HomeMy WebLinkAbout5.1 Gas Tax Monies~~~~ \
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CITY CLERK
File # ^~Q 0^- $^^
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AGENDA STATEMENT
CITY COUNCIL MEETING DATE: June 23, 2009
SUBJECT: Proposed Resolution Opposing State "Takeaway" of Gas Tax
Monies Received by City from Highway Users Tax Account
(HUTA)
Report Prepared by: John Bakker, City Attorney, and Melissa
Morton, Public Works Director
ATTACHMENTS: Resolution Objecting to Seizure by the State of California of
Highway Users Tax Account Funds Allocable to the City of Dublin
and Authorizing the City Attorney to Monitor Potential Litigation to
Challenge Any Such Seizure
RECOMMENDATION: Receive the Report and Adopt the Resolution Objecting to Seizure
by the State of California of Highway Users Tax Account Funds
Allocable to the City of Dublin.
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FINANCIAL STATEMENT: The League of California Cities estimates that the City of Dublin
will receive $769,888 from the Highway Users Tax Account
(HUTA) in Fiscal Year (FY) 2009-2010. Legislation under
discussion could result in a loss of all of these monies and 75% of
the monies for FY 2010-2011.
DESCRIPTION: Each year, the City receives monies from the Highway Users Tax
Account (HUTA), which are derived from the state gas tax. The City is required to use these monies for
planning, construction, improvement, maintenance and operation of roads and streets. The City received
$767,737 in Fiscal Year 2008-2009.
The League of California Cities (LOCO) has informed Staff that the Governor's May budget revision
proposes to take $1 billion from the HUTA monies that are otherwise allocated to cities and counties in
order to make debt service payments for highway projects. The Governor's proposal was endorsed by the
Joint Budget Conference Committee. Staff is unable to provide any more specific information as there is
COPY TO: League of California Cities
Page 1 of 2
G:\TRANSPORTATION~F'unding\agst HUTA State Takeaway.DOC
ITEM NO. ~''
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not a proposed bill at this time. The LOCC indicates, however, that the legislation would take all of the
City's 2009-2010 allocation ($769,888) and 75% of what the City would receive in FY 2010-2011.
The City of Dublin uses gas tax monies each year to operate and maintain traffic signals, conduct street
maintenance and pay for a portion of the City's traffic engineer. In addition, gas tax monies are often used
as a local share to match State or Federal Grant monies. Currently, the City has been able to attain a rating
of 82 for its Pavement Maintenance Index (PMI.) Should the gas tax monies be raided by the State of
California, however, the City's current reserves would be used for basic services like traffic signal
maintenance, emergency street repair and the needed local share of the corridor projects. Pavement
Management Programs like overlay and slurry seal would have to be suspended. Consequently, some
streets scheduled for slurry seal may slip below maintainable levels and require more extensive repair,
costing up to five times more than the slurry seal would have cost.
The proposed resolution would indicate that the City of Dublin opposes legislation that would take HUTA
monies away from cities. It would also authorize the City Attorney to monitor potential litigation to
challenge any such legislation, if it passes. The LOCC has requested that cities authorize their city
attorneys to work with the LOCC and other cities on potential litigation; the proposed resolution merely
authorizes the City Attorney to monitor such activities at this time.
RECOMMENDATION: Receive the Report and adopt the Resolution Objecting to Seizure by
the State of California of Highway Users Tax Account Funds Allocable to the City of Dublin.
Page 2 of 2
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RESOLUTION NO. - 09
A RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF DUBLIN
RESOLUTION OBJECTING TO SEIZURE BY THE STATE OF
CALIFORNIA OF HIGHWAY USERS TAX ACCOUNT FUNDS
ALLOCABLE TO THE CITY OF DUBLIN AND AUTHORIZING
THE CITY ATTORNEY TO MONITOR POTENTIAL LITIGATION
TO CHALLENGE ANY SUCH SEIZURE
WHEREAS, the current economic crisis has placed cities under incredible financial pressure
and caused many cities to make painful budget 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 (State) has seized over $10
billion of city property tax revenues statewide, now amounting to over $900 million each year, to fund the
State budget even after deducting public safety program payments to cities by the state; and
WHEREAS, in his proposed Fiscal Year (FY) 2009-2010 budget, the Governor has proposed
transferring $1 billion of local gas taxes and weight fees to the State general fund to balance the State
budget, and over $700 million in local gas taxes permanently in future years, immediately jeopardizing the
ability of the City of Dublin to maintain the City's streets, bridges, traffic signals, streetlights, sidewalks
and related traffic safety facilities for the use of the motoring public; and
WHEREAS, the City of Dublin has received an average of $772,900 from the Highway Users Tax
Account (which consists of gas tax monies) over the last five fiscal years; and
WHEREAS, the loss of almost all of the City's gas tax funds will compromise the City's ability
to perform critical traffic safety related street maintenance, including, but not limited to, patching,
resurfacing, street lighting/traffic signal maintenance, payment of electricity costs for street lights and
signals, bridge maintenance and repair, and sidewalk and curb ramp maintenance and repair; and
WHEREAS, in both Proposition 5 in 1974 and Proposition 2 in 1998 the voters of the State
imposed restriction on the State's ability to reallocate gas tax monies from the Highway Users Tax
Account, and any effort to permanently divert the local share of the gas tax would violate the will of the
voters; and
WHEREAS, cities and counties maintain 81 % of the State road network while the State directly
maintains just 8%; and
WHEREAS, ongoing street maintenance is a significant public safety concern; and
WHEREAS, according to a recent Statewide needs assessment (California Statewide Local
Streets and Roads Needs Assessment, Nichols Consulting Engineers, Chtd. 2008), sponsored by the
League of California Cities, California State Association of Counties and County Engineers Association
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of California), on a scale of zero (failed) to 100 (excellent), the Statewide average pavement condition
index (PCI) is 68, or "at risk," and local streets and roads will fall to "poor" condition (Score of 48) by the
Year 2033 based on existing funding levels available to cities and counties;
NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Dublin does
hereby express its willingness to cooperate with the League of California Cities, other cities and counties
in opposing legislation that diverts the City's share of funding from the Highway Users Tax Account
(HUTA), also known as the "gas tax," to the State general fund.
BE IT FURTHER RESOLVED that the City Council authorizes the City Attorney to monitor
possible litigation to challenge such legislation and to keep the City Council informed regarding such
litigation.
BE IT FURTHER RESOLVED that the City Clerk shall send this Resolution with an
accompanying letter from the Mayor to the Governor and each legislator, informing them of the City's
resolve to oppose any effort to frustrate the will of the electorate as expressed in Proposition 5 (1974) and
Proposition 8 (1998) concerning the proper use and allocation of the gas tax.
BE IT FURTHER RESOLVED that a copy of this Resolution shall be sent by the City Clerk to
the League of California Cities, the Dublin Chamber of Commerce, and other community groups whose
members are affected by this proposal to affect conditions on the streets of the City for pedestrians,
bicyclists and motorists.
PASSED, APPROVED AND ADOPTED this 23rd day of June, 2009, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAINING:
ATTEST:
Mayor
City Clerk