Resolution 2009-30
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RESOLUTION NO. 2009-30
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GILROY FINDING A
SEVERE FISCAL HARDSmp WILL EXIST IF ADDITIONAL CITY PROPERTY TAX
FUNDS ARE SEIZED AND ADDITIONAL UNFUNDED MANDATES ARE ADOPTED
BY THE STATE OF CALIFORNIA
WHEREAS, the current economic crisis has placed cities under incredible financial
pressure and caused city officials to reopen already adopted budgets to make painful cuts,
including layoffs and furloughs of city workers, decreasing maintenance and operations of public
facilities, and reductions in direct services to keep spending in line with declining revenues; and
WHEREAS, since the early 1990s the state government of California has seized over
$8.6 billion of city property tax revenues statewide to fund the state budget even after deducting
public safety program payments to cities by the state; and
WHEREAS, in FY 2007-08 alone the state seized $895 million in city property taxes
statewide to fund the state budget after deducting public safety program payments and an
additional $350 million in local redevelopment funds were seized in FY 2008-09; and
WHEREAS, the most significant impact of taking local property taxes has been to
reduce the quality of public safety services cities can provide since public safety comprises the
largest part of any city's general fund budget; and
WHEREAS, in 2004 the voters by an 84% vote margin adopted substantial
constitutional protections for local revenues, but the legislature can still "borrow" local property
taxes to fund the state budget; and
WHEREAS, on May 5 the Department of Finance announced it had proposed to the
Governor that the state "borrow" over $2 billion in local property taxes from cities, counties and
special districts to balance the state budget, causing deeper cuts in local public safety and other
vital services; and
WHEREAS, in the past the Governor has called such "borrowing" proposals fiscally
irresponsible because the state will find it virtually impossible to repay and it would only deepen
the state's structural deficit, preventing the state from balancing its budget; and
WHEREAS, the Legislature is currently considering hundreds of bills, many of which
would impose new costs on local governments that can neither be afforded nor sustained in this
economic climate; and
WHEREAS, state agencies are imposing, or considering, many regulations imposing
unfunded mandates on local governments without regard to how local agencies will be able
comply with these mandates while meeting their other responsibilities; and
RESOLUTION NO. 2009-30
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WHEREAS, the combined effects of the seizure of the City's property taxes, increasing
unfunded state mandates, and the revenue losses due to the economic downturn have placed the
city's budget under serious fiscal pressure; and
WHEREAS, our city simply cannot sustain the loss of any more property tax funds or to
be saddled with any more state mandates as they will only deepen the financial challenge facing
our city; and
WHEREAS, a number ofthe City's financial commitments arise from contracts,
including a long term capital lease and debt obligation which supports securities in the public
capital markets, that the City must honor in full unless modified by mutual agreement of the
parties.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Gilroy
has determined that the City will experience a severe fiscal hardship if the recommendation of
the Department of Finance to "borrow" $2 billion of local property taxes is supported by the
Governor and the Legislature; and
FURTHER RESOLVED, that the City Council strongly and unconditionally opposes
the May 5 proposal of the Department of Finance and any other state government proposals to
borrow or seize any additional local funds, including the property tax, redevelopment tax
increment, and the city's share ofthe Prop. 42 transportation sales tax; and
FURTHER RESOLVED, that the City Council strongly urges the state legislature and
Governor to suspend the enactment of any new mandates on local governments until such time
as the economy has recovered and urges the state to provide complete funding for all existing
and any new mandates, and
FURTHER RESOLVED, that the City Clerk shall send copies of this resolution to the
Governor, our state senator(s), our state assembly member(s) and the League of California Cities.
PASSED AND ADOPTED this 20th day of July 2009 by the following vote:
NOES:
ABSENT:
COUNCILMEMBERS: ARELLANO, BRACCO, DILLON,
GARTMAN, TUCKER, WOODWARD and
PINHEIRO
COUNCILMEMBERS: NONE
COUNCILMEMBERS: NONE
AYES:
RESOLUTION NO. 2009-30
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APPROVED:
RESOLUTION NO. 2009-30
I, SHA WNA FREELS, City Clerk of the City of Gilroy, do hereby certify that the
attached Resolution No. 2009-30 is an original resolution, or true and correct copy of a city
resolution, duly adopted by the Council of the City of Gilroy at a regular meeting of said Council
held on the 20th day of July, 2009, at which meeting a quorum was present.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Official Seal of
the City of Gilroy this 21 5t day of July, 2009.
(Seal)