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R 4184RESOLUTION NO. 4184 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE OPPOSING PROPOSALS BY THE STATE TO BORROW AND/OR TAKE ADDITIONAL LOCAL FUNDING POTENTIALLY RESULTING IN THE NEED TO DECLARE A LOCAL FISCAL HARDSHIP FOR THE CITY WHEREAS, the Governor's office has informed local government representatives of a proposal under consideration by the State of California to borrow local property tax revenues to address State budget deficits if voters do not approve Propositions 1A through 1 E at the May 19, 2009 Statewide Special Election; and WHEREAS, voters of California approved Proposition 1A in 2004 by an 84% margin, which sent a clear message to the Governor and State Legislature to stop the irresponsible, damaging and unfair practice of taking local government funds to finance the State budget; and WHEREAS, Proposition 1A prohibits the State Legislature from reducing the share of property tax revenues going to the cities, county and special districts in any county and shifting those revenues to the schools or any other non-local government function, but allows borrowing of not more than 8% of the total amount of ad-valorem property tax revenues for a three year period; and WHEREAS, the State Department of Finance has estimated this amount to equal $2.006 billion; and WHEREAS, it would be irresponsible to "borrow" such funds because it would deepen the State's structural deficit and cripple local government and transportation services, a position previously expressed by the Governor; and WHEREAS, as a result of the current economic recession the City Council of the City of Arroyo Grande has recently approved preliminary budget strategies to address a projected budget shortfall of nearly $2,000,000, that significantly impact the City's ability to provide public safety, infrastructure maintenance and other critical services to the community; and WHEREAS, any further diversion of property, sales other local government tax revenues underthe Proposition 1A loan provisions will further impactthe ability of the City, as well as other local agencies throughout California, to fund Police, Fire and other critical services, and therefore will significantly impact the health, safety and welfare of our citizens ;and RESOLUTION NO. 4184 PAGE 2 WHEREAS, any such further diversion of local tax revenues has the potential to cause the City of Arroyo Grande and other cities and local agencies throughout California to face unprecedented levels of fiscal hardship and possibly even insolvency; and WHEREAS, this condition has been brought about by the amount of budget reductions that the City and other local agencies have previously experienced as a result of prior unfunded State mandates and revenue diversions imposed by the Governor and Legislature, as well as the current economic downturn. NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Arroyo Grande hereby opposes any and all efforts by State government to "borrow" or seize local tax funds to finance State operations. Such a move would be fiscally irresponsible for the State, would threaten to create a state of local fiscal hardship for cities and other agencies throughout California, and would strongly impact the ability to provide adequate public safety, infrastructure maintenance, and other critical local services. On motion of Council Member Costello, seconded by Council Member Guthrie, and on the following roll call vote, to wit: AYES: Council Members Costello, Guthrie, Fellows, and Mayor Ferrara NOES: None ABSENT: Council Member Arnold the foregoing Resolution was passed and adopted this 12`h day of May 2009. RESOLUTION NO. ~{~8y PAGE 3 TONY FER ,MAYOR ATTEST: KELLY WE MO ,CITY CLERK APPROVED AS TO CONTENT: ~~ ST~AMS, CITY MANAGER APPROVED AS TO FORM: l /~-- ~ ~. TIMO HY J. C L, CITY ATTORNEY OFFICIAL CERTIFICATION I, KELLY WETMORE, City Clerk of the City of Arroyo Grande, County of San Luis Obispo, State of California, do hereby certify under penalty of perjury, that the attached Resolution No. 4184 is a true, full, and correct copy of said Resolution passed and adopted at a Regular meeting of the City Council of the City of Arroyo Grande on the 12~h day of May 2009. WITNESS my hand and the Seal of the City of Arroyo Grande affixed this 13t" day of May 2009. KELLY WETN}ORE, CITY CLERK