlled revenues for local services is neither equitable nor fair. No state program or department has been asked to shoulder such a disproportionate share of the budget pain. These cuts come on top of the nearly $5 billion each year that is transferred from local services to fund state obligations. NOW, THEREFORE, BE IT RESOLVED, that the Mayor and Common Council of the City of San Bernardino, that if the state General Fund can no longer afford the expense of all or part of the VLF "backfill" that the Legislature and Governor of California are hereby respectfully urged to implement the provisions of the current law providing for the reduction of the VLF ofTset in bad economic times and to restore the VLF in an amount necessary to reduce the VLF backfill: and RESOL VED FURTHER, that the City of San Bernardino hereby expresses its profound appreciation to the legislators who support such VLF restoration legislation. III III III III III III III III III III III III III 1 2 3 4 5 6 7 RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO URGING THE CALIFORNIA LEGISLATURE TO REJECT THE GOVERNOR'S PROPOSED SHIFT OF LOCAL VEHICLE LICENSE FEE (VLF) REVENUES AND TO HONOR THE 1998 COMMITMENT TO RESTORE THE VLF. 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 the , 2003 by the following vote, to wit: day 0 f 8 Council Members: AYES ABSTAIN ABSENT NAYS 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ESTRADA LONGVILLE MC GlNNlS DERRY SUAREZ ANDERSON MCCAMMACK City Clerk ,2003 day of The foregoing resolution is hereby approved this Judith Valles, Mayor City of San Bernardino Approved as to Form and legal content: JAMES F. PENMAN, City Attorney By: Jiln 15 ZeO] 19:54;0(, Via Fax -> o Fred Ioli IsDn Poge 00 1 []f OO? \ . I( ff((/!erlJ(~;U! A- League of California Cities 140CK Slr~, iOuilE- 400. Slalmmtc, Clhfcmia 95814 Phon~: (d161 658-8200 Fu: (!;i18l 6Sa.S240 1'I"lv.,.",,;:\:j~.~g URGENT n PLEASE DELIVER IMMEDIATELY LEGISLATIVE ACTION!!! Pag..lof7 January 15,2002 TO, "byors, Council "lembers, City Managers and Other City' Officials FRO:'>l: Eucutive Committee, League Board of Directors John Ru"o, PresIdent and City Attorney, Oakland Ron Loveridge, FlfSt Vice President and Mayor, Rlve>.,ide Pat Eklund, Second Vtee PreSident and Mayor Pro Tern, Novllto Bendy O':\"eill, Past Plesident md Mayor, Long Beach Chns ~kKenzle, ExeclIllve Director Subject: Lettn, and Resolutions Needed to Support Restoration of VLF ACTION REQl'ESTED Act no'" to protect VLF funding by sending letters, resolutiOns and emllils .Ild phoOlng Assembly Members to support pamal restoratIon of the VLF , to c.fhet dle reduction In 'the \'LF backfill proposed by Governor Davl~ Thmgs l.re 1!loving qUlCkly here m Sacnunento. As you know, las.t Friday the Govelnor ,ccc:mm-nded the ,111ft of over '54 bIllion in VLF bllckfill funds aWIlY I!'om citIes and 20UnLte, O~'f:r the flE-xt IS month" to t1.md other priorities. Yestuday we sent you a packet of mforn-ntlon on proposed budge-t cuts, aud asked you to carry out a serie': of near- and 1.cng-tC':nTI ac:'10n'i relating to loca.l government impacts in the Gc\..emor's budge.t proposaL Toda~. "'(l have a n('lV and more urgent mission that. rean:r supersedes OUI. Inemo of JanuaQ'14, Yesterday afternoon Speaker Herb Wesson announced thllthe plans to move ";>\nftl'y ~o ,mtroduce legislation to allo\'v for restoration of the VLF funding for cities and :cuntle, He saId, "We're prepared to clan!\ the law 10 operate as mlended -. and restore the VLF to Its nonnal level" Tht Spe:1ker has speCIfically asked that ctlies and counties take action to suppon thiS dfot1 After conferring today by conference call with the League, board of directors, we tie \-\ r~\mg to ask that your tity us(' whate\'er inkrnal processes you have In place to "uti"""", the immediate transmittal of a lette)' to y'our l..gislators urging them to keep thE promise l"l;islatol's made to local governm..nt in 1998, and vote to restore the Jo'p 15 ZBIlJ l'l:!>4:Z9 Via FdX ~> B Fred Ui IsDn PAge II!lZ Of 007 YLF. \\" further ask that you act Immediately to adopt a resolution urgmg the legidature te (eJect the G'Jvemors budget proposal to eliminate the VLF backfill, and mstead to vote tr;..l henor the 1998 comtnitment to restore the \iLF~ and tha.t you transmit that resolutlOn to your legIslators Caples of" sample lener, draft resolution and specific talkmg pomts are attached You can aLa ",-('es'; lhe.. materials onlme by visiting the League's Ad'.'ocacy Center at !~'~:0.~:~'~t~~.;...CEl'.Llti\~S_~c"y"c_pntf'r. Pl~a.se be: sure to send us copies of any letters or reSclutlOn> VO'e send to leglSl.,tor3 They should be addressed to Jean Korinke, League Lobb, :st, 1400 K Street. Sacramento, CA 95814. email: 1hDLI!1!>~@~C~ttleS~.!I&; fax 016 6SS 3240, (Please be adyiseo that, because of the urgency of generating this VISIble "'1'1'011 fer ,""tolation of the VLF., we are removrng from our webslte Advocacy Center the m.'lenals Y.e posted there yesterday relatmg to the VLF and cuts to redevelopment cc;etl'-I.S \'.e \ullupda" and repost matenals relating to other budget Impacts in the near Llture " The L"g',le WIll also work through the LOCAL coahlron (L"ave Our CommlIDlty Assets !_.:~C~l1') T'J enCQ1Jrage similar actions by our coa.lition partners among countie~.;. speclal drstnd::;, UnIons, charnbers of commerce, ~enlOrs' groups and other crganizatlons that lJJld~T31and the lmportance of pres('.f\.ing local serVlces \V e btlrtw 'l,at a yote on restoring the VLF w.lllikely come in the next two weeks Our ~~11ll'i't '0 '''ppoI1 th" legISlation (we have no bill number yet) could mean the end of VLF hackf~ll r1aytnent2. tC' cities of ovrr $1 bIllion each year This could vel')" wt'll be our one and onlj cltallce to get this issue off the budget table, and we need to ad now. "lie ""ge YOll to COli tad your legislators immediately to ask for theil' vote in favor of the partial VLF restoration, and to follow up with a letter and resolution as quickly as possible. A;u:.cl;nh7iJ1.l VLF Re:,tolation Re~olution Draft Leg:slative Letter VLF Resto,ation Talkmg POlllIS 2 J~n 1~ 2083 19:55:52 Via Fax -} B Fred Wi Iscn Page 007 Of BB7 Talking Points Concerning Restoring the VLF January 15, 2003 It's time to end the VLF holiday. . VVnen the VLF offset was authorized in the 1990's, legislators trorn both paliies agreed to language specifically providing that the fee would return to higl,er levels whenever "Insufficient moneys are available" in the General Fund. Certainly, that day rlaS anwed. . Increasing the VLF is consistent with existing law and the right thing to do to protect cfltlcallocal services Promises made should be promises kept. . ,IJ., deal IS a deal - and restorrng the VLF when "insufficient moneys are available" was the deal on which allleg.slators agreed -- Senate and Assembly, Republicans and Denl:JCfats. . The (.lovernor and legislature should do troe right thing and keep thell' commitments, by acting now to restore the VLF. The VlF is deductible against federal tax obligations. llio one i:k,!', to pay taxes - but at least consumers can deduct the VLF against their federal taxes Local public services are at risk. The VL F 15 a critical component of funding vifallocal services. VLF payments constitute ]s much as 25% of local governments general-purpose revenues On average, more than eo.,1o of crty general fund spendrng and more than half of county general funds go to polrce, t"e emergency medIcal and heal1h care programs. The exact amount of the deficit is not the issue. The issue is the vulnerability of critical local services. Dls3gl~ements over the sIze of the state defiCit simply underscore our key issue local service,; are vulnerable, and \VIii remain so unless and unlll the state keeps its promise :0 fully fund the Ve'licle license Fees Keep the promise. End the vulnerability of local services. Vote to restore the VLF. 7