July 10, 2009
Issue #26-2009
IN THIS ISSUE:
Page 4: DOE Announces Up to $10.5 Million in Solar Energy Education for Local Governments
Page 5: Department of Labor Announces New Federal Stimulus Job Training Program
LOCAL GOVERNMENT OFFICIALS WILL GATHER NEXT WEEK TO TACKLE
REBUILDING CALIFORNIA FROM THE GROUND UP
Summit July 17-18, Sacramento
With California in the midst of a severe budget crisis that has magnified the current system’s
weaknesses, hundreds of local government leaders are coming to Sacramento July 17-18 to
explore state governance and fiscal reform. These almost 400 leaders represent California’s
7,930 elected city, county and school officials who are committed to reinvigorating California’s
system of governance to restore efficiency, transparency and accountability.
For more, see Page 2.
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ASSEMBLY MEMBER MENDOZA OPTS OUT OF VOTE ON MUNICIPAL
BANKRUPTCY BILL
Assembly Member Tony Mendoza (D-Artesia) announced to the Senate Local Government
Committee on Wednesday, July 8, that he would not take his bill, AB 155, up for a vote. However,
Assembly Member Mendoza told the committee that he still wanted to go ahead with a hearing on
the bill and take testimony from proponents and opponents. This means that AB 155 did not pass
the committee and remains under the jurisdiction of the committee until further notice. No further
Senate Local Government Committee meetings are currently scheduled for the remainder of the
year. For more, see Page 3.
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CALIFORNIA COMMUNITIES ESTABLISHES STATEWIDE TAXABLE AMERICAN
RECOVERY BOND POOL PROGRAM
In response to the American Recovery and Reinvestment Act (ARRA), California Communities
has launched the Statewide Taxable American Recovery (STAR) bond pool program. STAR is a
financing program that is designed to maximize the financial benefits of the taxable markets for
California cities and counties issuing financings authorized by ARRA. For more, see Page 4. 2
‘Summit’ Continued from Page 1…
Local government is closest to the people and that is why Rebuilding California – From the
Ground Up begins with local governments. Delegates participating in this two-day summit will be
examining solutions as well as the topics with the greatest impact on the state-local relationship.
The historic event will be the first time leaders from the three local government arenas are
gathering to address the state’s chronic dysfunction.
The summit will be hosted by the Cities Counties School Partnership, a joint effort of the League
of California Cities, California State Association of Counties and California School Board
Association. City, county and school leaders are convening the summit because local
government is the closest level of government to the people. Reforms must include restoring a
greater degree of local control over programs, taxation and spending decisions.
One example of the dysfunction of state government is that the state has taken upwards of $10
billion in city property taxes to help meet state budget obligations to schools since 1991, yet state
spending on schools is among the lowest if not the lowest in the nation. With the current
economic downturn, the state government is facing its day of reckoning, and the results are
deeply troubling. The summit will provide a forum for hundreds of city, county and school leaders
to discuss reforms to address these pressing problems and the way in which they can be
implemented.
Delegates will focus on a range of issues such as a constitutional convention, bonds and taxes,
state borrowing and mandates, personnel issues and creating greater transparency and
accountability to the voters.
Speakers will discuss ideas on how to modernize the state budget process as well as sales and
property tax systems and requiring periodic reviews of the State’s governance.
Scheduled speakers include:
• Rich Gordon, CCS Partnership Chair, CSAC immediate past president, San Mateo county
supervisor
• Fred Silva, California Forward senior policy consultant
• Paula Campbell, CSBA president
• James Mayer, California Forward executive director
• James Wunderman, Bay Area Council executive director
• Bill Leonard, Board of Equalization member
• Dede Alpert, former state senator (invited)
• Judith Mitchell, League president
• Chris McKenzie, League executive director
• An expert in statewide survey research from Fairbank, Maslin, Maullin and Associates
• Paul McIntosh, CSAC executive director
• Scott Plotkin, SCBA executive director
• Gary Wyatt, CSAC president
• Jim Madaffer, League immediate past president
Resources
The League has posted a number of resource documents for the summit on our Web site at
www.cacities.org/2009summit.
• Joint Principles (draft)
• Talking Points
• FAQs
• Agenda
Additional information about the summit can be found on the CCS Partnership Web site at
www.ccspartnership.org.
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Rebuilding California Social Media
Social media will be a major component of the summit and participants will be able to “tweet”
questions to moderators using the Summit’s Twitter page. Just sign up for a Twitter account at
www.twitter.com, request to follow RebuildingCA (http://twitter.com/RebuildingCA) and your
request will be approved by a moderator. City, county and school board officials who are unable
to attend can still follow the proceedings by following the same steps.
Rebuilding California also has a Facebook page. City officials are encouraged to become a fan of
this page by searching for RebuildingCA in the search function on Facebook.
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‘AB155’ Continued from Page 1…
AB 155 would require local agencies contemplating bankruptcy to first obtain approval from the
California Debt and Investment Advisory Commission (CDIAC) prior to filing for bankruptcy. The
bill would also authorize CDIAC to charge local governments a fee to cover the costs associated
with rendering a decision as to whether a municipality would be granted the ability to file for
bankruptcy.
On Tuesday, Dan Walters, in his Sacramento Bee column, called the bill yet another not-so-
transparent attempt “to expand public employee union power.” Labor groups have made AB 155
one of their priorities this year, and the League has made defeating this bill one of its major
priorities.
Although not mentioned by Assembly Member Mendoza, the bill was not taken up for a vote was
because there were insufficient votes in the committee to pass it. Sen. Lois Wolk (D-Davis) and
Sen. Dave Cox (R-Fair Oaks) both stated they would have voted “no” on the bill if it had been
taken up for a vote. Senators Wolk and Cox deserve a big word of “thanks” from California city
officials.
Most of the public employee organizations in Sacramento testified in favor of the bill while a long
line of public sector representatives urged the committee to defeat the legislation including Vallejo
Mayor Osby Davis and Marc Levinson, Vallejo’s bankruptcy attorney in the case.
Mayor Davis discussed the process in Vallejo that led to the city filing for bankruptcy protection
under Chapter 9 of the federal bankruptcy code. He emphasized to the committee that in spite of
making the difficult and unpopular choice to finally go into bankruptcy, the process between the
city and employee unions has been one of continued negotiation and joint problem solving to
address Vallejo’s underlying financial problems.
In response to questions from committee members, Levinson, pointed out that bankruptcy judges
are independent, not subject to political pressures, are uniquely knowledgeable about financial
issues and are in the best position to independently determine the financial viability of a
municipality. He also pointed out the rigorous fiscal analysis done in any bankruptcy proceeding
is something that simply couldn’t be accomplished by a state commission assigned this new
responsibility.
Sen. Cox commented that the bill would only create an impediment to bankruptcy proceedings
and that we [the legislature] “ought not to put it into place.” Sen. Cox also stated that he believed
the current federal bankruptcy process was working well.
The League opposes AB 155 because the bill is an unnecessary intrusion into what is
fundamentally a local government’s fiscal decision. Cities don’t take bankruptcy lightly; in fact it’s
often a decision of last resort.
As with any action of the legislature, the events of Wednesday can be undone by simply
amending AB 155 into another vehicle through a process known as “gutting and amending.” The
League will certainly be on the lookout for an action of that nature between now and the end of
the session.
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The success of any attempt to place the contents of AB 155 into another piece of legislation will
heavily depend on the leadership of the Senate or the Assembly. It is our opinion that the
Legislature and its leadership should be focused on finding ways to balance its own budget
instead of inserting itself into local government fiscal matters for purely political reasons. Local
governments and the public employee unions behind AB 155 would be better served with a
guarantee that local revenues are safe from seizure by the state.
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‘STAR’ Continued from Page 1…
Utilizing a “pooled” approach, through STAR California Communities will issue taxable Build
America Bonds (BABs) and Recovery Zone Economic Development Bonds (RZEDs). These new
financing tools provide extremely cost effective financing for new economic development projects
in your area.
If your city received bond issuance allocations for RZED and RZF bonds or is thinking of selling a
BAB issuance, it is important to contact California Communities. The STAR program is designed
to provide the lowest overall borrowing costs through:
• improved taxable bond market access;
• lower costs of issuance; and
• a financing team expert in taxable/tax-exempt hybrid structures.
Your city can work with your bond counsel and financial advisor to help structure your STAR bond
debt offering to help with the structuring of your community’s local obligations components of
financing. California Communities has approved the team of Orrick Herrington & Sutcliffe as bond
counsel and Piper Jaffray as the STAR Bond underwriter.
For more information, please contact James Hamill at (925) 933-9229 ext. 216 or Terrence
Murphy at (925) 933-9229 ext. 223 at California Communities or visit the California Communities
Web site at www.cacommunities.org.
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DOE Announces Up to $10.5 Million in Solar Energy Education for Local
Governments
The U.S. Department of Energy (DOE) this week announced a funding opportunity for up to $10.5
million to increase the ability of local governments to accelerate solar energy adoption and
workforce development. Funding for the five-year award is subject to annual appropriations. DOE
will provide local governments across the U.S. with useful, timely information on increasing solar
energy use with this new funding opportunity.
Through the Solar America Cities program, a partnership effort with 25 large U.S. cities, DOE has
developed guides, case studies, and tool kits to assist local governments in promoting solar
energy. Under this new effort, DOE will partner with outreach organizations to get these tools into
the hands of local government officials and stakeholders.
DOE has encouraged local governments to take a comprehensive approach to solar energy
adoption, one that includes workforce development and green jobs training, economic
development through support for a local solar industry, and financial incentive programs that help
citizens make investments in solar energy. By facilitating peer-to-peer information sharing, DOE
will empower local governments to integrate solar energy into their communities.
Applications are due by Oct. 15, and DOE anticipates announcing selections no later than Dec.
15.
For information, see the Solar Energy Technologies Program Financial Opportunities Web page
at www.solar.energy.gov/financial_opportunities.html. Applications must be submitted through
FedConnect at www.fedconnect.net.
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About Solar America Cities
DOE's Solar America Cities (www.solaramericacities.energy.gov) partnership supports 25 cities
committed to making solar a mainstream energy source. DOE provides financial and technical
assistance to support the cities’ innovative efforts to accelerate the adoption of solar energy
technologies.
The Solar America Cities program has engaged more than 180 organizations, including
municipal, county, and state agencies, solar companies, universities, utilities, and non-profit
organizations. These partners have made a commitment to power their cities with clean, safe,
reliable solar energy. The Solar America Cities program promotes photovoltaics and
concentrating solar power technologies (both produce electricity), as well as solar water heating
and space heating and cooling.
For more information about other DOE efforts, visit the Office of Energy Efficiency and
Renewable Energy Web site at www.eere.energy.gov.
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Department of Labor Announces New Federal Stimulus Job Training Program
Local Workforce Investment Boards or regional consortia of boards, along with One Stop Career
Center delivery systems, are eligible to compete in partnerships with State Workforce Investment
Boards for approximately $190 million in grant funds. These funds were announced on June 24
by Department of Labor (DOL) Secretary Hilda Solis. The grants are designed to help develop a
national workforce that is ready to meet the demands of the energy efficiency and renewable
energy industries. A portion of the funds will be reserved for communities or regions undergoing
auto industry-related restructurings.
It’s called the State Energy Sector Partnership and Training Grant program
(SESPTG), which is part of a total $500 million for competitive grants for green jobs training
contained in the American Recovery and Reinvestment Act (ARRA). Secretary Solis announced
the grant competitions for this funding saying that it will be split into five separate grant
competitions for strategic partnerships and other entities to prepare workers for careers in energy
efficiency and renewable energy industries.
Four categories, including SESPTG, are designed to serve workers in need of training through
various national, state and community outlets. The other three are: Energy Training Partnership
Grants; Pathways out of Poverty Grants; and Green Capacity Building Grants. The fifth program,
State Labor Market Information Improvement Grants, will fund state workforce agencies that will
collect, analyze and disseminate labor market information and develop labor exchange
infrastructure to direct individuals to careers in green industries.
The DOL’s Employment and Training Administration (ETA) intends to fund state grants ranging
from $2 to $4 million. DOL encourages a strategic planning process that aligns the Governor’s
overall workforce vision, state energy policies, and local and regional training activities that lead
to employment in targeted industry sectors. This strategic planning process is an opportunity to
develop a statewide energy sector strategy through a comprehensive partnership and
development of a Sector Plan. If an energy sector strategy is currently in place, that strategy
should be reviewed and evaluated to address the requirements of this funding opportunity.
Funding Application Instructions
Address mailed applications to:
U.S. Department of Labor
Employment & Training Administration
Division of Federal Assistance
Attention: B. Jai Johnson, Grant Officer
Reference SGA/DFA PY– 08–20
200 Constitution Avenue, NW, Room N4716 6
Washington, DC 20210
For a full program description and complete ‘‘Application and Submission Information,’’ please
refer to section IV of the Federal Register notice of June 24, available at:
http://www.doleta.gov/grants/pdf/SGA-DFA-PY-08-20.pdf.
Applications are due to the Employment & Training Administration by Oct. 20.
For more information, please contact Jeanette Flowers, grant management specialist, Division of
Federal Assistance, DOL, (202) 693–3322 or Flowers.Jeanette@dol.gov. Please specifically
reference SGA/ DFA PY 08–20, and include a contact name, fax and phone number.
State contact information is not currently available. For updated information, please refer to the
League’s City Funding Book at www.cacities.org/federalstimulus.
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July 17, 2009
Issue #27-2009
SPECIAL BUDGET UPDATE
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STATE BUDGET DEAL APPEARS CLOSER, CITY FUNDS REMAIN IN JEOPARDY
Legislative leadership and Gov. Arnold Schwarzenegger, also known as the Big Five, met
multiple times this week to attempt to resolve the state’s deficit. The budget gap is now estimated
at $26.3 billion. While the leaders say they are close, in the absence of a final agreement, the
remaining legislators returned to their districts for the weekend. Of critical importance to cities is
that local government funding remains “on the table” and is extremely vulnerable through a
variety of irresponsible and illegal budget proposals and scenarios. In an article that appeared in
today’s Sacramento Bee it is being reported that “California cities and counties will take a
multibillion-dollar hit to help close the state's massive budget gap.”
Reports from the Big Five meetings are imprecise and inconsistent. There are however three
main areas that continue to threaten the viability of local governments:
• Highway User Tax Account (HUTA) raid;
• Redevelopment Agency funding seizures; and
• Proposition 1A loans.
These three items total $5.4 billion.
Take Action NOW to SAVE YOUR CITY!
ACTION: Call your Assembly Member and Senator at their district office TODAY and urge them
to oppose all proposals that will devastate city services by stealing local gas tax and
redevelopment funds, and borrowing property tax revenues when repayment is in doubt.
For more, see Page 2.
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‘Budget’ Continued from Page 1…
HERE’S WHAT’S AT STAKE…
HUTA Grab
The proposed $1.7 billion HUTA gas tax grab is part of the potential budget deal. This proposal
includes a seizure of $986.3 million of city and county HUTA funding in FY 2009-10, and an
additional $750 million for FY 2010-11 to pay for transportation debt services.
Multiple Redevelopment Proposals
The Big Five are currently discussing three illegal proposals related to redevelopment funds. The
combined hit is $1.7 billion.
• A two-year $350 million annual redevelopment agency (RDA) funding seizure.
• A one-year $1 billion ERAF transfer for FY 2009-10. Under this proposal, agencies could
borrow from existing balances in their low- and moderate-income housing funds.
Agencies that do not or could not make their Educations Revenue Augmentation Fund
(ERAF) payments would have to suspend all activities and begin setting aside 30 percent
of tax increment for housing. Agencies making the payments would receive a one-year
extension on their redevelopment plan limits for receiving tax increment.
• An alternative proposal sponsored by the city of Industry, that faces both political and
legal challenges, would allow RDA project timelines to be extended for 30-40 years. In
exchange, RDA’s would be required to give the state 10 percent of revenues which the
state would securitize. There are a variety of hybrid versions of this proposal also being
discussed. (If this proposal is accepted, the concept is to limit other budget hits to local
government.)
Proposition 1A Loan
Cities are still threatened by a Proposition 1A loan despite earlier statements by Legislators
coming out of the June Budget Conference Committee that they “saved” local governments from
taking property taxes. A property tax loan puts cities in a precarious position. If the state borrows
property taxes, it will be extremely challenging for cities to secure financing to securitize the loan
against the state's repayment promise. State Treasurer Bill Lockyer has warned that Wall Street
is poised to downgrade the state's bond rating again. This would mean that it will be even more
expensive for cities forced to securitize a Prop. 1A loan. Moreover, legislative borrowing only
compounds the state’s budgetary problems by “kicking the can down the road.”
Next Steps
With all indications suggesting that a deal may be near and the legislature poised to balance its
budget on the backs of local government, it is imperative that city officials contact their legislators
and the Governor TODAY and share how borrowing and/or taking local revenues will impact their
communities. PLEASE ACT NOW!
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