Loading...
HomeMy WebLinkAbout05/08/2009 -000 0 B A K E R S F I E L D CITY MANAGER'S OFFICE MEMORANDUM May 8, 2009 TO: Honorable Mayor and City Council FROM: Alan Tandy, City Manager SUBJECT: General Information GOOD NEWS!!!!!!!ii • The first groundbreaking took place along Mill Creek for the 19th Street mixed-use development. • Enclosed is a press release notifying us that our Recreation and Parks Department is a Gold Medal finalist in the Class IV category, competing with Madison County, WI, Raleigh, NC, and Fort Worth, TX. Each finalist must submit a twelve minute video about its department for final selection. The Gold Medal is awarded to one agency in each category at the annual conference in October. • Our Economic and Community Development Department recently applied for a $10,000 PG&E grant to purchase an electric maintenance vehicle for the Mill Creek Linear Park. We were notified that PG&E will provide a direct grant of about half the approximate cost and intends to include our request in the challenge grant program that it capable of generating another $5,000 to $7,000 in matching funds to cover the remainder of the cost. MISCELLANEOUS CITY NEWS The enclosed news articles, one from KQED and the second from the L.A. Times, report on the potential for the State to "borrow" funds from cities and counties. A message from the League of California Cities on this same subject and the proposal from the State Department of Finance are also enclosed. We believe the cost would be $6.5 million to us from the already depleted General Fund. The Legislative Analyst's Office has issued the enclosed report that finds, in part, because of state revenue collections having been weaker than expected since passage of the February budget package, major cash flow difficulties loom for California in the summer and fall of 2009. Without significant budget-balancing and cash management actions by the Legislature or unprecedented borrowing from the short-term credit markets, the state will not be able to pay many of its bills on time for much of 2009-10. The LAO believes the greatest near-term threat to the state is a prolonged impasse by the state in addressing its California's budgetary and cash flow challenges after the May special election. Enclosed is a press release on the General Services Administration's (GSA) announcement that the Federal Courthouse to be constructed downtown will be a design-build project. The GSA plans to issue the Request for Qualifications for the project on or around Wednesday, May 20th. The GSA will hold a public information meeting on Thursday, May 14th at 7:00 p.m. in the Council Chambers. The City will be engaging in several major roadway improvement projects over the summer and fall months as part of our ongoing Capital Improvement Program. Funding for these projects comes from Honorable Mayor and City Council May 8, 2009 Page 2 state and federal sources which can only be used for transportation projects. Two of these street paving projects, White Lane from Wible Road to Dovewood Street (roadway reconstruction) and Calloway Drive from Rosedale Highway to Meacham Road (roadway resurfacing) will begin on Monday, May 11th. The project on Calloway Drive is estimated to be complete on July 13th, and the project on White Lane is estimated to be complete on September 29th. More information on the scheduling of upcoming projects will be forthcoming. Motorists are urged to use caution in the vicinity of the construction projects and to take alternate routes to avoid traffic delays. We apologize for any inconvenience caused during the road improvement projects. A memo with more detail is enclosed. In an earlier General Information memo, I raised the question of holding a special Council meeting to award bids on the Westside Parkway. That will no longer be necessary and we are hoping to put the item on the June 10th regular agenda. -� As a reminder, there will be a special meeting on Monday, May 11th at noon for the following Department budget presentations: General Government, Finance, City Attorney, Public Works, and Economic and Community Development. -� The construction schedule the Mohawk Street Extension is enclosed. Other than the signal at Rosedale and lots of dirt hauling trucks, most of the $29 million in construction will not be very visible to the public. Save the date! The Mill Creek ribbon cutting ceremony will be held on Friday, May 29th at 3:00 p.m. The opening celebration will be held on Saturday, May 301h from 11:00 a.m. to 3:00 p.m. Our Risk Manager advises that our property insurance will cover the costs associated with the army truck that improperly tried to cross, and then sank, into the Centennial Plaza fountain this past week. The damages are rather extensive. The Bakersfield Police Department will honor police officers who died in the line of duty during a special ceremony on Monday, May 11th at 7:00 a.m. A memo with more information is enclosed. The Recreation & Parks Department's monthly report for April 2009 is enclosed. -� The Streets Division work schedule for the week of May 11 th is enclosed. MORE ON THE BUDGET AND THE ECONOMY Enclosed are more articles from various newspapers that highlight the difficult times public agencies are facing and how they are adjusting their budgets. ATASCADERO, CA - Last week, city officials laid off 5 employees and eliminated an additional 10 Positions as a way to close a $775,000 budget gap. The jobs that were eliminated were "not considered part of the city's core missions". FREMONT, CA - The City of Fremont is facing a $12.7 million shortfall in the current year and $16.3 million shortfall in the next fiscal year. As part of a budget-balancing plan, the city is considering laying off 20 employees and eliminating 54 vacancies. Though no police officers or firefighters will be laid off, the city isn't ruling out once again rotating fire station closures to reduce firefighter overtime. The city has opted to shed positions rather than use the bulk of its reserve funds to avoid layoffs. Honorable Mayor and City Council May 8, 2009 Page 3 MERCED, CA — The City of Merced is slated to lay off 14 employees in the coming months and the rest of the city's work force will have to pay more to keep top-tier medical coverage in order to reduce a $10.2 million budget shortfall. Five police officers will leave the city in mid-October, unless the city wins a federal grant. The city has frozen or cut 50 positions in the past 18 months as revenues declined. STOCKTON, CA — Layoff notices were sent out last Friday to fifty-five police officers and thirty-five civilian employees. Seven officers were also demoted. The layoffs and demotions will be effective June 30th. The City Manager pointed out that without cuts, the Police and Fire Departments will cost about $156 million next year. Officials have estimated city income next year at $160 million. Therefore, without cuts, the City would be forced to shut down virtually every city service, including water, sewer, community centers, street repairs, etc. Negotiations between the city and the police union revolved around contractual pay raises and pay and benefits concessions and it was the deadlock that triggered the layoff notices. RESPONSES TO COUNCIL REQUESTS Councilmember Carson • Traffic flow at Casa Loma and Lotus Lane; Councilmember Sullivan • Median cleanup on Hwy 99 ramp; • Street repair on Planz between Akers and Wible; and, • Policy on retrieval of dead animals. AT:rs:rk CC" Department Heads Pamela McCarthy, City Clerk Roberta Gafford, Assistant City Clerk 0000 M 17 r*: Media Contact: John Crosby National Recreation and Park Association (703) 858-2142 icrosbv@nrpa.org FOR IMMEDIATE RELEASE Finalists Announced for the 2009 National Gold Medal Awards AAPRA and NRPA select the agencies to compete for grand honors Ashburn, Va., May 1, 2009 — The American Academy for Park and Recreation Administration (AAPRA), in partnership with the National Recreation and Park Association (NRPA), is proud to announce the finalists of its 2009 National Gold Medal Awards for Excellence in Park and Recreation Management. This year's proud sponsor of the Gold Medal Award Program is Musco Lighting LLC. The 2009 Gold Medal Finalists are: Class I (population 250,000 and over) ■ City of Bakersfield, California ■ City of Raleigh Parks and Recreation Department, North Carolina • Milwaukee County, Wisconsin • Parks and Community Services Department, Fort Worth, Texas Class II (population 100,001 — 250,000) ■ City of Fort Collins Culture, Parks, Recreation and Environment, Colorado ■ City of Peoria, Arizona • Fox Valley Park District, Illinois • Pleasure Driveway and Park District of Peoria, Illinois Class III (population 50,001 — 100,000) • Arlington Heights Park District, Illinois • Glenview Park District, Illinois • Hoffman Estates Park District, Illinois ■ Temple Parks & Leisure Services, Texas Class IV (population 25,001 — 50,000) ■ Bartlett Park District, Illinois • Buffalo Grove, Illinois • Downers Grove Park District, Illinois • Lombard Park District, Illinois Page I of 3 Class V (population less than 25,000) • Batavia Park District, Illinois • City of Golden Parks and Recreation Department, Colorado • Itasca Park District, Illinois Vernon Hills Park District, Illinois Class - State • Michigan State ■ North Carolina State Parks and Recreation • Parks, Recreation and Historic Sites Division of the Georgia Department of Natural Resources ■ Pennsylvania Department of Conservation and Natural Resources - Bureau of State Parks The Gold Medal Award honors communities throughout the United States that demonstrate excellence in long-range planning, resource management, volunteerism, environmental stewardship, program development, professional development, and agency recognition. Each agency is judged on its ability to address the needs of those it serves through the collective energies of citizens, staff and elected officials. A panel of five parks and recreation professionals reviews and judges all application materials. Judges are chosen for their considerable experience and knowledge in parks and recreation on both local and national levels. This year's finalists will compete for Grand Award honors this summer, and all winners will be announced live during NRPA's Annual Congress & Exposition in Salt Lake City, Utah, October 13-16, 2009. For information on the Gold Medal program for 2010, contact the NRPA Awards team at awards @nraa ora. For online information, go to the National Recreation and Park Association Web site at www.nrpa.orq/awards or the Academy for Park and Recreation Administration Web site at www.rots.tamu.edu/aap - The American Academy for Park and Recreation Administration is a non-profit organization founded to advance knowledge related to the administration of recreation and parks; to encourage scholarly efforts by both practitioners and educators that would enhance the practice of park and recreation administration; to promote broader public understanding of the importance of parks and recreation to the public good; and, to conduct research, publish scholarly papers, and sponsor seminars related to the advancement of park and recreation administration. The National Recreation and Park Association is a national not-for-profit organization dedicated to advancing park, recreation and conservation efforts that enhance quality of life for all people. Through its' network of some 20,000 professionals and citizens, NRPA encourages the promotion of healthy lifestyles, recreation initiatives, and conservation of natural and cultural resources. Page 2 of 3 Headquartered in Ashburn, VA, NRPA works closely with local, state, and national recreation and park agencies, citizen groups, and corporations to carry out its objectives. Priorities include advocating favorable legislation and public policy; increasing public awareness of the importance of parks and recreation; providing continuing education, professional certification and university accreditation; and conducting research and technical assistance. For more information, visit www.nrpa.org. Musco Lighting, LLC is a company that has specialized in lighting systems for sports and large-areas for more than 30 years. Musco has pioneered dramatic improvements in energy efficiency and affordable ways to control wasted spill light and glare. Permanent and temporary lighting services range from neighborhood fields to NASCAR super speedways. For more information, visit www.musco.com. Page 3 of 3 Capital Notes —From KQED's John Myers » Props Fail, State Taps Local Government? Page 1 of 4 . RADIO . COMMi:TNITY . VIDI:?O /AUDIO . ABOUT KQED • I . SUPPORT` KOE D CAI i R i NOTE S is A GLIM !}E ()F I HE POLICIES, PEOPLE, AND €OLI i ICS 0� CALIFORNIA SIAI E GOVERNMENT, FROM JOHN MYERS OF "THE CALIFORNIA REPOR11- May 5, 2009 Props Fail, State Taps Local Government`' The 'Plan B' scenarios if the special election measures are defeated continue to trickle out of the administration of Governor Arnold Schwarzenegger. This afternoon, a new one: the governor is prepared to propose a $2 billion suspension of the 2004 constitutional initiative protecting city and county revenues. Talk of suspending 2004's Proposition I comes on the heels of a meeting yesterday where Schwarzenegger aides told the firefighting community that voters rejecting the measures on the ballot in two weeks time would result in as many as 1,700 firefighting positions. One local government official on this afternoon's call said the plan would be to borrow as much from local governments as Prop 1 A allows -- 8% of property tax revenues in the 2008-09 fiscal year, estimated at$2 billion. An aide to the governor confirms the proposal was discussed. That borrowing would not be easy... or cheap. The five-year-old constitutional amendment, championed by Schwarzenegger, requires that the money be repaid with interest within three years. It also would require a supermajority vote of the Legislature. Word of such a plan comes almost five years to the day that Schwarzenegger struck a deal with cities and counties for help back then, in exchange for Prop IA. "We have to get our act together as a state," said the governor on May 12, 2004, "rather than always looking to the counties and to the cities and take money away from them." The suspension of 2004's Prop 1 A has apparently been in the works for a while. Earlier this afternoon, I asked the budget campaign team for documentation supporting their new TV ad's assertion that "24,000 firefighters and police" could get laid off if the measures fail. http://blogs.kged.org/capitalnotes/2009/05/05/props-fail-state-taps-local-government/ Vs0nno Capital Notes—From KQED's John Myers » Props Fail, State Taps Local Government? Page 2 of 4 The document that I received referenced the Prop 1 A suspension, and was sent to me before word of the proposal was confirmed by both those on today's call and the Schwarzenegger administration. All of this is leading to a fairly intense debate as to whether the governor and his team are fairly, or unfairly, predicting dire consequences should the ballot measures fail. (A clarification: only Propositions 1C, 1D, and 1E include money being counted on for 2009-2010. The extra tax increases attached to Proposition I are still another two years away.) Whether these private meetings with interest groups like firefighters and local officials are prudent planning... or part of a last minute effort to push unhappy voters into acceptance of the ballot propositions... is the subject of some debate. Representatives of two separate opposition campaigns have called these news reports, coupled with the dire predictions in the TV ad mentioned above, "scare tactics." The governor took exception to that in an event with firefighters this morning. I think that we owe it to the people of California," he told reporters, "to tell them what the consequences are, so they know. And then they still have a choice to vote yes or no on those [measures]." And the governor said it wasn't just public safety that would be hit hard, as you can hear for yourself below: Aides to Schwarzenegger say critics of the measures need to be specific about where they would find the money to solve the state's budget woes. All of this only confirms the tension that you can slowly feel start to build around the state Capitol... not just about the May 19 election, but about what happens on May 20. Share?"his Related posts • Squabbles, Or A Full Scale Battle? • We Need New Ideas. From 2004. • Vote s: Pols Not Up to the 'l,ask`' • Tonight's Jackpot Winner: Wall Street? • The Waiting is the Hardest Part posted by John Myers at .1_30 pm I posted in 2009 Oecial Election State Bud -1- schitvrzene"—er� tags: 2009 Election Arnold.Sc�hwar-enet;�rer' California Bu4yet John Myers John Myers is Sacramento Bureau Chief for KQED's "The California Report," heard on 24 public radio stations ittp://bloias.kcied.oriz/capitalnotes/2009/05/05/props-fail-state-taps-local-LyovernmPnt/ C /IInnn creates a prooiem,,'I,_ 01guin, who grew :ssica.garrison @ latimes., ing ov. an 91 take local f Some see plan as pl the streets. People don't buy .:. oy to get voters to pass But local government Offii- e p vials said the proposal to cut ballot package May 19 $2.006 billion from cities and t counties w6uld wreak havoc: ERIC BAILEY "This-is a real thing," said It REPORTING FROM SACRAMENTO, Dan Wes,Sacramento lobbyist for Los Angeles County. "The risk we face in L.A. County is Los Angeles and other Cali- ' serious and it's potentially I i forma cities and counties could large." see more than$2 billion in reve- Judy Mitchell, mayor of h nue stripped away by the state Rolling Hills Estates and resi- 'I tE under a Schwarzenegger ad- dent of the Lea p ministration plan to trim a bal- Btie of California ' ns looning new budget deficit. Mies,in a prepared Statement called the proposed cuts"irre- sday released officials sponsible" and said it would Tuesday released a draft of the have"disastrous and long-last- plan, expected to siphon.more ing impacts." than$300 million from the city She said cities are already and county of Los Angeles,g just slashing services because of two Weeks before a special elec- the recession and cannot affprd tion on several ballot measures to cut public safety and other the governor is pushing to help services"to bail the state out.,, balance the state's books. If those The city of Los Angeles f the state would probalbnssee a stands to lose more than �3' $67 million, according to the nearly$6-billion hole carved in two-page draft proposal. The a 2009-10 budget that is already county, meanwhile could be facing a big deficit because of particularly hard hit, by some Plummeting tax revenue re- estimates potentially seeing sulting from the economic $250 million or more drained downturn, state finance offi- cials away to,help the state balance say, its books. Release of the document Cities and counties would comes as backers of the ballot probably have to increase lay_ package—Propositions IA-IF offs of police,fine,public heath, —are playing up Potential dire recreation and other workers, consequences if the measures according to the draft., flop in the May 19 special elec Schwarzenegger's proposal tion. The Yes' campaign re- would allow the state to borrow cently began airing a TV com- { mercial featuring a Los Angeles property tax revenue but re- t{ quire it be repaid within three firefighter warning of potential cuts-in years. Counties and. cities ' police and fire protec- could take out loans on Wall tion If the measures go down. Street to ease the effects, but , With public opinion polls in- such borrowing is difficult and dicating all but one of the mea- costly in the current economy. sures failing,foes of the propo- The sitions say release of the two- proposal a tap local page draft smacks of governments is one of several political contingency plans the gover- Opportunism. I nor's finance department is It's showing the signs of a weighing to balance the books. desperate campaign,"said Jon Planned cuts for the state's Coupal,president of the How- prisons and schools are ex- ard Jarvis Taxpayers Assn., petted to be released in the which opposes the measures. coming days. "What used to be a positive message has become blood in erie.bailey@latimes.com • L� LEAGUE 1400 K Street, Suite 400 • Sacramento, California 95814 OF CALIFORNIA Phone: 916.658.8200 Fax: 916.658.8240 C T T T E www.cacities.org TO: City Officials FROM: Chris McKenzie,Executive Director DATE: May 5,2009 SUBJECT: Proposal to Borrow Local Government Property Taxes Irresponsible Today the Department of Finance informed us they have presented a May Revision budget option to the Governor that he consider borrowing 8 percent of city, county and special district property tax revenues, estimated at just over$2 billion,to help close its FY 2009-10 deficit. Details of the proposal are contained in the attached option paper from DOF. You should know it is the equivalent of 8% of the fiscal 2008-09 property tax receipts including the triple-flip ip and VLF property tax swap amounts. Here is what we are saying about it: • Borrowing Proposal is Irresponsible. The proposal is irresponsible and will threaten the safety of every Californian. The League will strongly oppose any proposal that puts the funding of state government ahead of the public safety of our residents. • Proposal Puts Public Safety At Risk. California cities are struggling under the growing weight of the economic slowdown and the revenue losses it has caused. Cities have already enacted painful cuts to balance their own budgets—including layoffs, furloughs,reduction of services, and project and maintenance delays. DOF's proposal would be especially disastrous to public safety, one of the top priorities of city residents and 60–80%of most city budgets. • Proposal Would Mark Return to Binge Borrowing. The DOF proposal is fiscally irresponsible. It acknowledges the deep cuts its proposal would cause at the local level yet it fails to point out that diversion of local property tax funds to finance the state budget will only deepen the state's structural deficit;the state is obligated to repay the property taxes with interest in three years. In the meantime, however, the state will have decimated local public safety and other essential community services and dug itself a deeper hole from which it is less likely to recover. This is a step backward to the days of binge borrowing that brought California to the financial precipice in the first place. • Governor Should Reject Borrowing. The Governor opposed previous proposals to borrow local funds and should reject this proposal for the fiscally irresponsible idea it is. Borrowing local government funds will put public safety at risk and cut community services for families and children. It will never be acceptable to sacrifice essential local services to fund the state budget. The state needs to balance its budget with its resources. The proposal is attached for your information.Interestingly,it identifies many of the problems we have listed above and then some more. Your Regional Public Affairs Manager will be getting _you information shortly on what you can do help fight this idea In so doing, remember that this is a proposal to the Governor—not one he has endorsed. We recommend that you strongly criticize the suggestion—not the Governor—who may very well reject it. LEAGUE 1400 K Street, Suite 400•Sacramento, California 95814 OF CALIFORNIA Phone: (916)658-8200 Fax: (916)658-8240 C I TIES www.cacities.org May 5, 2009 Contact: Eva Spiegel, (916)658-8228 Cell, (530)400-9068 FOR IMMEDIATE RELEASE Californians' Safety Threatened by Proposal to Borrow Local Property Taxes Sacramento, CA—Today the Department of Finance informed local officials they have prepared a May Budget Revision option for the Governor to consider that borrows 8 percent of local governments' property tax revenues, estimated at just over$2 billion, to help close the state's budget deficit. The proposal will threaten the safety of every Californian. The League will strongly oppose any proposal that puts the funding of state government ahead of the public safety of city residents. "This proposal is irresponsible and would have disastrous and long-lasting impacts. Cities are already reducing services due to the recession and can't afford to cut public safety and other essential services to bail the state out," said League President and Rolling Hills Estates Mayor Judy Mitchell. Chris McKenzie, League Executive Director, added: "For most cities police and fire protection make up 60 –80% of their budgets." Californians know how important it is to maintain public safety. According to a Field Poll released April 30, seventy-four percent oppose cuts to law enforcement and police. DOF's proposal significantly increases the likelihood cities will have to cut the very public safety services the voters want protected. The League called on the Governor to reject the DOF proposal. McKenzie said: "The Governor has said repeatedly that borrowing local property taxes and Prop. 42 transportation funds is irresponsible. It only deepens the state's structural deficit and creates an obligation to repay. In the meantime, local services will be cut severely and citizens' safety will be put at risk. This is precisely the type of budgeting that California needs to avoid. The state needs to balance its budget within its own resources." The League of California Cities is prepared to fight vigorously to protect city services to the millions of Californians who live in cities. Established in 1898, the League of California Cities is a nonprofit statewide association that advocates for cities with the state and federal governments and provides education and training services to elected and appointed city officials. 2009-10 May Revision Option (Dollars in Thousands) Local Government Financing Title: Borrowing from Local Government GF FF Other Total r......Reductions on 2009-10 ..... _... _...Workload Budget ........................................................_....__._.._._................ .............._.....__._....._.. ..._......._..... ..._._......_................................ .......... .._........Reductions $2,006,000 .: . .._._._..-..._..._.._..._....................... .._._._._....._...._.__................---._..._.... ........._....._._._..._...2'006,000..... _._.......... Governor's Budget Program Description The constitution allows that up to 8% of local governments' property tax revenues can be borrowed by the state and repaid within three budget years with interest. The amount that can be borrowed is determined by the amount of property taxes received by cities, counties, and special districts in the preceding year. Borrowing from local government in the 2009-10 fiscal year would provide $2.006 billion in solutions. Program Reduction An option to address the potential budget shortfall would be to borrow property tax revenues (Proposition 1A, 2004) from local governments. Local governments could borrow against the state's constitutional obligation to repay, thereby mitigating the impact of this reduction. However, in the current economic landscape, local governments are not easily finding available short term financing and could face difficulties borrowing these funds from the market. If they borrow, local government will incur substantial borrowing costs. If local governments are unable to borrow or can borrow insufficient amounts, local government may have to make reductions to locally funded services. Property tax revenues are used by local governments for a variety of services including police and fire, waste collection, road maintenance, libraries and other services. Reduction Impacts Specific impacts of this reduction will vary by local jurisdiction and will in part depend on the ability of local government to obtain borrowing from the market. This reduction could result in cuts to locally funded services such as police and fire, waste collection, road maintenance, libraries and other services. 1 2009-10 May Revision Option (Dollars in Thousands) Based on a survey of the top 15 California cities in terms of property tax revenue collection estimates (based on 2006-07 collections), if adopted, this option could result in reductions to their budgets, as follows: Los Angeles $67,712,897 San Francisco $61,833,541 San Diego $20,054,088 San Jose $12,810,380 Sacramento $7,425,680 Long Beach $6,604,224 Oakland $6,363,535 Fresno $4,607,868 Newport Beach $4,475,138 Pleasanton $3,202,884 Bakersfield $3,071,241 Riverside $3,051,165 Fremont $3,025,522 Berkeley $2,951,759 Huntington Beach $2,886,124 Reductions, if not replaced by local borrowing, would come on top of reductions most cities and counties are considering or already budgeting to address shortfalls in local sales and property tax revenues. Finance is estimating property taxes to decline by an average of 4 percent in 2009-10 after growing only about 2 percent 2008-09 and sales taxes are declining by aboutl5 percent from 2007-08. Increases in layoffs of police, fire, public health, recreation and other tax supported workers are likely. Due to federal and state laws, counties may have limited ability to reduce costs in some programs where financial responsibility is shared, but they can make some employee compensation reductions and implement other savings. Special districts and cities often have other fees that could be raised to backfill reductions and maintain services. However, basic public protection can generally not be fee supported. Districts that are only property tax supported would face up to 8 percent budget reductions. Timing of Implementation The reduction could be legally effective on July 1, 2009, if enacted as an urgency statute. The statute would provide for the timing and mechanism of payment to the state. Locals receive property tax in December and April or shortly thereafter. Taking funds from them before that could cause a local cash crunch and some may simply not pay timely. Statutory and/or Regulatory Change The Constitution requires the Governor to issue a proclamation of a severe state fiscal hardship and passage of a separate two-thirds vote bill. The bill should specify how interest will be paid since there is no provision in current law for this and the Constitution requires there be payment of interest provided by law. It is likely locals will ask that their full cost of borrowing be covered by state interest payments. 2 MAC TAYLOR LEGISLATIVE ANALYST MAY 7, 2009 yF, AN LAO REPORT 2 LEGISLATIVE ANALYST' S OFFICE AN LAO REPORT The Legislature's Options to Address the Situation. We advise the Legislature to reduce the state's short-term borrowing need to an amount under $10 billion for 2009-10. (Regular updates from the administration on the projected cash flow situation, therefore, will be necessary during the upcoming budget deliberations.) To reduce the borrowing need and limit the state's interest costs in 2009-10, the Legislature has two very difficult options: Additional actions to increase revenues or decrease expenditures in order to return the 2009-10 budget to balance. Additional actions to delay or defer scheduled payments to schools, local governments, service providers, and others. Federal Assistance Could Come With "Strings Attached."We believe it is appropriate for the Treasurer to explore the possibility of federal assistance—such as a federal loan guaran- tee—to address this summer and fall's grim cash outlook. We caution the Legislature, however, against assuming such federal assistance will be available. By taking prompt actions to reduce the state's cash flow borrowing need to under $10 billion for 2009-10, policymakers would enhance the ability of the Treasurer and Controller to secure private investment with or without a federal loan guarantee. Moreover, reducing the state's cash flow borrowing will involve ac- tions that improve the state's medium- and long-term budgetary outlook. These actions would increase confidence in the bond markets, which are needed to continue providing funds for infrastructure projects that spur economic activity and long-term growth. Finally, and perhaps most importantly, we advise the Legislature and other state policymakers to be cautious about accepting any strings that might be attached to federal assistance. Strings attached to recent corporate bailouts—as well as federal loan guarantees provided to New York City during its fiscal crisis three decades ago—have included measures to remove financial and operational autonomy from executives. We recommend that the Legislature agree to no substantial dimin- ishment in the role of California's elected state leaders. In our opinion, the difficult decisions to balance the state's budget now are preferable to Californians losing some control over the state's finances and priorities to federal officials for years to come. 4 LEGISLATIVE ANALYST' S OFFICE AN LAO REPORT INTRODUCTION In January 2009, we published California's ➢ California's cash flow outlook. Cash Flow Crisis, one of the reports in our 2009-70 Budget Analysis Series. This report ➢ The Legislature's options to improve the provides an update on matters discussed in the cash flow outlook. January piece. Specifically, this report includes ➢ The possibility of federal assistance for the following sections: the state's cash flow challenges. A history of the state's recent cash flow problems. HISTORY OF THE STATE'S RECENT CASH FLOW PROBLEMS State Must Borrow for Cash Flow Purposes year and monthly cash flow surpluses through Every Year. In California's Cash Flow Crisis, much of the second half. To address this regular we discussed the basic dynamics of the state's imbalance of receipts and disbursements, the General Fund cash flows. Specifically, the report state must borrow for cash flow purposes each described how the state generally disburses the Figure 1 majority of General Fund dollars in the first Cash Flow Deficits Mark the First Half Of the General Fund's Fiscal Year half of the fiscal year (that is, between July 2007-08(In Billions) and December), while it $18 collects the majority of 16 —Receipts General Fund receipts —Disbursements _.., in the second half of 1q Cash Deficit the fiscal year (between 12 Cash Surplus January and June). 10 As shown in Figure 1 (which uses 2007-08 e " monthly cash flows as s - --- -- a typical example), this means that the state rou- tinely runs monthly cash flow deficits through the first half of the fiscal Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun LEGISLATIVE ANALYST' S OFFICE 5 AN LAO REPORT year: first, from internally borrowable resources see our 2009-10 Budget Analysis Series report (principally, several hundred "special funds" in entitled The Fiscal Outlook Under the February the state treasury) and second, from external Budget Package.) By their nature, revenue in- private investors. creases, spending cuts, and other budget-balanc- "Douhle Whammy"of Weak Revenues and ing actions help the state's cash situation by put- Credit Crisis Hurt State's Cash Position. As we ting or leaving more money in the state's coffers. described in our January 2009 report, weakening In addition to these budgetary actions, the Leg- state revenues and limited access to the credit islature approved a bill—Chapter 9, Statutes of markets in the first half of 2008-09 reduced the 2009-10 Third Extraordinary Session (AB 13xxx, state's resources to address cash flow deficits. At Evans)—to make additional, substantial changes the end of 2008, state officials halted funding for to the state's cash management practices. This thousands of infrastructure projects in order to bill was in addition to similar cash management conserve state cash resources. Projections at the legislation passed as part of the original 2008-09 time indicated that, absent action by the Legisla- budget package in September 2008. ture or the Controller to conserve cash, available The cash management actions enacted by resources to fund normal state operations—also the Legislature have played a key role in help- known as the state's cash cushion—would be ex- ing the state meet its priority payments on time hausted by the end of February 2009. (The Con- through 2008-09. In total, since the beginning of troller typically aims to have a minimum $2.5 bil- the fiscal year, the Legislature has added funds lion cash cushion in state accounts at any given with over $6 billion of balances to the list of state time.) At the beginning of February 2009, the accounts able to be borrowed by the General Controller used his authority to begin delaying Fund temporarily for cash flow purposes. The certain state payments deemed to be of a lower Legislature also has deferred several billion dol- priority under state law, including many vendor lars of payments to later in the 2008-09 and payments, payments to local governments, and 2009-10 fiscal years. In addition, through its en- tax refunds to individuals and corporations. By actment of legislation in March 2009, the Legis- delaying about $3 billion of payments in Febru- lature allowed the state to take immediate receipt ary, the Controller was able to conserve the cash of$1.5 billion of federal stimulus funds for Medi- cushion to make other "priority payments" of the Cal, which directly benefits the General Fund. state (such as payments for schools, debt service, In May 2009, the state will draw down nearly and state payroll) on time. $800 million of federal stimulus funds available Legislative Actions Have Eased Cash Crunch to cover costs of the state prison system on an During Second Half of 2008-09. The budget expedited basis, thereby reducing General Fund package approved by the Legislature on February expenditures. Enactment of the February budget 19 and signed by the Governor on February 20 package also helped the Treasurer to execute addresses a $40 billion budget shortfall with a an additional $500 million cash flow borrow- combination of temporary tax increases, spend- ing with The Golden 1 Credit Union and restart ing cuts, borrowing, and federal stimulus funds. long-term infrastructure bond sales. Two huge (For more information on the budget package, and extraordinarily successful long-term bond b LEGISLATIVE ANALYST' S OFFICE AN LAO REPORT sales in March 2009 Figure 2 and April 2009 raised Controller: February Budget Package Eased over $13 billion for state 2008-09 Cash Crunch projects and allowed Estimated State"Cash Cushion"(In Billions)e the administration to end the state project $s "funding freeze" that had been instituted in E f Marcn si late 2008 due to the cash crisis. Controller Was p Able to End Previ- ously Instituted Delay .2 of Certain State Pay- Estimates Before February Budget Package ments. Due to all of the -4 - -- - cash flow and budget- ary changes described -6 above, the Controller April May dune "Estimates are for the lowest amount of cash cushion available to pay state bills on any day during the was able to end the months listed. delay of non-priority state payments. On the February budget package and on March 31, March 31, 2009, the Controller stated that the when he was able to make this statement. The state government had sufficient cash resources to dramatically improved March 31 figures reflect "meet all of our obligations in full and on time" (1) enactment of the February budget package, through the rest of 2008-09. Figure 2 shows the (2) completion of the $500 million short-term Controller's estimates of the state's cash cush- Golden 1 cash flow borrowing, and (3) the accel- ion in late 2008-09 both before enactment of erated receipt of Medi-Cal stimulus funds. CALIFORNIA'S CASH FLOW OUTLOOK Administration Projections Indicate a New lion of extra disbursements in the forecast for Cash Crisis May Lie Ahead. In early March 2009, "unanticipated cash risks" through the end of the Department of Finance (DOF) prepared an 2008-09, DOF indicated that the budget pack- estimate of how the various measures associated age had practically eliminated the cash crunch in with the package (including the tax increases, the current fiscal year. The DOF forecast, how- spending reductions, payment deferrals, and ever, indicated the possibility of severe cash flow newly authorized borrowable funds) affected pressures reemerging as soon as July 2009 and the state's cash flow outlook through the end persisting through much of 2009-10. of 2009-10. Even after including about $1 bil- LEGISLATIVE ANALYST ' S OFFICE 7 AN LAO REPORT Severely Weakened Cash Cushion at the taken various budgetary and cash management End of 2008-09 Is Expected to be a Key Prob- actions such as these, the state's cash cushion /em. The key problem identified in the DOF would have been zero at the end of 2008-09. forecast is the likelihood of a severely weak- Potentially Unprecedented Short-Term ened state cash cushion at the conclusion of the Borrowing May Be Required in 2009-10. A 2008-09 fiscal year. While the budget package weakened cash cushion on June 30 is a problem allows the state, in the Controller's view, to meet because of the basic dynamics of the state's Gen- its budgeted obligations on time through the rest eral Fund cash flows displayed earlier in Figure 1. of 2008-09, the DOF forecast shows that the state The state disburses the bulk of its General Fund cash cushion would be $6.9 billion on June 30. expenditures during the first half of the fiscal This is much less than the state typically has in its year, but collects most of its receipts later. This cash cushion at the end of a fiscal year—indica- means that several months at the beginning of tive of the fact that the state will most certainly the fiscal year have monthly cash flow deficits— end the 2008-09 fiscal year with a budgetary that is, months when monthly General Fund deficit. (The February budget plan anticipated receipts are less than monthly General Fund there being an operating surplus in 2009-10 to disbursements. While the DOF's March 2009 address the 2008-09 budget deficit and build forecast projects a cash cushion of$6.9 billion up a reserve account.) Figure 3 shows that the (consisting entirely of borrowable special fund expected fiscal year-end cash cushion at June 30, balances—with no available General Fund bal- 2009, is roughly one- half of the cash cushion Figure 3 the state had one year before and only about 2008-09 Year-End Cash Cushion to Be Much Lower Than in Prior Years one-third of the amount of three years ago. To (In Billions) put these figures in per- $25 spective, note that the year-end cash cushion 20_ for 2008-09 reflects the Legislature's actions 15 ._ over the past year to add several billion dol- lars of funds to that cash 10 cushion in the form of new special funds 5 eligible to be borrowed by the General Fund for cash flow purposes. 2005-06 2006-07 2007-08 2008-09a Had the Legislature not aDepartment of Finance cash flow forecast as of March 2009.Based on assumptions in 2009-10 budget package. 8 LEGISLATIVE ANALYST' S OFFICE AN LAO REPORT ance) as of June 30, 2009, the forecast indicates anticipation warrants (RAWs)—are described in that the General Fund is expected to have a the nearby box. monthly cash flow deficit of $7.9 billion in July A huge concern is that monthly cash flow 2009 alone. The estimated cash flow deficit in deficits of varying amounts are expected un- that month is so great that DOF estimates the der the February budget package every month cash cushion will be depleted under the Febru- between July 2009 and November 2009. These ary budget package unless the Controller delays five consecutive months of monthly cash flow state payments once again as he did in February deficits mean that, under the DOF forecast, the or the state borrows funds from private investors. state would need to borrow amounts that could The state borrows on a short-term basis from grow to well over $13 billion by about October— the credit markets virtually every year by issuing probably through issuance of RANs or RAWs- revenue anticipation notes (RANs). These notes, in order to pay all bills on time and maintain along with a related borrowing source—revenue the state's traditional minimum cash cushion REVENUE ANTICIPATION NOTES (BANS) AND REVENUE ANTICIPATION WARRANTS (RAWs) RANs. The state's most commonly used device for external cash flow borrowing is the RAN—a low-cost, short-term financing tool. Typically issued early in the fiscal year, RANs must be repaid prior to the end of the fiscal year of issuance (usually in April, May, or June). Unlike most of the state's long-term infrastructure bonds, RANs are not state general obligations. The RANs are secured by money in the General Fund that is available after providing funds for the state's "priority payments," such as payments to schools, general obligation debt service, and state employee payroll, among other payments. The State Treasurer's office works with financial firms to issue RANs almost every year. The state has sold $5.5 billion of RANs to investors dur- ing 2008-09. RAWs. The state has issued RAWs for cash flow relief occasionally since these securities were created during the severe state budget crisis of the early 1930s. The main reason that the state resorts to RAWs is that they can be repaid in a subsequent fiscal year after their issuance. In fact, one California RAW issued in July 1994 matured 21 months later. The ability to have a later maturity date means the state can borrow for cash flow purposes even if the state's cash outlook is challenging in the near term. Because of this longer maturity schedule and the fact that RAWs typically are issued when the state faces challenging budget times, they generally are more costly—with higher interest and other issuance costs—than RANs. The state's $7 billion of RAWs in 1994, for example, resulted in interest and other issuance costs of over $400 mil- lion, and the $11 billion of RAWs in 2003 resulted in over $260 million of costs. The State Controller's office works with financial firms to issue RAWs. LEGISLATIVE ANALYST' S OFFICE 9 AN LAO REPORT of$2.5 billion. Figure 4 summarizes DOF's ported that, through the end of March, amounts March 2009 cash flow forecast by showing in borrowable special funds were running about the expected end-of-month state cash cushion $2 billion higher than forecast. (It is not known throughout 2009-10 before considering any bor- whether this will be a sustained trend.) In ad- rowing from private investors. The forecast shows dition, as described earlier, about $800 million the state's accumulated cash deficit—illustrated of federal stimulus moneys for corrections was in Figure 4 as the "negative cash cushion"— received earlier this month—over one year in would reach $10 billion to $11 billion for much advance of its expected date of receipt based of the middle part of 2009-10. The state, there- on the DOF March forecast. (While legislative fore, might need to borrow over $13 billion from action allowed the state to expedite receipt of investors in order to pay all currently budgeted certain Medi-Cal funds from the federal gov- bills on time and maintain the target minimum ernment, this already was factored in DOF's $2.5 billion cash cushion described above. 2009-10 cash flow forecast.) On the other hand, Some Negative Signs Have Emerged Since more than offsetting these positive develop- the March Cash Forecast. Figure 5 lists several ments has been a variety of negative economic developments for the state's cash flow situation and state revenue data, which led our office to that have emerged since DOF completed its fore- project in March 2009 that General Fund rev- cast in March. Some of these developments have enues in 2009-10 would be about $8 billion been good news. For example, the Controller re- below those assumed in the February budget package and DOF's Figure a March cash forecast. March 2009 Forecast Projected Huge Deficit in the (Because of the timing State's Cash Cushion Through Much of 2009-10a of state receipts, a loss (In Billions) of$8 billion in annual $4 revenues does not nec- essarily mean the state needs to borrow the o same $8 billion to keep paying bills on time in each month.) Net state -4. -- receipts of personal income and corporate tax payments in April 2009 also were weaker than expected—adding to poor February and 12 March revenue collec- July September November January March May aThis figure shows the projected amounts in the state's cash cushion on the last day of each month based on tions. After considering the February budget package before consideration of any short-term borrowing from private investors. these developments and 10 LEGISLATIVE ANALYST' S OFFICE AN LAO REPORT assuming that higher amounts in borrowable ➢ First, this would be an unprecedented special funds persist, we can make a rough esti- amount of short-term borrowing for the mate that the state's borrowing requirement from state. State short-term borrowing reached private investors in 2009-10 may be somewhere a peak of just under $14 billion—raised around $17 billion—or $4 billion higher than through issuance of both RANs and forecast by DOF in March. Further projected RAWs—during 2003-04, but this oc- revenue declines or expenditure increases could curred during a period of relatively easy add to this borrowing need, including the voters' credit availability. Then, liquidity in the possible rejection of Propositions 1C, 1D, and lE short-term credit markets was healthy on the May 19 ballot. As shown in Figure 5, re- (unlike in recent months) and credit stan- jection of these measures could cause the state's dards of investors and banks were less 2009-10 investor borrowing requirement to swell restrictive than they are now. to around $23 billion. Borrowing Well Over$13 Billion on the ➢ Second, the amount of borrowing as State's Own Credit May Not Be Possible. Of- a percentage of state receipts—over ficials of the administration, the Treasurer's office, 13 percent for a $13 billion short-term and the Controller's office meet regularly with borrowing—is at least double the maxi- representatives of financial institutions and insti- mum typically recommended by mu- tutional investors in the municipal credit markets. nicipal bond market credit experts. This Despite the state's recent means it is likely that RAWs or RANs successes issuing bonds in the long-term credit Figure 5 markets, the major finan- State's 2009-10 Short-Term Borrowing Need cial institutions reported- (In Billions) ly have indicated to state officials that California will have difficulty bor- Known developments since March cash forecast Higher amounts in borrowable special funds(as of March 31) -$2 rowing $13 billion from Expedited receipt of federal stimulus funds for corrections -1 the short-term markets Lower revenue receipts from February to April 2009 3 based on its own credit Possible need based on LAO's forecast of lower 2009-10 revenuesa 4 in 2009-10—let alone Subtotal $4 the much larger amount of around $23 billion dis- Effect if Propositions 1C, 1 D,and 1 E Are Rejected by Voters $6 cussed in Figure 5. There are various reasons why a In a March 2009 report we forecast that General Fund revenues would be$8 billion below the February budget package forecast in 2009-10.Because some of this difference affects state receipts the state may have dlf- in April through June 2010,when state cash flows are relatively strong,this difference would not likely result in an$8 billion increase in the state's needed borrowing from short-term investors.Instead,the ficulty borrowing such decrease in revenues should result in a smaller increase in the state's borrowing need.We show $4 billion here as a very rough estimate. large amounts: LEGISLATIVE ANALYST ' S OFFICE 11 AN LAO REPORT totaling over $13 billion would have a such as money market funds—have poor credit rating. With weakened banks stricter credit standards than ever before, and other financial institutions limited in and they may be reluctant to purchase their ability to offer credit enhancement RANs or RAWs with a low rating. Even (essentially, a type of bond insurance) to if investors did purchase the securities, the state's RAWs or RANs, a low rating state interest costs for borrowing may will mean that major segments of the exceed budgeted amounts—potentially short-term investor market will be unable by as much as hundreds of millions of or unwilling to participate in the state's dollars—as the administration warned 2009-10 cash flow borrowing. With fresh the Legislature in a budget letter submit- memories of their own liquidity crisis last ted in early April 2009. year, major short-term market investors— RECOMMENDATIONS AND OPTIONS FOR THE LEGISLATURE In this section, we address ways that the we recommend that the Legislature focus in the Legislature can address the state's cash flow coming weeks on a goal of reducing the state's crisis. First, we discuss broad goals concerning cash flow borrowing need for 2009-10 to some- state cash flows for the Legislature to consider in where below $10 billion. In any scenario, this its upcoming budget deliberations. Second, we will make it easier for state officials to execute the discuss specific options that the Legislature may state's cash flow borrowing. To accomplish this need to consider to achieve these goals. Third, goal, the Legislature will need to ask the admin- we discuss the important issue of timing: when istration for regular updates on projected cash the Legislature needs to take action to provide flows during its upcoming budget deliberations. the greatest possible assurance that the state can Reducing Short-Term Borrowing Need Be- continue paying its bills on time. low$10 Billion Means More Difficult Choices. Broad Goals for the Legislature lust as the Legislature faced difficult choices earli- er in 2008-09 to balance the budget and address Concerning State Cash Flows the cash flow crisis, even more difficult choices Recommended Legislative Goal. Reducing remain for returning the budget to balance and State's Need for Short-Term Borrowing. While reducing the 2009-10 cash flow borrowing need the state's recent success in selling long-term below $10 billion. The options for the Legislature infrastructure bonds and resuming funding of to accomplish this fit into two general categories: voter-approved projects is a positive sign, we are Budgetary actions to increase revenues concerned about the potential difficulty and high costs involved in borrowing $13 billion or more or decrease expenditures of the General for cash flow needs in 2009-10. Accordingly, Fund or other state funds available for cash flow borrowing. 12 LEGISLATIVE ANALYST' S OFFICE AN LAO REPORT Cash flow actions to delay budgeted mental entities cope with additional payment state payments or accelerate receipt of delays. revenues from either the General Fund or Accelerating Issuance of Lottery Securitiza- borrowable special funds. tion Bonds May Prove Beneficial. The DOF cash Returning the Budget to Ba lance Would projections assume that the state receives $5 bil- Help the Cash Flow Situation. By their nature, lion of lottery securitization proceeds—con- actions to increase state revenues or decrease tingent upon voter approval of Proposition 1C expenditures help the cash flow situation, there- in May 2009—in March 2010. To ease the fall by reducing the required borrowing from short- 2009 cash crunch somewhat, we recommend term credit markets. Accordingly, we recommend that the Legislature encourage the administra- that the Legislature focus first on addressing the tion, which would control the lottery borrowing budget deficit. However, because budgetary process under Proposition 1C, to pursue issuing balancing actions will not necessarily deliver some or all of the lottery securitization bonds by their full benefit in the opening months of the October 2009. The lottery borrowing—a long- fiscal year—when the state's cash flow problems term bond market offering—would reduce the are the greatest—balancing the budget alone need for issuance of short-term state obligations may not solve the state's cash flow difficulties. by the Treasurer or Controller by perhaps a few Additional actions to defer payments or acceler- billion dollars in the fall. Reducing the size of ate state receipts during the fiscal year may be these short-term obligations would make it easier for state officials to market securities to short- necessary. term investors. Specific Options for the Legislature to "Trigger Legislation"May Be Required. In Achieve These Goals our January report on the cash flow crisis, we Beyond the very difficult choices for the discussed the possibility that so-called trigger leg- Legislature in returning the 2009-10 state budget islation might be needed to facilitate the sale of to balance, there are some particular options that RAWs by the Controller. In the past, trigger leg- lawmakers may need to consider to address the islation—such as Chapter 135, Statutes of 1994 state's cash flow challenge. (SB 1230, Committee on Budget and Fiscal Re- Additional Payment Deferrals May Be Nec- view)—has helped the state sell short-term cash essary. Because state payments to schools rep- flow instruments by providing greater assurances resent a large portion of General Fund disburse- to potential investors. Chapter 135 required the ments in cash flow deficit months like July and state to reduce most categories of expenditures October, additional measures to delay scheduled at the time if cash flow projections showed that state payments to schools may be necessary. De- timely payment of RAWs was threatened. Given ferrals of scheduled payments for various other the need to preserve the Legislature's consti- programs also may be required. To the extent tutional prerogatives over the state budget, we that federal stimulus funds are available to school would be reluctant to recommend passage of districts and other local governments by early in trigger legislation that ceded to the Governor the the 2009-10 fiscal year, this may help govern- ability to determine which revenues were in- LEGISLATIVE ANALYST' S OFFICE 13 AN LAO REPORT creased or expenditures decreased to provide as- and address the state's budgetary and cash flow surances to investors of timely RAW repayment. difficulties, private investors may be unwilling Instead, assuming such legislation proves neces- to lend the state such large sums. Therefore, sary, we advise the Legislature—as it did in the legislative actions to return the budget to bal- February budget package in constructing a rev- ance and address the state's cash flow challenges enue and expenditure trigger tied to the receipt may be required before the Treasurer and Con- of federal stimulus moneys—to specify which troller can issue the required amount of RANs expenditures would be decreased and revenues or RAWs. Accordingly, in our view, the most increased in any RAW trigger legislation. significant near-term threat to the state's cash flows is a prolonged legislative impasse in ad- Action by Late June or Early dressing California's budget difficulties after the July at the Latest Is Needed May Revision. The Controller and Treasurer will Time Is of the Essence in Addressing Cash have the greatest ability to issue sufficient RANs Flow Problems. Addressing the state's cash flow and RAWs in a timely fashion if the Legislature challenges is inherently a matter of timing. For restores the budget to balance and takes action the state to have sufficient funds to make General to reduce the state's short-term borrowing need Fund and special fund payments on time, access by late June 2009 or early July 2009 at the latest. to sufficient borrowed funds—from both internal By taking action on this timeline, the Legislature sources and private investors—is needed by a would allow state officials to begin to access the given date. The DOF projections under the terms short-term credit markets in early or mid-July. In of the February budget package show that the any event, the earlier the Legislature takes action state will need to begin borrowing from private after the special election to address the state's investors in the short-term credit markets in July. budget and cash problems, the less likely that Under this package, a total of well over $13 bil- the Controller will have to resume delaying state lion in private borrowing likely would need to payments in order to preserve cash for timely be completed by October. As discussed earlier, disbursement of priority payments, such as pay- the state may face a major new budgetary gap ments to schools and bondholders. that will also worsen the state's cash situation. Absent legislative actions to rebalance the budget THE POSSIBILITY OF FEDERAL ASSISTANCE Treasurer Exploring Federal Assistance, cess the short-term debt markets. We believe that Such as a Federal Guarantee for RANs or it is appropriate for the Treasurer to explore these RAWs. Given the possible difficulty for the state options with federal officials. Among the options marketing a vast amount of short-term notes or for possible federal assistance are: warrants, the Treasurer's office has indicated that it is exploring potential federal assistance for the ➢ A federal guarantee of the state's short- state (and other public entities) that need to ac- term cash flow borrowing. 14 LEGISLATIVE ANALYST' S OFFICE AN LAO REPORT A federal commitment to purchase the debt obligations would. Nevertheless, the fed- state's RANs or RAWs from investors eral government also could insist on a binding, in certain circumstances, perhaps using multiyear budget balancing plan from the state funds of the Troubled Assets Relief Pro- or the ability to assume some sort of operational gram approved by Congress in 2008. control or oversight of state operations in certain cases. For example, the New York City guarantee Accelerated receipt of federal stimulus act required the city to submit to the Secretary moneys that offset state General Fund of the Treasury a plan for balancing its budget expenditures, which could reduce the within roughly four years and mandated that state's need for cash flow borrowing in an independent fiscal monitor "demonstrate to 2009-10. the satisfaction of the secretary that it has the Recently, the U.S. government has assisted vari- authority to control the city's fiscal affairs dur- ous financial institutions and corporate entities ing the entire period in which federal guarantees facing insolvency. In addition, there is precedent are outstanding." The state-created fiscal control for a federal guarantee of a public entity facing board that oversaw New York City's finances serious financial difficulties. In 1978, the Con- remains in existence to this day, although many gress passed and President Carter signed the of its powers under state law have expired. In New York City Loan Guarantee Act, a response short, the Legislature and policymakers should to the city's severe fiscal crisis at the time. A expect that there would be strings attached to properly structured federal loan guarantee of federal assistance. While the severe nature of the this type would allow the state relatively simple state's cash flow problems necessitate consider- access to the bond markets. Such bond market ing an offer of federal aid, we recommend that access would be based on the U.S. government's the Legislature be very cautious about accepting full faith and credit. A guarantee may require ap- federal aid with strings attached that undermine proval by the Congress in a bill, which would be the ability of this Legislature or future Legislatures subject to approval or veto by the President. to set the state's fiscal and policy priorities. We Recommend That Legislature and Policy- recommend that the Legislature agree to no sub- makers Be Cautious About Strings Attached to stantial diminishment of the role of California's Federal Assistance. Given recent experience, elected state leaders. In our opinion, the difficult it is likely that any substantial federal assistance decisions to balance the state's budget now are for California's cash flow problems would come preferable to Californians losing some control with conditions. Recent federal bailouts of pri- over the state's finances and priorities to federal vate entities have involved those entities losing officials for years to come. at least some operational autonomy to federal Legislature Should Not Assume Federal As- officials. At the very least, as occurred with sistance Will Be Forthcoming. We recommend New York City's loan guarantees in the 1970s, that the Legislature not proceed with the assump- the federal government likely would charge the tion that federal assistance will be forthcoming to state a fee for a federal loan guarantee—just deal with this summer and fall's state cash flow as a bank or bond insurer guaranteeing state problems. By beginning to address the state's LEGISLATIVE ANALYST' S OFFICE 15 AN LAO REPORT budget and cash flow challenges immediately prompt actions to return the budget to balance after the May special election, the Legislature and reduce the cash flow problem may help will give the Treasurer and Controller the greatest convince federal officials that temporary assis- range of options to address the state's expected tance to the state is justified. cash flow challenges. Moreover, the Legislature's CONCLUSION While the February budget package and ➢ Act quickly—by late June or early July at earlier legislative decisions have helped ease the the latest—to address the state's budget state's cash crunch during 2008-09, major chal- and cash flow challenges in order to help lenges for the state's cash flows loom in the sum- the Controller and Treasurer access the mer and fall of 2009. In our opinion, the greatest short-term bond markets beginning in near-term threat to the state paying its budgeted July. bills on time would be a prolonged impasse by the state in addressing California's budgetary ➢ Consider additional cash management and cash flow challenges after the May special measures, including possible additional election. Moreover, we recommend that the delays in scheduled payments and accel- Legislature not proceed with the assumption that eration of receipt of lottery securitization federal assistance will be available to help the proceeds. state address its cash flow crisis. Accordingly, we Be very cautious about accepting fed- recommend that the Legislature: eral assistance for the state's cash-flow Focus in the coming weeks on reducing problems, especially given the strings that the state's cash flow borrowing need for may be attached to such aid. 2009-10 to somewhere below $10 billion. LAO Publications This report was prepared by Jason Dickerson, and reviewed by Michael Cohen. The Legislative Analyst's Office (LAO) is a nonpartisan office which provides fiscal and policy information and advice to the Legislature. To request publications call (916) 445-4656. This report and others, as well as an E-mail subscription service, are available on the LAO's Internet site at www.lao.ca.gov. The LAO is located at 925 L Street, Suite 1000, Sacramento, CA 95814. 16 LEGISLATIVE ANALYST ' S OFFICE /0 0 B A K E R S F I E L D City Manager's Office MEDIA ADVISORY FOR IMMEDIATE RELEASE CONTACT: General Services Administration Friday, May 8, 2009 Arthur L. Brown Contracting Officer (415) 522-3292 Bakersfield Federal Courthouse Announcement of Design-Build Project Informational Meeting — May 14, 2009 The General Services Administration has announced that the Federal Courthouse to be constructed in downtown Bakersfield will be a design-build project. The GSA plans to issue the Request for Qualifications for the project on or about Wednesday, May 20tH The GSA will hold a public information meeting on Thursday, May 14, 2009. The meeting will be held at City Hall South, 1501 Truxtun Avenue in the Bakersfield City Council Chambers at 7:00 p.m. Representatives from the GSA and the City will be present to discuss the project and to address questions from the public and potential bidders. The courthouse project is being funded from the 2009 American Recovery and Reinvestment Act (the Federal economic stimulus program recently passed by Congress). It will be constructed in the central downtown business district on a site donated by the City of Bakersfield at 19th Street, between R and S Streets. In keeping with the GSA's "Design Excellence Program" the architecture will be compatible with the new Mill Creek linear park area being developed by the City adjacent to the courthouse site. The courthouse will be approximately 33,400 square feet, with an estimated cost between $17 and $22 million dollars, according to the GSA. More information about the Federal courthouse design-build project is available at www.fedbizopps.aov City of Bakersfield • City Manager's Office • 1600 Truxtun Avenue Bakersfield, California a 93301 (661) 326-3751 • Fax (661) 324-1850 B A K E R xooe��� 0 S F I E L D Public Works Department Raul Rojas - Public Works Director PRESS RELEASE FOR IMMEDIATE RELEASE Contact: Rick Millwee Friday, May 8, 2009 Construction Superintendent (661) 326-3049 Major Local Transportation Improvement Projects to Begin The City of Bakersfield will be engaging in several major roadway improvement projects over the summer and fall months as part of our ongoing Capital Improvement Program. Two of these street paving projects, White Lane from Wible Road to Dovewood Street (roadway reconstruction) and Calloway Drive from Rosedale Highway to Meacham Road (roadway resurfacing) will begin on Monday May 11, 2009. The project on Calloway Drive is estimated to be complete on July 13, 2009, and the project on White Lane is estimated to be complete on September 29, 2009. During the construction of these projects, traffic will at times be reduced down to one lane in each direction. In addition, access to side streets and driveways will be closed only for the period of time that reconstruction is occurring at that intersection. Detours and alternate access points will be provided during these closure periods. This will result in traffic delays, so drivers are urged to use alternate routes. Upcoming projects to be constructed during the summer and fall will include: • Median Modification on Stockdale Highway from Village Lane to Wetherly Drive and from Country Club Entrance to Ashe Road; • Roadway Reconstruction of White Lane from Gosford Road to Ashe Road; The above referenced projects are being funded through State and Federal monies, which are specifically designated for transportation projects only. City of Bakersfield • Public Works Department • 1501 Truxtun Avenue Bakersfield, California • 93301 (661) 326-3724 • Fax (661) 852-2120 Press Release City of Bakersfield Transportation Projects May 8, 2009 Page Two In addition, the City will be able to construct the following projects this year with funding from the Federal economic stimulus program, the American Recovery and Reinvestment Act: • Roadway Reconstruction of Mount Vernon Avenue from Highway 178 to University Avenue; • Roadway Reconstruction of Wilson Road from White Lane to Planz Road; • Roadway Reconstruction of Hughes Lane from White Lane to Planz Road; • Roadway Reconstruction of Wible Road from White Lane to Pacheco Road; • Roadway Reconstruction of Ashe Road from White Lane to Ming Avenue More information on the scheduling of the upcoming projects will be forthcoming. Motorists are urged to use caution in the vicinity of the construction projects and to take alternate routes to avoid traffic delays. We apologize for any inconvenience caused during the road improvement projects. For more information, please contact Rick Millwee, Public Works Construction Superintendent, at (661) 326-3049. START DESCRIPTION May18 thru June 15th 2009 Rosedale/Mohawk Traffic Signal June 16 thru Aug 20th 2009 Begin Earthwork( 3 total months, +/- 41,000 truck loads) June 4, 2009 Begin Railroad Bridge (drive piles for foundation) July 22, 2009 Begin Kern River Bridge (drive piles for foundation) September 8 thru October 19, 2009 Begin Westside Parkway Bridge (drive piles for foundation) May 20a'is the start of the widening of existing Mohawk north of RR tracks February 8 thru April 21, 2011 Expand/Modify Truxtun/Mohawk intersection(signal mod, etc.) First working day is May 20, 2009 Project completion February 10, 2012 12009 BAKES f *' BAKERSFIELD POLICE *� MEMORANDUM I IFO � lip Date: May 1, 2009 To: Alan Tandy, City Manager From: W. R. Rector, Chief of Police IM2 Subject: Peace Officer Memorial Ceremonies Peace Officer Memorial Week is May 10-16, 2009. The Bakersfield Police Department will honor police officers who died in the line of duty during a special memorial ceremony on Monday, May 11 th at 7:00 a.m. The ceremony will be held in front of the Police Department Memorial at 1601 Truxtun Avenue; it is expected to last approximately 30 minutes. On Thursday, May 21, 2009, California Highway Patrol will host the County-wide memorial ceremony in honor of "Peace Officers' Memorial Week." The ceremony will commence at noon at the Kern County Peace Officers' Memorial located at 1415 Truxtun Avenue, and is expected to last approximately 30 minutes. I would like to invite Mayor Hall, City Council Members and all City staff who would like to join us as we honor law enforcement officers who have made the ultimate sacrifice while serving their community. Please feel free to call if you have any questions. B A K E R S F I E L D Department of Recreation and Parks Date: May 7, 2009 To: Alan Tandy, City Manager From: Dianri'e 4over, Director of Recreation & Parks MAY o 7 2,009 Subject: April 2009 Monthly Report ADMINISTRATION: • Sports Village — Phase I project is scheduled to begin construction in June 2009. • Greystone Park — Project award is projected for late May 2009. • Stiern Park — Grand Opening event held on May 1, 2009. • Mill Creek — Central Park hydroseeding complete. Grand Opening scheduled for May 29 and 30. • Saunders Wet Playground —All features are installed with a projected opening in June. • Kern River Upland & River Edge Restoration Project - Grant funding has been approved for release. Awaiting receipts of funds. • River Lakes Community Church held their third annual Easter service at the amphitheatre with approximately 7,000 attendees, an increase of 2,000 from 2008. • Aera Park opening was held on April 18 with Crongressman McCarthy; Mayor Hall, Councilmembers Couch, Hanson and Scrivner, other representatives of the City, Aera Energy Fund and Bakersfield Southwest Baseball in attendance. • Aera Energy, LLC, held their annual employee picnic utilizing both the park and the amphitheatre for the third year. o Event was attended by 1,030 employees and family. o There were no activities on the stage. • At Dr. Martin Luther King, Jr. Park a community outreach special event was attended by 1,000 citizens. • Other special events include: o Cystic Fibrosis Walk at The Park at River Walk attended by 250 guests o American Lung Association Walk at Yokuts Park attended by 500 guests o SIDS Walk at Yokuts attended by 500 guests o Beale Park, Active Ladies 20/30 Club Easter Egg Hunt attended by 500 guests • Total reservations at all parks, including The Park at River Walk, for April was 212, which were attended by 27,168 guests. AQUATICS: • Attendance at the McMurtrey Aquatic Center totaled 6,293 visitors for the month of April o Five swim meets and two dive meets were held at the aquatic center in April. o Four high school swim teams and nine diving teams continue to practice at this facility. o Bakersfield Swim Club held a swim meet with a total of 127 competitors on April 18. o The 100 Mile Swim Club is currently made up of 247 members who have swum a total of 42,108 miles! A year ago the club had swum a total of 26,396 miles. o The Underwater EGGStravganza was a success with attendance of 338 and kids "hunting" 6,000 eggs! The Department of Recreation and Parks enhances the quality of life through a variety of programs,parks and partnerships. DEPARTMENT OF RECREATION AND PARKS MONTHLY REPORT FOR APRIL 2009 PAGE TWO • High school swim team attendance at Jefferson Pool for the month of April was 2,260. o One swim meet was held at Jefferson Pool, and Garces memorial HS continues to practice there. • High school swim team attendance at Silver Creek Pool for April was 1,105 o Three swim meets were held at Silver Creek Pool o Two high school swim teams continue to practice and compete at Silver Creek Pool • Hiring for summer aquatic staff continued in April. Staff attended the following job fairs: Bakersfield College, Cal State Bakersfield and Kern High School District • The City's aquatic program is the largest American Red Cross Lifeguarding training entity in Kern County, providing training to over nine different agencies spread throughout the county. Lifeguard and Water Safety Instructor trainings increased this to a daily basis. ATHLETICS: • Adult Spring Softball League is now playing at Patriot's Park. o Total attendance in April was: 2,140 players with 1,070 spectators per week for a total of 16,050. • Pee Wee Sports at Jastro Park had 17 participants in soccer, basketball and t-ball. • Beginning Junior Golf Lessons began with 2 participants at the Kern River Golf Course during Easter Break. • League of Dreams adaptive T-ball had 70 participants ranging from the most severely impaired to those with higher functioning abilities playing each week. Volunteer Angels helped each participant play as parents and friends cheered them on. • Celebrate CSUB: Alumni Family and Friends 5K Run/Walk was held on April 25 in collaboration with CSUB PEAK Club and Terrio-Therapy Fitness. o The Department promoted city recreation and parks programs at a booth. o Total attendance was 147 runners/walkers and 200 over-all attendance. • Staff attended the "Obesity Summit-A Call to Action" on April 30 at the Marriot Convention Center. A speaker from Philadelphia presented "From Fat to Fit: The Philadelphia Story" to share their success of getting the community involved in losing weight. The department will be involved in "Kern County's Call to Action — Childhood Obesity Action Plan" in the near future. • Following programs are being offered starting in May: Pee Wee and T-ball leagues ASA Men's "E" Recreation Series Softball Tournament, Summer Softball League, Skateboarding classes and camp, Golf clinics and lessons, Adaptive Ice Skating, Adaptive Tennis Lessons, Basketball Camp, Football Camp, and bowling Camp. • The Beale Band Concerts will begin on May 31. DR. MARTIN LUTHER KING, JR. COMMUNITY CENTER: • The Springtime Egg Hung was coordinated with Stay Focused Ministries, who donated soccer balls and teddy bears to be given away at the hunt and assisted in advertising the event. Over 750 people attended the egg hunt—the largest ever! • The Spring Camp was well attended and the participants had lots of fun with the variety of activities staff planned for them. o Food donated from the Gleaners, Frito Lay and Bold house Farms was used to provide the children a free lunch each day. o Average daily attendance was 70. The Department of Recreation and Parks enhances the quality of life through a variety of programs, parks and partnerships. DEPARTMENT OF RECREATION AND PARKS MONTHLY REPORT FOR APRIL 2009 PAGE THREE • Jim Burke Education Foundation donated $500 dollars and Kern Schools Federal Credit Union donated $300 to the Build-A-Bike program. The money will be used to buy helmets, tools and bike parts. • The South East Neighborhood Partnership meeting was held at MILK on April 30. 35 people attended the meeting and a presentation on specialized phones for qualified individuals. • Camp King will begin June 1, 2009, staff is still coordinating the various events to be offered • Movies in the Park are scheduled to begin in May. Staff will be training Rabobank Arena staff how to set up the movie projector and screen at the Bright House Networks Amphitheatre on May 15. • Total attendance at the Dr. Martin Luther King, Jr. Community Center was 5,022 patrons. This is an increase of 17% over the same time last year! SILVER CREEK COMMUNITY CENTER: • Afterschool Program: The afterschool program was closed the week of April 6-10 due to the Easter Break. With the school year ending, more time has been spent on homework assistance and test preparations. Highlights for the month included celebrating Easter and Spring Break with special arts and crafts projects for their parents. Attendance for Afterschool Program: 260 during the month 15 Average Daily Attendance • Rentals: The Silver Creek Community Center multi-purpose room, pavilion and picnic areas I and II were rented eighteen times during the month of April for an approximate attendance of 1,280. • New Classes: Tai Chi class was a very popular class this past month with a maximum of ten participants per session. Another popular class was Bonsai which had to increase the maximum attendance from 10 to 12 participants to accommodate everyone who wanted to enroll. • Attendance at Silver Creek Center was 2,407 through the month of April. PARKS: • Earth Day 2009 had 200 volunteers who planted 350 15-gallon native trees along the bike path and Aera Park. • Storage facility at The Park at River Walk will be completed in late May. • Park staff assisted AECIM/TRIPS engineers to locate the existing irrigation system on Calloway Drive so the engineers could assess the impact to the irrigation system due to the proposed parkway off ramp alignment. • Trees: Trimmed: 210 Clearance: 409 Removals: 9 UPCOMING EVENTS: • BabyFest at TPRW/BHNA (May 9) • Mill Creek at Central Park Ribbon Cutting/Grand Opening (May 29/30) • Special summer events will begin, such as: o Movies in the Park o Beale Band Concerts o MusicFest o Honda Movie Series, Wednesdays from June 3 —August 19 o Float In Movies Overall attendance at all functions throughout the Department of Recreation and Parks was 61,918, which is an 18% increase in attendance figures as compared to April 2008. The Department of Recreation and Parks enhances the quality of life through a variety of programs,parks and partnerships. Page 1 of 2 STREETS DIVISION — WORK SCHEDULE WEEK OF MAY 11, 2009 — MAY 15, 2009 Resurfacing/Reconstructing streets in the following areas: Working on preparing Masterson Street for an asphalt overlay. Placing an oilsand (cold-mix) overlay on Allen Road between Stockdale Highway & Old Town Road. Placing an oilsand (cold-mix) overlay on Manor Street from Denise Street to the south City limits. Reconstructing streets in the area between So. Laurelglen Boulevard & Olympia Drive, Flagstaff Way & Gallup Drive. Reconstructing streets in the area between Fairfax Road & Shiloh Ranch Road, north of Panorama Drive. Miscellaneous Streets Division protects: Working on the Mill Creek project (on 19th Street). Working on the Saunders Spray Park project. THIS SPACE INTENTIONALLY LEFT BLANK Week of May 11_2009_Work Schedule Page 2 of 2 STREETS SWEEPING SCHEDULE Monday, May 11, 2009 Between So. "H" St. & Union Avenue — Pacheco Rd. & Hosking Rd. Between Stockdale Hwy. & Truxtun Ave. (ext.) — Coffee Rd. & Partridge Ave. Tuesday, May 12, 2009 Between 99 Hwy. & So. "H" St. — Ming Ave. & Panama Ln. Cul-de-sacs on the north side of Magdelena Ave., west of So. "H" St. Wednesday, MaV 13, 2009 City areas between Brundage Ln. & Ming Ave. — So. "H" St. & Union Ave. City areas between Wilson Rd. & Pacheco Rd. — So. "H" St. & Union Ave. Between Casa Loma Dr. & Planz Rd. — Madison Ave. & Cottonwood Dr. Between Planz Rd. & Brook St. — Madison Ave. & Hale St. Thursday, MaV 14, 2009 Between Carr St. & California Ave. — Mohawk St. & Stockdale Hwy. Between Stockdale Hwy. & Marella Way— California Ave. & Montclair St. Between La Mirada Dr. & Chester Ln. — Montclair St. & N. Stine Rd. Between California Ave. (ext.) & Stockdale Hwy. — No. Stine Rd. & 99 Hwy. Between Stockdale Hwy. & Ming Ave. — New Stine Rd. & Ashe Rd. Between Mountain Ridge Dr. & Ashe Rd. — Taft Hwy. & Berkshire Rd. Friday, May 15,-2009 Between Stockdale Hwy. & Ming Ave. — Allen Rd. & Old River Rd. Between Old River Rd. & Coffee Rd. — Ming Ave. & Ridge Oak/Westwold Dr. Between Ridge Oak/Westwold Dr. & White Ln. — Old River Rd., east to the PG&E easement. Between White Ln. & Asperata Dr. — Gosford Rd., west to the PG&E easement. Between White Ln. & Cedarwood Dr. — Stine Rd. & Wilson Rd. (ext.) Week of May 11_2009_Work Schedule San Luis Obispo County's website 104/29/2009 1 Atascadero lays off five, cuts 10 jobs Page 1 of 2 NQ;7nPSda� MeZ 6.?OtR3 Posted on Wed,Apr.29,2009 Atascadero lays off five, cuts 10 jobs Sarah Linn Atascadero officials on Wednesday laid off at least five employees and eliminated an additional 10 positions as a way to close a $775,000 budget gap created by plunging revenues. The Atascadero City Council voted 5-0 on Tuesday to authorize City Manager Wade McKinney to proceed with eliminating jobs "not considered part of the city's core missions."The decision came about a month after McKinney told The Tribune that Atascadero's cost-cutting plans didn't yet include layoffs. Now city staff said the layoffs are necessary to close the gap. "We need to do the right things right now even though they're harder and even though they're not going to be very popular," McKinney said Wednesday. "We need to ... make sure we can live within our means." Atascadero is among the first cities in San Luis Obispo County to implement layoffs as a cost-cutting measure. Arroyo Grande announced plans to lay off two employees earlier this month. However, Grover Beach, Morro Bay, Paso Robles, Pismo Beach and San Luis Obispo have not laid off city employees recently. McKinney said the layoffs were announced and implemented Wednesday afternoon. The city eliminated seven vacant positions and eight occupied positions. Five of those people, who worked in the City Manager's office and in the Community Development and Community Services departments, were immediately placed on a 60-day paid leave period with full benefits. Three other employees—two building inspectors and a maintenance worker—were offered new jobs in the Public Works and Wastewater departments created to meet state wastewater requirements. Two have taken those positions and will not receive paid leave. The third had not decided Wednesday evening. McKinney said the layoffs constitute about 10 percent of all city employee positions. He estimated the total number of full-time equivalent positions at about 135. McKinney said the cuts focused on management, administrative and support positions as well as areas where "work had slowed considerably." Employees who provide "high priority, mission critical services" such as police, fire and parks and street maintenance workers were protected from the layoffs. "We've just come to the place where most of our expenses are in people," said McKinney, adding that labor costs represent 73 percent of the city's total expenses. "You can't cut that much of the budget without cutting people." That worried Bruce Corsaw, field services director for SEIU, Local 620, which represents public employees in Atascadero and across the Central Coast. "I don't want to see anyone—whether they're executives or rank-and-file —lose theirjobs," he said. "That hurts families. That hurts the economy. This is not good." Several Atascadero residents echoed Corsaw's concerns Tuesday night. "Layoffs only add to our problem. They speed up the economic crisis,"said Tom Comar, who's lived in Atascadero since 1986. The layoffs come as the city of Atascadero is facing declines in almost every revenue source, including property taxes, sales taxes and building permits. General Fund revenues for the 2009-2010 fiscal year are expected to be $16.5 million, city staff reported. Coupled with $1 million annually from General Fund reserves, that means a lean budget of$17.5 million. According to McKinney, city staff has already implemented or will http://www.sanluisobispo.com/news/local/v-print/story/702175.html 5/6/2009 San Luis Obispo County's website 04/29/2009 1 Atascadero lays off five, cuts 10 jobs Page 2 of 2 implement about$2.3 million in cost-cutting measures. These include suspending building, equipment and vehicle replacements, ending City Hall's janitorial contract, reducing funding for road repairs and cutting down on office expenses such as paper, bottled water and landscaping. One move, which would have eliminated live and archived online video broadcasts of City Council and Planning Commission meetings, was delayed Tuesday for further discussion after city residents and council members expressed concern over the potential loss of government transparency. McKinney described the layoffs as "a last resort." "I don't want to be in the layoff business but I want to underscore the downturn the economy has taken," he said Tuesday night. "We're heading into those places where we're going to have to make some very tough decisions about how we're going to protect those basic services." ©2009 San Luis Obispo Tribune and wire service sources.All Rights Reserved. http://www.sanluisobispo.com http://www.sanluisobispo.com/news/local/v-print/story/702175.html 5/6/2009 Fremont to lay off about 20 workers - San Jose Mercury News Page 1 of 2 MercuryNews.com Fremont to lay off about 20 The proposed layoffs amount to less than 3 percent of Fremont's estimated 920 full-time equivalent workers positions.That's a much smaller percentage than in 2003,when the city eliminated about 250 positions, about half of which were vacant, Finance Director By Matthew Artz Harriet Commons said. Bay Area News Group Fremont's budget situation worsened in recent Posted:04/28/2009 08:21:03 AM PDT weeks,with news that sales tax and property tax revenue for the final few months of last year came in Updated:04/28/2009 09:07:51 AM PDT lower than city projections. The city's first layoffs in six years will be made in June because of declining revenue, Fremont officials The city now faces estimated deficits of$12.7 said. million this fiscal year,which ends in June,and A $16.3 million next year. However,those figures are About 20 workers will lose their jobs as part of a based on the assumption that city employees,whose budget-balancing plan that proposes eliminating 74 contracts expire in June,will receive 3 percent positions, including about 54 that already are raises. vacant. With revenue expected to remain flat for the No police officers or firefighters will be laid off, foreseeable future,the city has opted to shed although the city isn't ruling out once again rotating positions rather than use the bulk of its reserve fire station closures to reduce firefighter overtime. funds to avoid layoffs. Department overtime amounted to more than$4.6 million last year,according to a city report. "We need to make a structural change in order to Fremont has not yet released a list of positions get the budget back in balance,"Commons said. slated for elimination, nor has it specified what Fremont's fiscal health is predicated on ever- services, if any, might be cut.The largest proportion increasing property and sales tax revenue,which of layoffs will occur among employees who are comprise about two-thirds of city income. But with middle managers,officials said. housing prices and retail sales both falling,city revenue stagnated this year while employees Kunle Odumade,who heads the union representing received raises of up to 6 percent. the managers, said he wouldn't comment on the layoffs until later this week when he expects to have News of Fremont's layoffs comes just one week after a clearer picture of who will lose their jobs. Union City announced that it planned to lay off 22 employees to balance a budget for a city about three About four administrative workers are slated for times smaller than Fremont. Unlike in Fremont, layoffs,said a representative for the Service Union City might have to lay off police officers if it Employees International Union,which represents doesn't receive federal stimulus money, many of the city's non-management office workers. Information on Newark was not available Monday. Advertisement Find local companies rated Highest in Qualit Read rating scores and survey comments of top rated companies. O /lO. O is ,• Q MW j?kedery•$ar sfruiox•7ixs! Go To www.DiamondCertfed.org Print Powered By I°c� rrtCl�rnamics http://www.mercurynews.com/alamedacounty/cl 12244989 5/6/2009 Council decides to lay off 14 city employees -- MercedSunStar.com :: Merced News, Real Estate, Jobs, ... Page 1 of 1 I,II I Tuesday,May.05,2009 Council decides to lay off 14 city employees By SCOTT JASON sjason@mercedsun-star.com Fourteen Merced government employees are slated to be laid off in the coming months, while the rest of the city's work force will pay more to keep top-tier medical coverage, the City Council decided Monday. The layoffs and benefit changes, unanimously approved, will help reduce the $10.2 million budget shortfall the city's faced with. The cuts represent about$1.6 million in savings and nearly 3 percent of the city's work force of 513. "This is not a pleasurable," Councilman Bill Spriggs said, adding that he had a couple concerns. One was that by losing a deputy city attorney the city may be forced to hire an outside attorney later on at a higher cost to handle the additional work. The second was whether the city manager's office could handle losing an assistant since that person supports the council along with other managers. Nine workers -- an urban forestry supervisor, an engineering technician, an account clerk, a code enforcement officer, a deputy city attorney, a city manager assistant, a senior engineer, a capital improvement coordinator and a park worker -- will be let go June 28. Five police officers will leave the city in mid-October, unless it wins a federal grant. No employees or union officials spoke against the layoffs. Before voting, Councilman Jim Sanders told a story about when he was let go and said this is the hardest decision he has to make in office. "It's my hope that a little good luck lands in Merced's lap," Sanders said. The city was initially looking at shedding 52 employees because of steep revenue declines. Sales tax has been declining for six quarters and property tax has fallen 20 percent in the past two years. Besides the cuts, 23 city workers will likely leave early, spurred by a severance package or a golden handshake that adds two years of service. The city has frozen or cut 50 positions in the past 18 months as revenues declined. The budget gap grew larger this year, with 2008's final quarter showing an 18.96 percent decline in the city's sales tax compared with the 2007 fourth quarter. Leaders are planning to pull $2 million from its reserve account to bridge the shortfall. Last year, it relied on about$4.5 million to deal with the shortfall. City staff asked the council in the fall to change the health plan to save money. It failed in the face of fierce opposition from workers. The unions were mixed on the latest proposal with three supporting them and three not taking a stand. "Our budget situation has become clearer and is clearly worse than we thought in October," Assistant City Manager Bill Cahill told the council. The change in health and vision benefits will save between $250,000 and $300,000 -- or what amounts to four jobs. The core coverage was the premium plan and employees could downgrade to save money. Now, the core is lower and employees must buy-up to get the better care. The firefighters union asked that the council revisit the benefits issue in the next six months or include a sunset clause so that the benefits revert back. Detective Keith Pelowski, with the Merced Police Officers Association, said the benefits cut wasn't fair because some employees have to pay more for coverage than others. Some unions negotiated different contribution amounts from the city as part of their contract. "Everyone should pay the cost, not just three (bargaining) units," Pelowski said. In an effort to maintain or even boost the police force, Merced applied for funds from a $1 billion economic stimulus program to help cities retain officers during the recession. The city asked for enough money to keep the five officers and hire another five. The money pays for the base salary and benefits for three years. Leaders should learn in September whether money's on the way. If funding isn't awarded, the officers will be laid off Oct. 18. "We knew this day was coming," said Councilman Joe Cortez, a former police commander. "Now, we have to hope it doesn't last." Reporter Scott Jason can be reached at(209)385-2453 or sjason@mercedsun-star.com. http:ffwww.mercedsunstar.com/167/v-print/story/827745.html 5/5/2009 Page 1 of 1 Editorial THERE'S NO WAY AROUND STOCKTON'S POLICE DEPARTMENT LAYOFFS, DEMOTIONS By The Keca►•d May 04,2009 The other shoe has dropped in Stockton's attempt to address a$31 million city budget deficit: Layoff notices went out Friday to 55 police officers,seven officers were demoted, and 35 civilian employees were notified their jobs are ending.All this happens June 30. There simply is no other way to balance the budget than to make deep, hurtful cuts in the Police and Fire departments. Here are the breathtaking numbers, as laid out Thursday by City Manager Gordon Palmer:Without cuts,the Police and Fire Departments will cost about$156 million next year.Officials have estimated city income next year at$160 million. Without cuts to fire and police,the city will be forced to close virtually every other city service:water,sewer, community centers,street repairs and cleaning,and on and on and on.City Hall itself would be shuttered. "We don't take this lightly,"Mayor Ann Johnston told The Record's editorial board. "This is very,very serious." The city is trying to encourage retirements across city government,especially in the Police and Fire Departments. The retirement of one senior police officer would save 11/2 or more jobs for younger officers who make much less money. For that reason,final layoff numbers won't be known for some time. Also clouding the issue are negotiations between the city and the unions representing police revolving around contractual pay raises on the one hand,and pay and benefit concessions on the other. It was a deadlock between the city and the Stockton Police Officers Association that triggered the layoff notices.The ongoing dispute is about how much of a raise officers are owed in addition to a 9.5 percent increase authorized last year. It's crazy.A 9.5 percent raise when other employees, public and private, are being fired or furloughed or having their hours, pay and benefits cut?They want more, but what they're about to get is fewer fellow officers on the job. There's a similar hangup in the Fire Department,which early on got in front of this issue by agreeing to defer about $10 million in pay in exchange for a city promise that no firefighters would be laid off and no stations closed.Things have changed drastically since December.And the firefighters'position has hardened,as in:"We've given enough." Of course,they haven't, and neither have the police.The two numbers above make that about as clear as any numbers can make it. "We're not trimming dead wood anymore,"Vice Mayor Kathy Miller told the editorial board."We're lopping off big branches." That was written on the face of a somber Blair Ulring,the interim police chief, as he explained to the editorial board how he's wrestling with how to stretch what will be 345 sworn officers to do the work now handled by 400. This is not easy. The residents of Stockton don't like it, concerned as they are about public safety. The police officers and firefighters don't like it, because in their view their contracts are being unilaterally tossed out the window.And they also know what it's like to answer a dangerous call or walk into a burning building alone. City Hall officials and council members don't like it, because they stare at the raw budget numbers daily, understand the consequences of these unavoidable cuts and catch hell from residents and city employees alike for the decisions they're forced to make. There is no way around massive cuts-cuts that likely will only get deeper in the months ahead. http://www.recordnet.com/apps/pbcs.dll/article?AID=/20090504/A OPINIONOI/905040303/-1/A OPINI... 5/4/2009 B A K E R S F 1 E L D CITY OF BAKERSFIELD PUBLIC WORKS DEPARTMENT MEMORANDUM TO: Alan Tandy, City Manager MAY 05 2009 FROM: Raul Rojas, Public Works Director'�r DATE: April 24, 2009 -. SUBJECT: TRAFFIC FLOW AT CASA LOMA AND LOTUS LANE Referral No. 88 COUNCILMEMBER CARSON REQUESTED STAFF LOOK INTO TRAFFIC FLOW PROBLEMS ON CASA LOMA AND LOTUS LANE AND DETERMINE IF THE ROADWAY IS WIDE ENOUGH TO HANDLE TRAFFIC FLOW FROM THE NEW APARTMENT COMPLEX. Traffic Engineering will schedule a review of traffic flow in the area. Data will need to be collected using automatic hose counter equipment to determine the amount of traffic on the roadways. This evaluation is expected to take about 4 to 6 weeks for completion. G:\GROUPDAT\Refemals\2009\4-22\#88 Traffic Flow.doc ;�f 0 B A K E R S F 1 E L D CITY OF BAKERSFIELD SAY 0 5QO PUBLIC WORKS DEPARTMENT MEMORANDUM TO: Alan Tandy, City Manager FROM: Raul Rojas, Public Works Director DATE: April 29, 2009 SUBJECT: MEDIAN CLEANUP ON HWY 99 RAMP Referral No. 85 COUNCILMEMBER SULLIVAN REQUESTED STAFF CLEAN UP THE MEDIAN ON MING AVENUE AT THE NORTHBOUND RAMP OF HWY 99. Caltrans is responsible for maintenance of the median on the north bound ramp on Highway 99 at Ming Avenue. Staff contacted Caltrans on 4-29-09 to report Councilmember Sullivan's request. G:\GROUPDAT\Referrals\2009\4-22\#85 Median Cleanup.doc i 0--1�44 B A K E R S F 1 E L D CITY OF BAKERSFIELD PUBLIC WORKS DEPARTMENT '. MEMORANDUM AY Q5 200 TO: Alan Tandy, City Manager FROM: Raul Rojas, Public Works Director DATE: April 29, 2009 SUBJECT: STREET REPAIR ON PLANZ BETWEEN AKERS AND WIBLE Referral No. 86 COUNCILMEMBER SULLIVAN REQUESTED STAFF REPAIR POTHOLES ON PLANZ ROAD BETWEEN AKERS AND WIBLE. All potholes on Planz Road between Akers Road and Wible Road were patched on Monday, April 27, 2009. G:\GROUPDAT\Referrals\2009\4-22\#86 Street Repair.doe O� B°�� RKE�S.� 4 BAKERSFIELD POLICE ' MEMORANDUM -IF OR��P TO: ALAN TANDY, CITY MANAGER FROM: W. R. RECTOR, CHIEF OF POLICE DATE: April 30, 2009 SUBJECT: Policy on Retrieval of Dead Animals Council Referral No. 87 (Ward 6) Council Member Sullivan requested staff provide the City's policy for weekday and weekend retrieval of dead animals. Council Member Sullivan's request was referred to the Operations Division for response. The following is Animal Control Protocol/Prioritization for calls for service: Priority 1 - Injured but alive animals/Cruelty to animals Priority 2 - Vicious Animals and including bites Priority 3 - Live confined animals Priority 4 - Dead animals Priority 5 - Stray animals Priority 6 - Noisy Animals Please feel free to call me if you have questions. WRR/LM/vrf