July 8, 2005
Issue #27-2005
LEAGUE APPLAUDS BUDGET AGREEMENT,
THANKS THE GOVERNOR AND LEGISLATIVE LEADERS
The League and local government officials received a very welcome surprise on
July 6, when Gov. Schwarzenegger and legislative leaders announced a budget
agreement that includes full funding ($1.3 million) of Proposition 42 transportation
projects, and full, early repayment of the $1.2 billion Vehicle License Fee (VLF) gap loan
taken from cities and counties by the state in 2003. For more, see Page 2.
•••••••••••••••••••••••••
THE FINE PRINT…
Here is a summary of the key items in the budget affecting California cities:
• VLF gap loan early repayment: $1.2 billion ($491.2 million to cities)
• Prop. 42 - city portion of local streets and roads money ($254 million for both
cities and counties; cities get half of that - $126.5 million). Additionally, another $1
billion in Prop. 42 funds will be allocated to state managed projects – many
benefiting our local communities. For more, see Page 3.
•••••••••••••••••••••••••
EARLY REPAYMENT OF VLF GAP LOAN:
A WELCOME SURPRISE FOR ALL CITIES
The announcement that the FY 2005-06 budget will include early, full repayment
of the “VLF Gap Loan” is good news for cities and counties who will now receive this
payment earlier than expected. The early repayment also benefits the state because it
liquidates a state debt and eases some of the stress that will be felt in next year’s state
budget. For more, see Page 3. 2
Continued from Page 1 – League Applauds Budget Agreement…
One day later, the budget was passed by the Senate (34-4) and the Assembly
(64-13), and sent to the governor for his signature. Both houses also passed the budget
trailer bills. The League staff is reviewing both the budget and trailer bills to examine the
details in the final language (see “The Fine Print…” for some key items for cities).
You can review the full text of the bills online at www.cacities.org. The bills are:
Senate Bill (SB) 77 - Budget Bill, Assembly Bill (AB) 131 - Health Omnibus, AB 138 –
Mandates, AB 139 - General Government, AB 141 - Hydrogen Highway/PIER, AB 145 -
Uniform Civil Filing Fees, AB 146 - Budget Revisions, SB 62 – Transportation, SB 63 –
Education, SB 64 - Boards and Commissions, SB 68 - Social Services Omnibus, SB 71
- Resources Omnibus.
While the return of Prop. 42 funding was expected – the governor had proposed
it his May budget revision and the Legislature adopted it in the budget subcommittee –
the VLF gap loan repayment in full was a big surprise. The governor had proposed an
early repayment of half the loan amount, but the funding was not included in the budget
package adopted by the conference committee.
The League joined with the California State Association of Counties (CSAC) in
applauding the budget agreement as one that keeps faith with California voters and
repays much-needed funds to California communities (for more information, see the
Joint Press Release on the League’s web site – www.cacities.org).
Proposition 1A, the League- and local government-sponsored constitutional
amendment passed by almost 84 percent of California voters in November 2004, limited
the state's ability to take or borrow local funds. The measure sent a clear signal that
voters wanted local funds preserved to pay for local services.
Proposition 42 was passed in 2002 by 69 percent of statewide voters. It
dedicated the sales tax on gasoline to transportation projects, including repair and
maintenance of local streets and roads. But it allowed the state to shift funding to the
state general fund during times of state fiscal stress. FY 2005-06 will mark the first time
since Prop. 42 passed that the $1.3 billion sales tax on gas will be spent on
transportation. Cities and counties will receive $254 million of that amount for local
street and road maintenance projects ($126.5 million for cities). For city-by-city Prop. 42
funding information, see the League’s web site – www.cacities.org.
Full VLF Gap Loan Repayment a Welcome Surprise
City and county officials throughout the state greeted the news that full
repayment of the VLF gap loan would come one year early with surprise and
enthusiasm.
"This is a win-win for the state and local governments," said League of California
Cities President Pat Eklund, who is also a council member of the city of Novato. "It's a
savings for taxpayers because it wipes this debt off the state books and it provides funds
for important local services like law enforcement, firefighting and vital health services."
Visit the League’s web site to view city-by-city VLF gap loan amounts.
We have not yet been able to determine when the state will process the loan
repayment, but will provide this information as soon as it is available. The timing is
particularly critical for cities and counties that were considering securitization of their
share of the gap loan by selling it to investors. (For details, see “Early Repayment of
VLF Gap Loan: A Welcome Surprise for All Cities”). 3
Continued from Page 2 – League Applauds Budget Agreement…
Be Sure to Say ‘Thank You!’
City officials should be sure to thank Gov. Schwarzenegger and their legislators
for their leadership, and for producing a state budget that respects the important role
local governments play in providing services and rebuilding the state's infrastructure.
Be sure to also tell them how your city will be able to put the VLF gap loan repayment to
work, providing services or paying for infrastructure needs in your community.
•••••••••••••••••••••••••
Continued from Page 1 – The Fine Print…
• Prop. 1A ERAF shift from cities to state (-$350 million)
• Prop. 1A ERAF shift from redevelopment agencies to state (-$250 million)
• No booking fee subvention (Conference committee had proposed an appropriation
of $25 million in FY 2005-06 for booking fee and VLF hardships, but this proposal
was dropped in the final budget agreement. Remember: fees were capped at one-
half administrative costs beginning FY 2005-06.)
• Mandate Reimbursements - the obligation to repay past deferred mandate
payments was extended to a 15-year payback period (vs. the current statute from
last year's budget that said five-year payback). This budget also includes changes
that would exempt the state from reimbursable mandate claims for specific Brown
Act activities, an estimated cost to local governments and schools of approximately
$21 million in FY 2005-06.
•••••••••••••••••••••••••
Continued from Page 1 – Early Repayment of VLF Gap Loan…
Who would have predicted that the loan would be repaid early? Just six months
ago, fueled by the state’s past record of borrowing from local government, many
questioned whether the loan would be repaid at all. Even when the governor’s May
budget revision included early repayment of half of the amount, many observers
expected the proposal to be rejected by the Legislature.
It is well known that nearly 150 cities and counties securitized the VLF gap loan
by selling to investors Notes secured by the state’s promise to repay. These cities and
counties received funds early last spring, but had to accept a discount ranging from 4
percent to 10 percent, depending upon amounts and circumstances for each agency. In
all, over $650 million of the $1.2 billion was securitized, including Los Angeles County’s
stand-alone securitization. The securitization for all other cities and counties was
accomplished through California Communities, the joint powers authority sponsored by
the League and the California State Association of Counties.
Now that repayment will come early, what happens to the cities and counties that
sold their right to receive payments from the state? As it turns out, they’ll be winners,
too. Many of these agencies received the funds when they were needed to address
budget issues in FY 2004-05. And the early repayment means there will be additional 4
Continued from Page 3 – Early Repayment of VLF Gap Loan…
interest earnings, above what will be needed to repay the notes. The discounts that
local agencies had to accept will be made up or will shrink considerably.
The repayment funds for the securitized agencies will be invested until the date
the notes mature on November 15, 2006. At that time, investors will be paid for the
notes they hold. Residual funds, including the unexpected interest earned from the early
repayment, will be distributed on a pro rata basis to the agencies that securitized the
loan. California Communities is working with bond counsel to determine whether the
use of the repayment funds can be structured in a way that would allow all or a portion of
this residual amount to be paid shortly after the state payment. Participants will be
notified of the timing and amount of payment as soon as possible.
An additional twenty-six cities had enrolled in a second VLF gap loan financing
that was scheduled to close in early August. With the new knowledge that repayment
will be funded in this year’s state budget, cities have an opportunity to reconsider their
decision to securitize. If repayment is expected to come early in the fiscal year,
something the League is still attempting to confirm, the second financing will most likely
not be issued.
July 15, 2005
Issue #28-2005
WANT MORE DET AILS
ON BILLS?
Visit the League of
California Cities
website at
www.cacities.org/
billsearch.
SUPPORT CALIFORNIA ARTS DAY ON OCTOBER 7
POLLING AND PUBLIC OPINION-A ONE-TO-ONE RELATIONSHIP?
BUDGET ENACTS CHANGES TO SOME KEY REIMBURSABLE MANDATES
FEDERAL TELECOMMUNICATIONS UPDATE
STATE SUPREME COURT CLARIFIES CONTRACTORS’ STATE LICENSE LAW
RIVERSIDE MAYOR RECEIVES NATIONAL AWARD FOR LEADERSHIP
CONSITUTIONAL AMENDMENT WOULD UNDERCUT AFFORDABLE HOUSING,
JOBS, SMART GROWTH
THE LEAGUE SEEKS YOUR INPUT ON WEBSITE
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On Tuesday, July 12, the U.S. Senate voted down a proposed amendment
to the FY 2006 Homeland Security Appropriations bill (H.R. 2360) that would
have implemented recommendations of the 9/11 Commission and the Secre-
tary of the Department of Homeland Security by allocating a larger portion of
local homeland security funds based upon identified risk. For more,
see Page 6.
U.S. SENATE VOTES TO RETAIN SMALL STATE MINIMUMS IN
HOMELAND SECURITY FORMULA
According to the State Controller’s Office, cities will begin to receive
quarterly Proposition 42 allocations beginning in October 2005. Below is a
reminder on the specific use of Proposition 42 funds along with the require-
ments for cities to remain... For more, see Page 6.
PROP 42 TRANSPORTATION FUNDING: MAKING
SURE YOUR CITY IS ELIGIBLE
The State Controller’s office informed the League yesterday that cities that
did not securitize the their vehicle license fee (VLF) gap loan will receive their
loan payments from the state within the next five to ten business days, with
the countdown beginning today. The Controller’s Office staff are in the pro-
cess of contacting the recipient cities to make arrangements on how to
transfer the money to them.
VEHICLE LICENSE FEES: BUDGET UPDATE
Page 8
The Legislature is
in recess until
August 15.Visit the League’s Official Website--www.cacities.org
PAGE 2/PRIORITY FOCUS
Celebrate “California Arts Day” on October 7!
Promoted by the California Arts Council, this fifth
annual celebration is designed to recognize the
role that arts such as music, theater, visual art,
poetry, dance, and creativity in general play in the
state.
The nonprofit arts provide $5.4 billion in eco-
nomic activity annually, supporting more than
160,000 jobs and generating $300 million in local
and state revenue, according to the 2004 study
“The Arts, a Competitive Advantage for California,”
commissioned by the California Arts Council and
conducted by KPMG Peat Marwick. The study
also found that California has more arts-related
businesses and more people employed in the
creative industries than any other state.
Cities can do a number of things to support
this cause. They can adopt a city council resolu-
tion recognizing the value of the arts in their
community (Go to www.cac.ca.gov for a sample
resolution), write an editorial on how the arts play
a critical role in the community, or highlight arts
offerings of your community services department
in your October newsletter.
The annual California Arts Day is always on
the first Friday of October. For more ideas, and
additional information on the event, visit the Cali-
fornia Arts Council website at www.cac.ca.gov.
SUPPORT CALIFORNIA ARTS
DAY ON OCTOBER 7
Public officials frequently look to public opinion
polls as a reliable indicator of public sentiment.
But is it? Under what circumstances could polls
even mislead?
Come find out at the Institute for Local
Government’s (ILG) first-ever luncheon sympo-
sium at the upcoming
League Annual Confer-
ence. This year’s
symposium will feature
Daniel Yankelovich, a
leading interpreter of
trends shaping American
society. Mr. Yankelovich
is the author of 10
books, i ncl udi ng Coming
to Public Judgment, New
Rules, and The Magic of
Dialogue: Transforming
Conflict into Coopera-
tion. To learn more
about Mr. Yankelovich,
check out his interview
with Bill Moyers at www.pbs.org/now.
The symposium will be from 12:30 p.m. to 2
p.m. on Thursday, October 6, at the Moscone
Convention Center West in San Francisco. The
fee for attending this event is $40, which covers
the cost of the lunch. Your attendance also shows
your support for the ILG’s work in service to local
officials in the areas of ethics, civic engagement,
fiscal stewardship and housing/land use. League
alumni (former city officials) are invited as well!
To sign up, see the attached form or visit
www.cacities.org/ac and either check the “ILG
Luncheon” box on the regular League annual
conference registration form, or take advantage of
the online registration process. Please note that
you do not have to attend the entire conference to
attend in this event.
POLLING AND PUBLIC OPINION—A ONE-
TO-ONE RELATIONSHIP?
Daniel Yankelovich
Plan now to attend the League’s 2005
Annual Conference this fall - the first time it
has been in San Francisco since 1997.
Make you reservations through our
online system at www.cacities.org/ac.
2005 LEAGUE ANNUAL
CONFERENCE: OCTOBER 6-8,
MOSCONE CONVENTION CENTER,
SAN FRANCISCOPRIORITY FOCUS/PAGE 3 Visit the League’s Official Website--www.cacities.org
As part of the budget deliberations, the Legisla-
ture passed Assembly Bill 138, a trailer bill ad-
dressing some key issues related to reimbursable
mandates. AB 138 impacts, among others, the
Open Meeting Act (Brown Act) reimbursable man-
date items, and the Police Officer’s Bill of Rights.
In addition to those items, the bill also changed
the “payback” period for previously deferred man-
dates payments from a period of five years (as had
been agreed to last year), to a period of not more
than 15 years, beginning in 2006-2007. Currently,
there is more than $1.19 billion in deferred man-
date payments owed to local governments.
The League is concerned about these actions
to remove, reconsider, and extend the state’s
obligation to reimburse local governments for the
costs of programs that have been determined to be
reimbursable by the Commission on State Man-
dates (COSM). We will continue our efforts to
work with the Legislature on mandate related
issues as they arise to ensure that locals receive
the monies owed to them.
Brown Act Mandate
In its effort to eliminate the Brown Act reimburs-
able mandate, the Legislature made a significant
change to the Government Code that will have
implications beyond the Brown Act mandate. It
changed the law to read that if any mandate is
“necessary to implement or reasonably within the
scope of” a voter-approved ballot measure, then
the mandate is not reimbursable. Prior to this
change, the law provided that reimbursement was
not required if a statute imposed duties that were
“expressly included in a ballot measure approved
by the voters.”
Secondly, with specific regard to the Brown Act,
it found that the previously reimbursable require-
ments were “necessary to implement and reason-
ably within the “scope of” Proposition 59 approved
by the voters last November. Proposition 59 was
the measure that grants a constitutional right of
access to public information and public meetings.
By enacting both of these changes, the Brown
Act requirements are no longer reimbursable.
POBAR
The Legislature directed the COSM to review
its statement of decision regarding the Peace
Officer Procedural Bill of Rights in light of San
Diego Unified School District v. Commission on
State Mandates. This case analyzed a section of
the Education Code that requires suspension of
pupils for carrying firearms and requires that
such pupils receive a hearing. The section also
permits a principal to recommend suspension for
other behavior (but does not require suspension
for other behavior). If a principal recommends
suspension, then the pupil must receive a hear-
ing. The California Supreme Court held that the
former, but not the latter, was a reimbursable
mandate. Since the principal was not required to
recommend suspension of a pupil the costs of
the mandatory hearing were not reimbursable. It
appears as if the Legislature is making an anal-
ogy to the Police Chief, for example, who is not
required to impose discipline, investigate behav-
ior, etc. but once the decision is made to do so, a
hearing/other procedures are required.
Miscellaneous
The Legislature amended Section 13304 of
the Elections Code to relieve local governments
of the reimbursable state mandate to provide
handicapped voter access information. Chapter
494 of the Statutes of 1979 initially imposed this
activity.
The Legislature also amended Sections
15151 and 15375 of the Elections Code to repeal
the presidential primaries reimbursable state
mandate imposed by Chapter 18 of the Statutes
of 1999.
For full language and details on these
changes, go to www.cacities.org and search for
AB 138.
BUDGET ENACTS CHANGES TO SOME KEY REIMBURSABLE MANDATESVisit the League’s Official Website--www.cacities.org
PAGE 4/PRIORITY FOCUS
FEDERAL TELECOMMUNICATIONS UPDATE
Congressional action to rewrite the 1996
Telecommunications Act is limited at this point to
a handful of hearings and small, private discus-
sions among lawmakers. In the meantime,
several legislative proposals addressing a variety
of telecommunications and tax issues have been
introduced.
It is too early to determine which of the many
vehicles will become the focus of discussion, but
each proposal represents a likely issue that will
be raised once Congress begins the rewrite in
earnest. None of the bills introduced have seen
any formal legislative action yet and it is ex-
pected that no real action will begin until the next
legislative session.
It is our recommendation that city officials
begin to gear up in their local communities on
the issue of telecommunications and to familiar-
ize themselves with the issues in these legisla-
tive proposals. It is also our recommendation
that city officials begin to articulate to congres-
sional representatives the key issues in this
debate for your community. This will help to set
the stage for what promises to be an active
legislative year in Washington DC. For the time
being, we encourage city officials to state your
positions on the different legislative proposals,
but that any more pointed advocacy be placed
on hold until the direction of Congress gets
clearer next session.
The key pieces of legislation in Congress for
your review include the following:
Franchise Agreement Preemption
On June 30, Representatives Marsha
Blackburn (R-Tenn.) and Albert Wynn (D-Md.)
introduced H.R. 3146, the Video Choice Act of
2005, which would prohibit local governments
from asserting franchise agreements over
traditional telephone providers offering competi-
tive video services. H.R. 3146 has been referred
to the House Energy and Commerce Committee
and has four cosponsors. A companion mea-
sure, S. 1349, was introduced in the senate by
Gordon Smith (R-Ore.) and John D. Rockefeller (D-
W. Va.). S. 1349 has been referred to the Senate
Commerce Committee and has no cosponsors.
Municipal Broadband
Rep. Pete Sessions (R-Texas), former Texas
District Manager for SBC, introduced the Preserv-
ing Innovation in Telecom Act of 2005 (H.R. 2726)
on May 26. The bill would prohibit municipal gov-
ernments or groups affiliated with them from offer-
ing telecom services if a telecom corporation
already serves the city. No action has been sched-
uled on the bill, nor does the bill have any cospon-
sors.
On June 23, Senators John McCain (R-Ariz.)
and Frank Lautenberg (D-N.J.) introduced S. 1294,
the Community Broadband Act of 2005, which
would amend the 1996 Telecommunications Act to
preserve and protect the ability of local govern-
ments to provide broadband capability and ser-
vices. Both senators (Sen. McCain is very senior
on the committee) are on the Senate Commerce
Committee and are expected to be very active in
the rewrite of the 1996 Act.
Internet Tax
On April 19, Rep. Christopher Cox (R-Calif.)
introduced the Internet Tax Nondiscrimination Act of
2005 (H.R. 1684). Sen. George Allen (R-Texas)
introduced a companion bill (S. 859) in the Senate
with identical language. The bill would amend the
Internet Tax Freedom Act to make permanent the
ban on state taxation of Internet access and on
multiple or discriminatory taxes on electronic
commerce. H.R. 1684 has been referred to the
House Judiciary Committee and has 44 cospon-
sors, including California Representatives Calvert,
Eshoo, Herger, Lofgren, Radanovich, Dreier and
Gary Miller. S. 859 has 10 cosponsors.
On April 19, Rep. Christopher Cox also intro-
duced the Internet Consumer Protection Act of 2005
(H.R. 1685). The bill would amend the Internet Tax
Freedom Act to make permanent the moratorium
on certain taxes relating to the Internet and to
Continued on Page 8Visit the League’s Official Website--www.cacities.org PRIORITY FOCUS/PAGE 5
Former League President and Riverside
Mayor Ronald O. Loveridge was presented with
the Tom Bradley Leadership award on June 28,
at the National Association of Regional Councils’
(NARC) annual conference in Monterey. The
award recognizes leadership excellence in
advocating regional concepts, approaches, and
programs in all levels of government.
Mayor Loveridge was nominated by the
Southern California Association of Governments
(SCAG) for his leadership and commitment to
improving the transportation network in and
maintaining a high quality of life in Southern
California. A member of the SCAG Regional
Council since 1995, Loveridge is currently the
chair of the SCAG Benchmarks Task Force.
The Task Force has guided the preparation of
the State of the Region Report (an annual report
on seven key policy areas in the region) since
1998, and is made up of local elected officials
and regional issue experts in Southern Califor-
nia.
“I am truly honored by this recognition,”
Loveridge said in a news release. “Elected
leaders, such as myself, are increasingly recog-
nizing that the issues examined in the State of
the Region Report extend beyond city and
county limits, making it imperative that we work
together as regions to improve our collective
quality of life.”
The League congratulates Mayor Loveridge
on his being awarded this honor.
RIVERSIDE MAYOR RECEIVES
NATIONAL AWARD FOR LEADERSHIP In late 1999, MW Erectors and Niederhauser
Ornamental and Metal Works Company entered into
two contracts for “structural” and “ornamental” steel
work in connection with the construction of a hotel.
MW began work under the structural contract on
December 3, 1999, but did not receive its C-51
structural steel contractor’s license until December
21, 1999. MW started work under the ornamental
contract in early January 2000.
Subsequently, MW sued Niederhauser, seeking
amounts due under both contracts. The trial court
dismissed the lawsuit because MW was not properly
licensed at all times during the performance of the
contract as required by the Contractors’ State
License Law (CSLL). But the court of appeal re-
versed. The court held that MW could seek to
recover compensation for work performed under the
contracts once MW had obtained its C-51 license on
December 21.
This year on July 14, the state Supreme Court
handed down its ruling. The Court held, in part, that:
(1) the CSLL bars one from suing to recover for any
compensation under an agreement for services
requiring a contractor’s license unless the proper
licensure was in place at all times during the perfor-
mance of the agreement; (2) the CSLL does not
permit a contractor who was unlicensed at any time
during the contractual performance to recover
compensation for any acts performed while duly
licensed; and (3) a contractor fully licensed during
the performance of the contract may recover com-
pensation even if not fully licensed at the time the
contract was executed.
The League filed a friend-of-the-court brief in this
matter because cities are invariably in the category
of owners who have an interest in adherence to the
licensure laws at all times. The court of appeal’s
decision eviscerated an important defense against
the claims of unlicensed contractors.
The Legal Advocacy Committee thanks Kimberly
Barlow and Elena Gerli of Jones & Mayer for writing
the friend-of-the-court brief. Their brief may be
reviewed at www.cacities.org/recentfilings.
STATE SUPREME COURT CLARIFIES
CONTRACTORS’ STATE LICENSE LAWVisit the League’s Official Website -- www.cacities.org
PAGE 6/PRIORITY FOCUS
eligible for the allocation of these funds. To find out
how much your city will receive visit
www.californiacityfinance.com.
Use of these Prop 42 Funds: Prop 42 funds
must be used only for street and highway pave-
ment maintenance, rehabilitation, reconstruction
and storm damage repair. For Proposition 42
purposes, maintenance means patching and
overlay, and sealing. Reconstruction includes
overlay, sealing or widening of the roadway to bring
the roadway width to the desirable minimum
pavement width consistent with accepted design
standards for local streets and roads, but does not
include widening for increasing the traffic capacity
of a street or road.
Maintenance of Effort (MOE) Requirement:
In order to receive Prop 42 allocations, cities must
be in compliance with the MOE provision. The
MOE provision requires cities to expend from their
general fund, in the budget year in which Prop 42
monies are allocated, a defined amount of funds for
transportation purposes. This amount is equal to
or greater than the average transportation expendi-
tures for the fiscal years 1996-97, 1997-98 and
1998-99.
At the end of each fiscal year in which a city
has received Proposition 42 funding, the city must
prove to the State Controller that they have spent
the required MOE monies. Any that city fails to do
so must reimburse the state for the funds it re-
ceived during that fiscal year. (For specific detail on
Proposition 42, look up Section 7104 of the Rev-
enue and Taxation code.)
PROP 42 from page 1
H.R. 2360 proposes to change the distribution
formula for allocating federal homeland security
funding to state and local first responder agencies.
During the debate on H.R. 2360, Senators
Susan Collins (Maine) and Joseph Lieberman
(Conn.), both members of the Senate Committee
on Homeland Security and Government Affairs,
HOMELAND SECURITY from page 1
proposed an amendment that would set the
minimum percentage for states at 0.55 percent
of all funds spent. The current percentage is
0.75 percent, but the amendment would be
applied to more funding. As a result, a smaller
proportion of the nation’s homeland security
funding resources would be distributed
without taking into account identified risk or
threat under the proposed Senate approach.
Senators Dianne Feinstein (Calif.) and John
Cornyn (Texas) proposed an alternative plan to
set 0.25 percent as a minimum for states for four
programs: The State Homeland Security Grant
Program (SHSGP), Urban Area Security Initiative
(UASI), Law Enforcement Terrorism Prevention
Program (LETPP) and Citizens Corps. If ap-
proved and enacted, the Feinstein-Cornyn
amendment would have distributed nearly 90
percent of homeland security grant dollars
according to identified risk and threat information
In the end, large, high-threat states were
defeated. Sen. Collins argued that 43 states
would get more money under the Collins-
Lieberman amendment as opposed to the
Feinstein-Cornyn amendment.
The Senate voted to adopt the Collins-
Lieberman amendment, 71-26, and rejected the
Feinstein-Cornyn amendment, 32-65.
The result is that high-risk areas in California
and other states will continue to suffer from a
lack of federal funding to defend against and
prepare for the risk of terrorist actions.
Commenting on the story, The New York
Times had this to say in an editorial on July 14:
“Rather than dole out homeland security
money according to a system based entirely on
risk, Congress builds in guaranteed state mini-
mums - money that goes to a state regardless of
the risks and threats it faces…Senators had a
chance to fix next year’s formula, but they voted
to make it worse.”
The Senate appropriations bill will soon move
to conference with the House.Visit the League’s Official Website -- www.cacities.org PRIORITY FOCUS/PAGE 7
Senator Tom McClintock, Assemblymember
Doug LaMalfa and several co-authors announced
on July 14 the introduction of SCA 15 (McClintock)
and ACA 22 (LaMalfa), identical constitutional
amendments that would prohibit local govern-
ments from using eminent domain if it results in a
later use of the property by a private party (with a
few narrow exceptions for PUC-regulated entities
and incidental uses).
The senator is using the recent Supreme
Court Kelo v. City of New London decision (a case
that arose in Connecticut) to assert that that
eminent domain strips families of their property
and gives it to private economic interests.
The League Opposes These Measures.
These measures will strip redevelopment agen-
ci es of a seldom used, but critical tool that Califor-
nia cities urgently need to build affordable housing
for needy families, restore safe communities and
generate jobs.
Most important, this proposal is a solution in
search of a problem. California is not Connecti-
cut: we already have strong laws on the books
protecting property owners and restricting the use
of eminent domain. Redevelopment agencies may
only use eminent domain as a last resort, and only
where there is a clear finding of blight, as defined
by state law. Land does not qualify simply because
it is not being put to its optimum use or may be
more valuable for other uses.
These Measures are Job Killers. California
is in the midst of an economic recovery, and these
measures would kill valuable construction and
other jobs that redevelopment projects create.
Redevelopment is a significant economic and job-
generating resource for California and local com-
munities, responsible for more than $31.84 billion
in economic activity and the creation of
310,000 full and part-time jobs in a single year.
These projects and jobs create valuable
revenue for state government and help with the
state budget crisis.
CONSTITUTIONAL AMENDMENT WOULD UNDERCUT
AFFORDABLE HOUSING, JOBS, SMART GROWTH
These Measures Are Affordable Housing
Killers. After the federal government, redevelop-
ment is the biggest funder of affordable housing
projects in the state. And redevelopment is some-
times the only tool a community has to jump start
revitalization of downtrodden, blighted communi-
ties.
According to information from the state De-
partment of Housing and Community Develop-
ment and the State Controller, redevelopment is
responsible for the construction of 63,406 units of
affordable housing units since 1994, and 20,048
units of low- and moderate-income housing are
expected to be built or refurbished as part of
redevelopment projects over the next two years.
Since 1997-98, agencies have assisted 88,711
households with obtaining affordable housing; 45
percent of this activity occurred in the last two
reporting years.
SCA 15 and ACA 22 will make housing in
California less affordable and worsen our housing
crisis.
What You Can Do. With the Legislature
starting its summer recess today, city officials will
have a good opportunity to provide their legislators
information about why these measures aren’t
needed in California and how they will hurt your
city’s ability to build affordable housing, generate
jobs and restore public safety to blighted areas.
Here is what we ask that you do:
• Tell legislators and the media about spe
cific redevelopment projects in your city
that have included new housing, improved
public safety, generated jobs and eco-
nomic activity.
• Explain how eminent domain is a seldom
used, but critical tool to bring parties to the
table to build affordable housing, remove
blight, and create jobs.
We will provide more information about this
issue in the weeks ahead.Visit the League’s Official Website -- www.cacities.org
PAGE 8/PRIORITY FOCUS
Do you use the League of California Cities’
website? If so, we’d like to know what you think
about it!
The League has posted a short, five-minute-
or-less online website survey so that website
users can let us know how well the site works
for them, and what services they find most
valuable.
If you use the site - whether frequently or
only occasionally – please help us by participat-
ing in this short survey. Data from the survey is
collected anonymously.
To take the survey, please visit the League’s
website at www.cacities.org. Thank you!
THE LEAGUE SEEKS YOUR
INPUT ON WEBSITE
electronic commerce. H.R. 1685 has been re-
ferred to the House Judiciary Committee and has
42 cosponsors, including California Representa-
tives Calvert, Eshoo, Herger, Lofgren, Radanovich,
Dreier and Gary Miller. These bills would combine
to ensure a permanent moratorium on all taxes of
Internet services and eliminate the grandfather
provisions in the Internet Tax Nondiscrimination Act
compromise bill (now Public Law No: 108-435)
reached last year.
VoIP
On May 18, Sen. Bill Nelson (D-Fla.) intro-
duced the IP-Enabled Voice Communications and
Public Safety Act of 2005 (S. 1063) which would
direct the FCC to prescribe regulations and estab-
lish a set of requirements for providers of IP-
enabled voice service to ensure that 911 and E-
911 services are available to customers to IP-
enabled voice service. S. 1063 has been referred
to the Senate Commerce Committee and has 4
co-sponsors.
A House companion measure (H.R. 2418) with
identical language was introduced in the House by
Rep. Bart Gordon (D-Tenn.) and has 19 cospon-
sors, including California Representatives Eshoo,
Lofgren and Schiff. The House measure has been
referred to the Energy and Commerce Committee.
FED TELECOM UPDATE from page 4
Don’t miss this opportunity to get the League’s most useful reference tool. This
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council members and city department heads. The directory also features the League’s
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INFORMA TION YOU NEED, RIGHT AT YOUR FINGERTIPS!
Purchase this publication on-line at www.cacities.org/store or call (916) 658-8257 for an
order form. City officials price $30, non-city official price $65, plus shipping & handling.
THE 2005 CITY HALL DIRECTORY
IS NOW A VAILABLE