HomeMy Public PortalAbout2016.161 (07-19-16)RESOLUTION NO. 2016 -161
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD
UNANIMOUSLY DECLARING A FISCAL EMERGENCY IN THE CITY OF LYNWOOD
WHEREAS, City staff has advised the City Council and Lynwood community of
the City's ongoing structural deficit. A combination of circumstances has resulted in
projected deficits far beyond the City's capacity to absorb them; and
WHEREAS, the City's flat revenue growth continues to be offset by rising
operating costs; and
WHEREAS, beginning in FY 08, the City began implementing a series of General
Fund budget reductions. Since that time (with the exception of FY 13 due to the receipt
of one -time revenue), expenditures have exceeded revenues and required the use of
reserves to balance the General Fund; and
WHEREAS, since FY 08, General Fund expenditures have been cut by over $6.5
million (or 19 %): Most cuts are the result of labor reductions. The City cannot sustain
further staffing cuts and maintain services for a quality community; and
WHEREAS, to assist the Council in closing the City's structural deficit, in
December 2012, City staff (through labor negotiations) agreed to labor concessions
including furloughs, suspension of the auto allowance, 6% EPMC Pick -Up, elimination
of reportable compensation, cash in lieu of benefits, and elimination of Green Building
Certificate Pay; and
WHEREAS, as part of the FY 16 Budget Adoption, several budget cuts were
made to reduce $2.5 million deficit to $377K; and
WHEREAS, based on FY 16 year -end estimates, the ending General Fund
balance will be $3.6 million. The FY 17 Proposed Budget contains a structural deficit in
excess of $2.9 million that, absent new General Fund revenue, can only be met by
decreasing Public Safety and other essential services.
WHEREAS, the City has used its available General Fund balance to bridge the
structural budget deficit, meaning it will have used nearly all General Fund reserves
before the end of FY 17 and will not have enough revenue to cover proposed
expenditures, maintain current service levels, and meet the City's reserve policy.
WHEREAS, by cutting City staff and services to the bare minimum necessary to
preserve the public health, safety and welfare, and drawing down the City's General
Fund balance, the Council has been able to prevent the City from running out of money
in the General Fund. However, it is now evident that future General Fund revenue is no
longer sufficient to maintain minimum staff and service levels; and
WHEREAS, as a result, maintenance of roads, parks, and other public facilities
must be indefinitely deferred. Concerned that further long -term reduction of service
levels will have a detrimental ;effect on the public health, safety, and welfare, the City
must increase General Fund revenue sufficiently to enable the City to restore the levels
of public services sought by the resident of the City; and
WHEREAS, at this point, the City has taken all reasonable steps available to
reduce spending and still has not been able to bring expenditures in line with anticipated
revenues; further spending reductions will require more dramatic cuts to essential public
services that will result in threats to the general health, safety, and welfare of the
residents of and businesses in Lynwood; and
WHEREAS, the City has worked effectively to increase financial stability,
transparency, and accountability,. but still faces more cuts to essential City services.
Without additional revenue, the City will be forced to consider Public Safety and staffing
cuts. Further reductions in service levels would mean continuing to allow the City's
parks, roads, facilities, landscaping, and street trees to deteriorate, jeopardizing the
public health, safety, and welfare, and increasing the costs of maintaining basic
infrastructure: and
WHEREAS, additional funding from a Penny Ballot Measure is needed for near
and long term financial stability; and
WHEREAS, under California Constitution Article 13C, Section 2(b), when a city
council proposes a general tax to the voter, the measure must be submitted to the
electors at a regularly scheduled general election at which members of the Council will
be elected, unless the Council finds that there is an emergency that justifies placing the
proposed tax before the voters at a special election. Since the November 8, 2016 ballot
does not include the election of a member of the City Council, the City Council must
unanimously declare an emergency.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF LYNWOOD DOES
HEREBY FIND, ORDER, AND RESOLVE AS FOLLOWS:
Section 1. The City is experiencing an existing and immediate funding crisis,
which is the result of factors largely outside of its control, including rapid increases in
the cost of employee retirement and health insurance benefits, flat revenue from
existing taxes and fees, LA County Public Safety contract increases, and unpredictable
State takeaways of local revenue; and
Section 2. The City has taken significant steps to reduce its operational costs.
It has eliminated over 72 (or 28 %) full -time employees since FY 08.
Section 3. The City has used its available General Fund balance to bridge the
structural budget deficit, meaning it will have used nearly all General Fund reserves
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before the end of FY 17 and will not have enough revenue to cover proposed
expenditures, maintain current service levels, and meet the City's reserve policy; and
Section 4. Because of changes in State law, particularly the approval of
Propositions 62 and 218, the City has very few means available for increasing General
Fund revenue.
Section 5. Absent a new source of General Fund revenue, the City's ability to
maintain staff and service levels is uncertain. Based on FY 16 year -end estimates, the
ending General Fund balance will be $3.6 million. The FY 17 Proposed Budget
contains a structural deficit in excess of $2.9 million that, absent new General Fund
revenue, can only be met by decreasing Public Safety and other essential services.
Section 6. Unless service levels are at least partially restored, public facilities
and property will not be properly maintained, public safety standards will degrade, crime
and violence will increase, the community will not have adequate and safe recreational
opportunities, businesses and families will be discouraged from moving to or remaining
in Lynwood, and the health, safety, and welfare of the residents of Lynwood will be
endangered.
Section 7. Because of that threat to the public health, safety, and welfare, an
emergency exists in the City, as the term "emergency" is used in Article XIIIC, section
2(b) of the California Constitution. The City must immediately address that emergency
by ensuring that the City has the resources necessary to preserve the public health,
safety, and welfare.
Section 8. The identified emergency necessitates that the City Council submit
a tax measure to the voters of Lynwood at the November 8, 2016 election, even though
such an election would not be consolidated with a general election for a member of the
Council.
Section 9. Accordingly, the City Council of the City of Lynwood unanimously
finds and declares the existence of a fiscal emergency within the City of Lynwood.
Section 10. This Resolution shall take effect immediately upon adoption.
Section 11. The City Clerk shall certify as to the adoption of this City Council
Resolution and enter it into the book of original Resolutions.
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PASSED, APPROVED AND ADOPTED THIS 19th DAY OF JULY, 2016.
ATTEST:
Maria Quinonez, City Clerk
APPROVED AS TO FORM:
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David A. Garcia, City Attorney
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Edwin Hernandez, or
APPROVED AS TO CONTENT:
J. Arnoldo Beltran, City Manager
STATE OF CALIFORNIA )
) SS.
COUNTY OF LOS ANGELES )
I, Maria Quinonez, the undersigned, City Clerk of the City of Lynwood, do hereby certify
that the foregoing Resolution was passed and adopted by the City Council of the City of
Lynwood at a regular meeting held on the 19th day of July, 2016, and passed by the
following vote:
AYES: COUNCIL MEMBERS ALATORRE, SANTILLAWBEAS, SOLACHE,
CASTRO AND MAYOR HERNANDEZ
NOES: NONE
ABSENT: NONE
ABSTAIN: NONE
Maria Quinonez, City Clerk
STATE OF CALIFORNIA )
) SS.
COUNTY OF LOS ANGELES )
I, Maria Quinonez, the undersigned, City Clerk of the City of Lynwood, and the Clerk of
the City Council of said City, do hereby certify that the above foregoing is a full, true and
correct copy of Resolution No. 2016.161 on file in my office and that said Resolution
was adopted on the date and by the vote therein stated. Dated this 19th day of July,
2016.