HomeMy Public PortalAbout2006-172 (09-19-06)RESOLUTION NO. 2006.172
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LYNWOOD
SUPPORTING PROPOSITIONS 1A, 1B, 1C, 1D, 1E AND PROPOSITION 84 ON THE
NOVEMBER 2006 BALLOT
WHEREAS, the City of Lynwood is responsible for building and maintaining
infrastructure essential to building and preserving the economic and social well-being of
' ~ the residents and businesses of this City; and
WHEREAS, infrastructure includes roadways, public transit systems, bike lanes,
and other transportation systems, schools, affordable housing, drinking water and
sewage treatment systems, parks and other amenities; and
WHEREAS, the City has grown by 12,000 people over the past decade, and is
projected to grow by an additional 5,000 people over the next 4 years, creating new
pressures on the City to expand and improve basic infrastructure to meet the needs of
all residents; and
WHEREAS, the City currently maintains 90 miles of existing streets, and has
adopted a capital improvement plan that estimates the cost of fulfilling this responsibility
to be approximately $10 million for 5 years. There is a growing need to expand
investment in streets, transit systems, bike lanes, infill and transit-oriented housing, and
other improvements to meet the needs of a growing city; and
WHEREAS, school population in this city has grown by 18,001 over the past
decade and is expected to continuously grow, and the Lynwood School District will need
funding to meet infrastructure needs; and
WHEREAS, the City estimates that it needs 600 units of new housing by 2010,
estimated to cost $240 million; and
'~ WHEREAS, the City's drinking water and sewer systems are in need of
upgrading and expansion to serve the current and growing needs of the this city, and
these repairs and upgrades are estimated to cost $23 million; and
WHEREAS, the City's recreational facilities are in need of upgrade and repair,
estimated to cost $12 million; and the city estimates that it needs $25 million to invest in
new parks and other recreational facilities to meet the needs of the City's growing
population;
WHEREAS, the California State. Legislature passed a $37.3 billion package of
fiscal and bond measures to provide funding for housing, transportation, levee repairs
and flood control projects and education facilities in May 2006; and
WHEREAS, an additional bond measures to raise funds for clean water, parks
and coastal protection has been placed on the ballot through the initiative process by a
coalition of business, public health, local government and environmental organizations;
and
r„^ WHEREAS, these measures have been titled Propositions 1A, 16, 1C, 1D, 1E
and 84 by the Secretary of State and will be placed on the November 2006 ballot for
voter approval; and
WHEREAS, Proposition 1A will close a loophole and ensure that gas tax revenue
from Proposition 42, passed by voters in 2002, is only spent on transportation
improvement projects, as originally intended; and the City's annual share of the
Proposition 42 funds, to be used for repair and maintenance of existing streets, is
estimated to be $600,000; and
WHEREAS, Proposition 1 B will provide up to $20 billion on various transportation
projects to rebuild California, of which $1 billion will go to cities and counties for local
streets and roads improvement projects; and
WHEREAS, Proposition 1 C will provide $2.8 billion for housing projects,
including $1.35 billion that helps cities address housing-related infrastructure issues,
consisting of $850 million in grants for development of public infrastructure projects that
facilitate or support infill housing construction, $200 million for parks, and $300 million
for development near public transportation; and
WHEREAS, Proposition 1 D will improve Califorhia's school system by providing
$10 billion for performing school building repairs and providing innovative learning
facilities for Californian students, including seismic retrofitting and classroom repairs;
and
WHEREAS, Proposition 1 E will provide $4 billion for critical river levee repair and
construction, as well as flood control projects and the updating and repair of old water
mains and sewage systems; and
WHEREAS, Proposition 84 would provide $5.4 billion for improving natural
resources and water programs including state projects and grants for flood control, safe
drinking water, improving water quality, integrated water management, water planning,
sustainable communities; and
WHEREAS, the League of California Cities is in strong support of Propositions
1A - 1E and 84, and views this package of measures as being providing critically
needed resources for California cities.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF LYNWOOD that the City hereby expresses its strong support for Propositions 1A,
1 B, 1 C, 1 D, 1 E and 84 which will be presented for voter approval on the November
2006 statewide ballot.
Section 1. That this resolution shall go into effect immediately upon adoption.
Section 2. That the City Clerk is hereby directed to send a copy of this
resolution to the Executive Director of the League of California Cities.
ADOPTED this 19~h day of September, 2006.
ATTEST:
ANDREA L. HOOPER,
CITY CLERK
APPROVED AS TO FORM:
Gz-~~.~~~~_
. ARNOLDO BELTRAN,
ITY ATTORNEY
LETICIA VASOU AY
NR U R I
CITY ANAGER
PPROVED TO CONTENT:
C-
AUTRA C. ADAMS,
ASSISTANT TO THE CITY MANAGER
'~.
STATE OF CALIFORNIA )
SS.
COUNTY OF LOS ANGELES )
I, the undersigned, City Clerk of the City of Lynwood, do hereby certify that the
r^ 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 SEPTEMBER , 2006.
AYES: COUNCILMEMBERS, BYRD, JOHNSON, PEDROZA, SANTILLAN, AND VASQUEZ
NOES: NONE
ABSENT: NONE
ABSTAIN: NONE
(s,~u~, off, ,~
Andrea. L. Hooper, City C erk
STATE OF CALIFORNIA )
SS.
r- .COUNTY OF LOS ANGELES )
I, 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. 2006.172 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 SEPTEMBER , 2006.
Andrea L. Hooper, City Clerk
Legislative Analyst's Office
7/20/06 10:00 AM
FINAL
Proposition IA
Transportation Funding Protection. Legislative Constitutional
Amendment.
Background
California spends about $20 billion a year to maintain, operate, and improve its
highways, streets and roads, passenger rail, and transit systems. About one-half of the
funding comes from various local sources, including local sales and property taxes, as
well as transit fares. The remainder comes from the state and federal levels, largely from
gasoline and diesel fuel taxes, and truck weight fees.
Currently, the state levies two types of taxes on motor fuels:
• An excise tax of 18 cents per gallon on gasoline and diesel fuel. (This is
generally referred to as the gas tax.)
• A statewide 6 percent tax on the sale of gasoline and diesel fuel ("sales tax').
Gas Tax. Revenues from the state excise tax on gasoline and diesel fuel used on
public roads total about $3.4 billion per year. The State Constitution restricts the use of
these revenues to specific transportation purposes. These include constructing,
maintaining, and operating public streets and highways, acquiring right of way and
constructing public transit systems, as well as mitigating the environmental effects of
these facilities.
Sales Tax. The state's sales tax on gasoline and diesel fuel currently provides about
$2 billion a year. Unti12002, most of the revenues from the state sales tax on gasoline
were not used for transportation purposes. Instead, these revenues were used for
various general purposes including education, health, social services, and corrections.
Proposition 42, which was approved by voters in 2002, amended the State Constitution
to dedicate most of the revenue from the sales tax on gasoline to transportation uses.
Specifically, Proposition 42 requires those revenues that previously went to the General
Fund be transferred to the Transportation Investment Fund to provide for
improvements to highways, streets and roads, and transit systems. Proposition 42,
however, allows the transfer to be suspended when the state faces fiscal difficulties.
Proposition 42 is silent as to whether suspended transfer amounts are to be repaid to
transportation.
Since 2002, the state has suspended the Proposition 42 transfer twice because of the
state's fiscal condition. In 2003-04, the transfer was suspended partially, and in 2004-05,
the full amount of the transfer was suspended. Existing law requires that these
suspended amounts, with interest, be repaid to transportation by 2008-09 and 2007-08,
respectively.
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Proposal
'This measure amends the State Constitution to further limit the conditions under
which the Proposition 42 transfer of gasoline sales tax revenues for transportation uses
can be suspended. Specifically, the measure requires Proposition 42 suspensions to be
treated as loans to the General Fund that must be repaid in full, including interest,
within three years of suspension. Furthermore, the measure only allows suspension to
occur twice in ten consecutive fiscal years. No suspension could occur unless prior
suspensions (excluding those made prior to 2007-OS) have been repaid in full.
In addition, the measure lays out a new schedule to repay the Proposition 42
suspensions that occurred in 2003-04 and 2004-05. Specifically, the suspended amounts
must be repaid and dedicated to transportation uses no later than June 30, 2016, at a
specified minimum annual rate of repayment.
Fiscal Effects
This measure would have no direct revenue or cost effect. By limiting the frequency
and the conditions under which Proposition 42 transfers maybe suspended in a ten-
year period, the measure would make it more difficult to use Proposition 42 gasoline
sales tax revenues for nontransportation purposes when the state experiences fiscal
difficulties. As a result, the measure would increase the stability of funding to state and
local transportation in 2007 and thereafter. However, the state's authority to direct i
available funds to meet other nontransportation priorities in the event the state faces II~JI
fiscal difficulties would be somewhat reduced.
.-.
1.~J
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Legislative Analyst's Office
7/20/06 10:00 AM
(~,I FINAL
IL Proposition 1 B
The Highway Safety, Traffic Reduction, Air Quality, and Port Security
Bond Act of 2006
Background
California spends about $20 billion a year from a combination of state, federal, and
local funds to maintain, operate, and improve its highways, streets and roads,
passenger rail, and transit systems. These expenditures are primarily funded on a pay-
as-you-go basis from taxes and user fees.
There are two primary state tax sources that fund state transportation programs.
First, the state's 18 cent per gallon excise tax on gasoline and diesel fuel (generally
referred to as the gas tax) generates about $3.4 billion annually. Second, revenues from
the state sales tax on gasoline and diesel fuel currently provide about $2 billion a year.
Additionally, the state imposes weight fees on commercial vehicles (trucks), which
generate roughly $900 million a year. Generally, these revenues must be used for
specific transportation purposes, including improvements to highways, streets and
roads, passenger rail, and transit systems. These funds may also be used to mitigate the
environmental impacts of various transportation projects. Under specified conditions,
these revenues maybe loaned or used for nontransportation uses.
Since 1990, voters have approved roughly $5 billion in state general obligation
bonds to fund transportation. These bond proceeds have been dedicated primarily to
passenger rail and transit improvements, as well as to retrofit highways and bridges for
earthquake safety. As of June 2006, all but about $355 million of the authorized bonds
have been spent on projects.
In addition to state funds, California's transportation system receives federal and
local money. The state receives about $4.5 billion a year in federal gasoline and diesel
fuel tax revenues for various transportation purposes. Collectively, local governments
invest roughly $9.5 billion annually into California's highways, streets and roads,
passenger rail, and transit systems. This funding comes mainly from a mix of local sales
and property taxes, as well as transit fares. Local governments have also issued bonds
backed mainly by local sales tax revenues to fund transportation projects.
Proposal
This measure authorizes the state to sell about $20 billion of general obligation
bonds to fund transportation projects to relieve congestion, improve the movement of
goods, improve air quality, and enhance the safety and security of the transportation
system. (See "An Overview of State Bond Debt" for basic information on state general
obligation bonds.)
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Legislative Analyst's Office
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Figure 1 summarizes the purposes for which the bond money would be used. The
bond money would be available for expenditure by various state agencies and for
grants to local agencies and transit operators upon appropriation by the Legislature:
• Congestion Reduction, Highway and Local Road Improvements-
$11.3 billion-for capital improvements to reduce congestion and increase
capacity on state highways, local roads, and public transit for grants available
to locally funded transportation projects, as well as for projects to rehabilitate
state highways and local roads.
• Public Transportation-$4 billion-to make capital improvements to local
transit services and the state's intercity rail service. These improvements
would include purchasing buses and rail cars, as well as making safety
enhancements to existing transit facilities.
• Goods Movement and Air Quality-$3.2 billion-for projects to improve the
movement of goods-through the ports, on the state. highway and rail
systems, and between California and Mexico-and for projects to improve air
quality by reducing emissions related to goods movement and replacing or
retrofitting school buses.
• Safety and Security-$1.5 billion-for projects to increase protection against a
security threat or improve disaster response capabilities on transit systems; as
well as for grants to improve the safety of rail crossings to seismically retrofit
local bridges, ramps, and overpasses; and to improve security and disaster
planning in publicly owned ports, harbors, and ferry terminals.
Page 2 of 3
Legislative Analyst's Office
7/20/06 10:00 AM
FINAL
Figure 1
Proposition 1 B
Uses of Bond Funds
Amounts
(In Millions)
.Congestion Reduction,. Highway and Local Road Irnprovements' $71,250
Reduce congestion on state highways and major access routes $4,500
Increase highways, roads, and transit capacity 2,000
Improve local roads 2,000
Enhance State Route 99 capacity, safety, and operations 1,000
Provide grants for locally funded transportation projects 1,000
Rehabilitate and improve operation of state highways and local roads 750
Public Transportation ~ - $4,000 .
Improve local rail and transit services, including purchasing vehicles $3,600
and right of way
Improve intercity rail, including purchasing railcars and locomotives 400
Goods Movement and Air t]uality S3,200
Improve movement of goods on state highways and rail system, and $2,000
in ports
Reduce emissions from goods movement activities 1,000
Retrofit and replace school buses 200
Safety and Security ~ - $7,475
Improve security and facilitate disaster response of transit systems $1,000
Provide grants to improve railroad crossing safety 250
Provide grants to seismically retrofit local bridges and overpasses 125
Provide grants to improve security and disaster planning in publicly 100
owned ports, harbors, and ferry facilities
Fiscal Effects
Bond Costs. The costs of these bonds would depend on interest rates in effect at the
time they are sold and the time period over which they are repaid. The state would
likely make principal and interest payments from the state's General Fund over a
period of about 30 years. If the bonds are sold at an average interest rate of 5 percent,
the cost would be about $38.9 billion to pay off both the principal ($19.9 billion) and
interest ($19.0 billion). The average repayment for principal and interest would be about
$1.3 billion per year.
Operational Costs. The state and local governments that construct or improve
transportation infrastructure with these bond funds (by, for example, building roads
and bridges or purchasing buses or railcars) will incur unknown additional costs to
operate and maintain them. A portion of these costs would be offset by revenues
generated by the improvements, such as transit fares and tolls.
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Legislative Analyst's Office
7/20/2006 3:00 PM
FINAL
Proposition iC
Housing and Emergency Shelter Trust Fund Act of 2006
Background
About 200,000 houses and apartments are built in California each year. Most of these
housing units are built entirely with private dollars. Some units, however, receive
subsidies from federal, state, and local governments. For instance, the state provides
low-interest loans or grants to developers (private, nonprofit, and governmental) to
subsidize housing construction costs. Typically, the housing must be sold or rented to
Californians with low incomes. Other state programs provide homebuyers with direct
financial assistance to help with the costs of a downpayment.
While the state provides financial assistance through these programs, cities and
counties are responsible for the zoning and approval of new housing. In addition, cities,
counties, and other local governments are responsible for providing infrastructure-
related services to new housing-such as water, sewer, roads, and parks.
In 2002, voters approved Proposition 46, which provided a total of $2.1 billion of
general obligation bonds to fund state housing programs. We estimate that about
^~ $350 million of the Proposition 46 funds will be unspent as of November 1, 2006.
Proposal
This measure authorizes the state to sell $2.85 billion of general obligation bonds to
fund 13 new and existing housing and development programs. (See "An Overview of
State Bond Debt" for basic information on state general obligation bonds.) Figure 1
describes the programs and the amount of funding that each would receive under the
measure. About one-half of the funds would go to existing state housing programs. The
development programs, however, are new-with details to be established by the
Legislature. The major allocations of the bond proceeds are as follows:
Development Programs ($1.35 Billion). The measure would fund three new
programs aimed at increasing development. Most of the funds would be
targeted for development projects in existing urban areas and near public
transportation. The programs would provide loans and grants for a wide
variety of projects, such as parks, water, sewage, transportation, and housing.
Homeownership Programs ($625 Million). A number of the programs funded
by this measure would encourage homeownership for low- and moderate-
income homebuyers. The funds would be used to provide downpayment
assistance to homebuyers through low-interest loans or grants. Typically,
eligibility for this assistance would be based on the household's income, the
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Legislative Analyst's Office
7/20/2006 3:00 PM
FINAL ~ 1
Multifamily Housing Programs ($590 Million). The measure also would fund
programs aimed at the construction or renovation of rental housing projects,
such as apartment buildings. These programs generally provide local
governments, nonprofit organizations, and private developers with low-interest
(3 percent) loans to fund part of the construction cost, hi exchange, a project
must reserve a portion of its units for low-income households for a period of 55
years. This measure gives funding priority to projects in already developed areas
and near existing public services (such as public transportation).
Other Housing Programs ($285 Million). These funds would be used to
provide loans and grants to the developers of homeless shelters and housing
for farmworkers. In addition, funds would be allocated to pilot projects
aimed at reducing the costs of affordable housing.
cost of the home being purchased, and whether it is the household's first
home purchase.
~I
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~I
Figure 1
Proposition 1 C
Uses of Bond Funds
Amount
Qn Millions)
' DevelopmeritPrograms
Development in Grants for various projects-includingparks, $850
urban areass water, sewer, transportation, and
environmental cleanup-to facilitate urban
"infill"
development.
Development near Grants and loans to local governments and 300
public developers to encourage more dense
transportations development near public transportation.
Parksa Grant funding for parks throughout the state. 200
$1,350
_Homeownership Programs .
Low-income Variety of homeownership programs for low- $290
households income households.
Downpayment Deferred low-interest loans up to 6 percent of 200
assistance home purchase price for first-time low- or
moderate-income homebuyers.
Local governments Grants to local governments which reduce 125
barriers to affordable housing. Funds would be
used for homebuyer assistance.
Self-help Grants to organizations which assist low- or 10
construction moderate-income households in building or
renovating their own homes.
$625
Multifamily Housing Programs
Multifamily housing Low-interest loans for housing developments $345
for low-income renters.
Supportive housing Low-interest loans for housing projects which 195
also provide health and social services to low-
income renters.
Homeless youth Low-interest loans for housing projects which 50
provide housing for homeless young people.
$590
Other Housing Programs.
Farmworker Low-interest loansandgrants for developing $135
housing housing for farmworkers.
Pilot programse Grants and loans for pilot projects to develop 100
housing at reduced costs.
Homeless shelters Grants for developing homeless shelters. 50
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$285
a New program.
The funds would be allocated over a number of years. The measure provides the
Legislature broad authority to make future changes to these programs to ensure their
effectiveness.
Fiscal Effect
Bond Costs. The cost to pay off these bonds would depend primarily on the
following two factors.
Payment Period. The state would likely make principal and interest
payments on the bonds from the state's General Fund over a period of about
30 years.
Interest Rate. Usually, the interest on bonds issued is exempt from both state
and federal taxes because the bonds are for public purposes. This results in
lower debt service payments for the state. Some programs proposed by this
measure, however, would not be eligible for the federal tax exemption-
resulting in a higher interest rate. This is because the housing programs
provide funds for private purposes. (We estimate this would be the case for
about 60 percent of the bonds.)
If the federally taxable bonds were sold at an average rate of 6.5 percent and the
remaining bonds at an average rate of 5 percent, the cost to the state would be about
$6.1 billion to pay off both the principal ($2.85 billion) and the interest ($3.3 billion). The
average payment would be about $204 million each year.
Administrative Costs. The Department of Housing and Community Development
and the California Housing Finance Agency would experience increased costs to
administer the various housing and urban development programs. A portion of the
programs' allocations-probably between $100 million and $150 million of the total
bond funds-would be used to pay these administrative costs over time.
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I
I
Legislative Analyst's Office
7/24/2006 2:40 PM
FINAL
Proposition 1D
Kindergarten-University Public Education Facilities Bond Act of 2006
Background
Public education in Califomia consists of two systems. One system includes about
1,000 local school districts that provide education from kindergarten through grade 12
(K-12") to about 6.3 million students. The other system (commonly referred to as
"higher education") includes the California Community Colleges (CCC), the California
State University (CSU), and the University of California (UC). These three higher
education segments provide education beyond grade 12 to a total of about 2.1 million
students.
K-12 School Facilities
Through the School Facility Program (SFP), K-12 school districts apply for funding
to buy land, construct new buildings, and modernize (that is, renovate) existing
buildings. A school district's allocation is based on a formula. The formula considers the
number of students a district expects to enroll that cannot be served in existing facility
space. The SFP requires the state and school districts to share the cost of facilities. For
new construction projects, the cost is shared equally by the state and school districts.
For modernization projects, the state pays 60 percent and school districts pay 40 percent
of the cost. If a school district faces unusual circumstances, however, it may apply for
"hardship" funding from the state to offset its local share of costs.
Major Funding Sources. As described below, funding for school facilities comes
mostly from state and local general obligation bonds. (See "An Overview of State Bond
Debt" for more information on these bonds.)
• State General Obligation Bonds. The state has funded the SFP by issuing
general obligation bonds. Over the past decade, voters have approved a total
of $28.1 billion in state bonds for K-12 school facilities. Approximately
$3 billion of these funds remain available for new construction projects.
• Local General Obligation Bonds: At the local level, school districts typically
meet most of their matching requirement and other construction needs by
issuing local general obligation bonds. These local bonds can be authorized
with the approval of 55 percent of the voters in the district. The bonds are
repaid using local property tax revenue. Over the past ten years, school
districts have received voter approval to issue more than $41 billion in local
facility bonds.
Although school facilities currently are funded mostly from state and local general
obligation bonds, school districts also receive funds from:
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Developer Fees. State law allows school districts to impose developer fees on
new construction. These fees are levied on new residential, commercial, and
industrial developments. Although they contribute a moderate amount
statewide compared to general obligation bond proceeds, developer fees vary
significantly by community depending on the amount of local development.
In fast-growing areas, they can make notable contributions to K-12 school
construction.
Special Local Bonds (Known as "Mello-Roos" Bonds). School districts also
may form special districts to sell bonds for school construction projects. (A
special district generally does not encompass the entire school district.) The
bonds, which require two-thirds voter approval, are paid off by property
owners located within the special district. Over the past decade, Mello-Roos
bonds have provided school districts with a total of $3.7 billion in facility
funding.
Higher Education Facilities
California's system of public higher education includes 142 campuses in the three
segments listed below:
• The CCCs provide instruction to about 1.5 million students at 109 campuses
operated by 721ocally governed districts throughout the state. The
community colleges grant associate degrees, offer a variety of technical career
courses, and provide general education coursework that is transferable to
four-year universities.
• The CSU has 23 campuses, with an enrollment of about 420,000 students. The
system grants bachelor degrees, master degrees, and a small number of
specified doctoral degrees.
• The UC has nine general campuses, one health sciences campus, and various
affiliated institutions, with total enrollment of about 210,000 students. This
system offers bachelor, master, and doctoral degrees, and is the primary state-
supported agency for conducting research.
Over the past decade, the voters have approved $6.5 billion in state general
obligation bonds for capital improvements at public higher education campuses.
Virtually all of these funds have been committed to specific projects. The state also has
provided about $1.6 billion in lease revenue bonds (authorized by the Legislature) for
this same purpose.
In addition to these state bonds, the higher education segments have three other
sources of funding for capital projects.
• Local General Obligation Bonds. Like K-12 school districts, community -~
college districts are authorized to sell general obligation bonds to finance
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1_ construction projects with the approval of 55 percent of the voters in the
district. Over the past decade, community college districts have received
voter approval to issue more than $15 billion in local facility bonds.
• Gifts and Grants. In recent years, CSU and UC together have received more
than $100 million annually in gifts and grants for construction of facilities.
• UC Research Revenue. The UC finances the construction of some new
research facilities by selling bonds and pledging future research revenue for
their repayment. Currently, UC uses about $130 million a year of research
revenue to pay off these bonds.
Proposal
This measure allows the state to sell $10.4 billion of general obligation bonds for
K-12 school facilities ($7.3 billion) and higher education facilities ($3.1 billion).
Figure 1
Proposition 1 D
Uses of Bond Funds
Amount
K42 ~ (In Millions)
Modernization projects $3,300a
New construction projects t gppa,b
Severely overcrowded schools 1,000
Charter schools facilities 500
Career technical facilities 500
Environment-friendly projects 700
Joint-use projects P9
Subtotal, K-12 ($7 329)
Higher Education
Community Colleges $1,507
University of California ggOc
California State University 690
Subtotal, Higher Education ($3,087)
r
a A total of up to $200 million is available from these two amounts combined as incentive funding to
promote the creation of small high schools.
6 Up to $200 million is available for earthquake-related retrofitting.
o $200 million is available for medical education programs.
K-12 School Facilities
As shown in Figure 1, the $7.3 billion for K-12 school facilities is designated for
seven types of projects. The underlying requirements and funding formulas for four of
these project types (modernization, new construction, charter school facilities, and joint-
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use projects) would be based on the existing SFP. The other three types of projects
(overcrowded schools, career technical facilities, and environment-friendly projects)
would be new components of the SFP.
Modernization ($3.3 Billion). These monies would be for the modernization of
existing school facilities. School districts would be required to pay 40 percent of project
costs (unless they qualify for state hardship funding).
New Construction ($1.9 Billion). These monies would cover various costs associated
with building new facilities, including site acquisition, project design, engineering,
construction, and inspection. Up to $200 million of the $1.9 billion would be available to
retrofit facilities likely to be unsafe during an earthquake. Districts would be required to
pay 50 percent of new construction and earthquake-safety projects (unless they qualify
for state hardship funding).
Relief Grants for Overcrowded Schools ($1 Billion). As a condition of receiving one
of these grants, school districts would be required to replace portable classrooms with
newly constructed permanent classrooms, remove portable classrooms from
overcrowded school sites, and reduce the total number of portable classrooms within
the district. As with other new construction projects, districts would be required to pay
50 percent of project costs. Under the program definition of overcrowded, roughly 1,800
schools (or 20 percent of all-schools) would be eligible for funding.
Career Technical Education Facilities ($500 Million). The measure also funds a new
facility program designed to enhance educational opportunities for students interested
in technical careers. Grants would be provided to high schools and local agencies that
have career technical programs. The grants would be allocated on a per square foot
basis, with a maximum of $3 million for each new construction project and $1.5 million
for each modernization project. For both types of grants, the required local contribution
would be 50 percent of project costs. Given the program's requirements, approximately
500 school districts (or one-half of all districts) would be eligible for new construction
and modernization grants. Ixi addition, about 251oca1 agencies would be eligible for
modernization grants.
Charter School Facilities ($500 Million). These monies would be for new
construction and modernization of charter school facilities. (Charter schools are public
schools that are exempt from certain state requirements in exchange for adhering to a
local- or state-approved charter.) A 50 percent local contribution would be required.
Environment-Friendly Projects ($100 Million). These monies would be provided as
special incentive grants to promote certain types of environment-friendly facilities. For
example, districts could receive grant funding if their facilities included designs and
materials that promoted the efficient use of energy and water, the maximum use of
natural lighting, the use of recycled materials, or the use of acoustics conducive to
teaching and learning. The same local contributions would be required as for other new
construction and modernization projects.
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Legislative Analyst's Office
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~__ Joint-Use Projects ($29 Million). These monies would be available for both
constructing new facilities and reconfiguring existing facilities for ajoint-use purpose.
Joint-use projects include gymnasiums, libraries, child care facilities, and teacher
preparation facilities that are located at a school but used for joint school/community or
K-12/higher education purposes. Under such arrangements, the school district and
joint-use partner share the 50 percent local matching requirement.
Higher Education Facilities
The measure includes $3.1 billion to construct new buildings and related
infrastructure, alter existing buildings, and purchase equipment for use in these
buildings for the state higher education segments. As Figure 1 shows, the measure
allocates $1.5 billion to CCC, $890 million to UC, and $690 million to CSU. The
Governor and Legislature would select the specific projects to be funded by the bond
monies.
Fiscal Effects
The costs of these bonds would depend on interest rates in effect at the time they are
sold and the time period over which they are repaid. The state would likely make
principal and interest payments from the state's General Fund over a period of about
30 years. If the bonds were sold at an average interest rate of 5 percent, the cost would
be about $20.3 billion to pay off both principal ($10.4 billion) and interest ($9.9 billion).
~ The average payment would be about $680 million per year.
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Legislative Analyst's Office
7/20/06 10:00 AM
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Proposition 1 E
Disaster Preparedness and Flood Prevention Bond Act of 2006
Background
State Role. Multiple agencies at each level of government (state, federal, and local)
have some responsibilities for flood management. In addition, private entities own and
operate some flood control facilities. The state carries out a number of programs
designed to provide flood management. Some of these programs are operated directly
by the state, while others provide grants to local agencies for similar purposes.
The state is primarily responsible for flood control in the Central Valley. As shown
in Figure 1, the state Central Valley flood control system includes about 1,600 miles of
levees, as well as other flood control infrastructure such as overflow weirs and
channels. The state directly funds the construction and repair of flood management
structures such as levees, typically with a federal and local cost share. For
approximately 80 percent of the levees in the Central Valley flood control system, the
r"", state has turned over the operations and maintenance to local governments (primarily
local flood control districts), although the state retains ultimate responsibility for these
levees and the system as a whole.
7'1
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Legislative Analyst's Office
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Figure 1
Central Valley Flood Control System
Sacramento ~ Chico
River
- Feather River
uba City
`- Yolo Bypass- ~ $acramento
Rio Vista •
- - - - - - - - - - - - - - -
•Stockton
San Joaquin River
Los Banos •
= Levee
River Mendota ~
Not to Scale
Outside the Central Valley system, the state's role in flood management generally
consists of providing financial assistance to local governments for flood control projects
located throughout the state. For example, the state has provided funding for the Santa
Ana River Mainstem flood control project that spans Orange, Riverside, and San ~ _,r
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Bernardino Counties. In the Sacramento-San Joaquin River Delta region (Delta), as
Legislative Analyst's Office
7/20/06 10:00 AM
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another example, the state has no oversight role with respect to local levee construction
or maintenance (a majority of Delta levees-about 700 miles-are located outside the
state system). Because a significant portion of the state's population depends on water
supplies that come through the Delta, there is a state interest in the continued operation
of the Delta levee system. Given this, the state has provided financial assistance over
many years to local flood control districts in the Delta region to rehabilitate and
maintain levees.
Funding. In general, state flood management programs have been funded from the
General Fund, with some use of bond funds. Since 1996, the voters have authorized a
number of state general obligation bonds, of which about $400 million has been
allocated specifically for flood management purposes. Most of these bond funds for
flood management have already been spent.
State funding levels for flood management have varied substantially on a year-to-
yearbasis, largely depending on the availability of General Fund and bond monies for
this purpose. For example, since 2000-O1, annual state funding for flood management
has varied from a low of about $60 million (2002-03) to a high of about $270 million
(2000-O1). hi addition to state flood management programs, local governments,
including flood control districts and other public water agencies, operate their own
flood management programs and projects. Funding for these local programs comes
from various sources, including property assessments and, in some cases, financial
assistance from the state.
A law passed earlier this year provides $500 million from the General Fund for
emergency levee repairs and other flood management-related costs.
The Department of Water Resources (DWR) has made rough estimates of the cost to
repair and upgrade the Central Valley flood control system and levees in the Delta of
between $7 billion and $12 billion.
Proposal
This measure authorizes the state to sell about $4.1 billion in general obligation
bonds for various flood management programs. (See "An Overview of State Bond
Debt" for basic information on state general obligation bonds.) Figure 2 summarizes the
purposes for which the bond money would be available to be spent by DWR and for
grants to local agencies. In order to spend these bond funds, the measure requires the
Legislature to appropriate them in the annual budget act or another law.
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Legislative Analyst's Office
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Figure 2
Proposition 1 E
Uses of Bond Funds
Amounts
Qn Millions)
State Central Valley flood control system repairs and improvements; $3,000
Delta levee repairs and maintenance.
Flood control subventions (local projects outside the Central Valley). 500
Stormwater flood management (grants for projects outside the. 300
Central Valley).
Flood protection corridors and bypasses; floodplain mapping. 290
Total $4,090
Specifically, the bond includes about $4.1 billion for various flood management
activities, allocated as follows:
• State Central Valley Flood Control System and Delta Levees-$3 Billion. To
evaluate, repair, and restore existing levees in the state's Central Valley flood
control system; to improve or add facilities in order to increase flood j -1
protection for urban areas in the state's Central Valley flood control system; ~JI
and to reduce the risk of levee failure in the Delta region through grants to
local agencies and direct spending by the state.
• Flood Control Subventions-$500 Million. To provide funds to local
governments for the state's share of costs for locally sponsored, federally
authorized flood control projects outside the Central Valley system.
• Stormwater Flood Management-$300 Million. For grants to local agencies
outside of the Central Valley system for projects to manage Stormwater.
• Statewide Flood Protection Corridors and Bypasses-$290 Million. To
protect, create, and enhance flood protection corridors, including flood
control bypasses and setback levees; as well as for floodplain mapping.
Fiscal Effects
Bond Costs. The costs of these bonds would depend on interest rates in effect at the
time they are sold and the time period over which they are repaid. The state would
likely make principal and interest payments from the state's General Fund over a
period of about 30 years. If the bonds were sold at an average interest rate of 5 percent,
the cost would be about $8 billion to pay off both the principal ($4.1 billion) and interest
($3.9 billion). The average payment would be about $266 million per year. --~
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Legislative Analyst's Office
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Property Tax-Related Impacts. The measure provides funds for land acquisition by
the state for flood management, including the development of bypasses and setback
levees. Under state law, property owned by government entities is exempt from
property taxation. To the extent that this measure results in property being exempted
from taxation due to acquisitions by govemments, local governments would receive
reduced property tax revenues. Because the measure does not specify what portion of
the bond funds will be used for acquisitions, the impact on local property tax revenues
statewide is unknown, but is potentially up to several million dollars annually.
Operational Costs. To the extent that bond funds are used by state and local
governments to purchase property or develop a new flood control project, these
governments would incur unknown additional costs to operate or maintain the
properties or projects.
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Legislative Analyst's Office
7/20/2006 10:00 AM
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Proposition 84
Water Quality, Safety and Supply. Flood Control. Natural Resource
Protection. Park Improvements. Bonds. Initiative Statute.
Background
State Spending on Resources Programs. The state operates a variety of programs to
conserve natural resources, protect the environment, provide flood control, and offer
recreational opportunities for the public. The state also operates a program to plan for
future water supplies, flood control, and other water-related requirements of a growing
population. In addition to direct state expenditures, the state also provides grants and
loans to local governments and nonprofit organizations for similar purposes. These
programs support a variety of specific purposes, including:
• Natural Resource Conservation. The state has provided funds to purchase,
protect, and improve natural areas-including wilderness and open-space
areas; wildlife habitat; coastal wetlands; forests; and rivers, lakes, streams,
and their watersheds.
("' • Safe Drinking Water. The state has made loans and grants to public water
systems for facility improvements to meet state and federal safe drinking
water standards.
• Flood Control. The state has funded the construction and repair of flood
control projects in the state Central Valley flood control system. The state has
also provided financial assistance to local agencies for local flood control
projects in the Sacramento-San Joaquin River Delta and in other areas outside
the Central Valley.
• Other Water Quality and Water Supply Projects. The state has made
available funds for various other projects throughout the state that improve
water quality and/or the reliability of water supplies. For example, the state
has provided loans and grants to local agencies for the construction and
implementation of wastewater treatment, water conservation, and water
pollution reduction projects.
• State and Local Parks. The state operates the state park system, and has
provided funds to local governments for the acquisition, maintenance, and
operation of local and regional parks.
Funding for Resources Programs. Funding for these various programs has
traditionally come from General Fund revenues, federal funds, and general obligation
bonds. Since 1996, voters have authorized approximately $11 billion in general
obligation bonds for various resources purposes. Of this amount, approximately
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$1.4 billion is projected to remain available for new projects as of June 30, 2006, ~-
primarily for water-related purposes. Legislation enacted earlier this year provides
$500 million from the General Fund for emergency levee repairs and other flood
control-related expenditures.
Proposal
This initiative allows the state to sell $5.4 billion in general obligation bonds for safe
drinking water, water quality, and water supply; flood control; natural resource
protection; and park improvements. (See "An Overview of State Bond Debt" for basic
information on state general obligation bonds.) Figure 1 summarizes the purposes for
which the bond money would be available for expenditure by various state agencies
and for loans and grants, primarily to local agencies and nonprofit organizations. In
order to spend most of these bond funds, the measure requires the Legislature to
appropriate them in the annual budget act or other legislation.
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Legislative Analyst's Office
7/20/2006 10:00 AM
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Figure 1
Proposition 84
Uses of Bond Funds
Amounts
(In Millions)
WaterQualit ~ $1,525-."
• Integrated regiona! water management. 1,000
• Safe drinking water. 380
• Delta and a riculture water ualit . 145
Protectortof Rivers, Lakes; and Streams':.. ~ $928
• Regional conservancies. 279
• Other projects-public access, river parkways, urban stream 189
restoration, California Conservation Corps.
• Delta and coastal fisheries restoration. 180
. Restoration of the San Joaquin River. 100
• Restoration projects related to the Colorado River. 90
• Stormwater ollution revention. 90
Flood-Control " ~'` ;$800 ~"
• State flood control projects-evaluation, system improvements, 315
flood corridor program.
• Flood control projects in the Delta. 275
• Local flood control subventions (outside the Central Valley flood 180
control system).
. Flood lain ma in and assistance for local land use tannin 30
Sustainable Communities and~Climate,Chan a Reduction ~ ~ $580
• Local and regional parks. 400
• Urban water and energy conservation projects. 90
.Incentives for conservation in local tannin 90
Protection of Beaches, Ba s; and Coastal Waters ~~ '? ',`"'$540 ,..
• Protection of various coastal areas and watersheds. 360
• Clean Beaches Program. 90
• California Ocean Protection Trust Fund-marine resources, 90
sustainable fisheries, and marine wildlife conservation.
Parks~and Natural Etlucation Facilities- - •- . ~^$SOO~s
• State park system-acquisition, development, and restoration. 400
• Nature education and research facilities. 100
Forest and Wildlife Conservation ~~$450
.Wildlife habitat protection. 225
• Forest conservation. 180
• Protection of ranches, farms, and oak woodlands. 45
Statewide WaterPlannin ~ - - '$65 -
•Planning for future water needs, water conveyance systems, and 65
flood control ro'ects.
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Fiscal Effects
Legislative Analyst's Office
7/20/2006 10:00 AM
FINAL
Bond Costs. The cost of these bonds would depend on interest rates in effect at the
time they are sold and the time period over which they are repaid. The state would
likely make principal and interest payments from the state's General Fund over a
period of about 30 years. If the bonds were sold at an average interest rate of 5 percent,
the cost would be about $10.5 billion to pay off both the principal ($5.4 billion) and
interest ($5.1 billion). The average payment would be about $350 million per year.
Property Tax-Related Impacts. The initiative provides funds for land acquisition by
governments and nonprofit organizations for various purposes. Under state law,
property owned by government entities and by nonprofit organizations (under
specified conditions) is exempt from property taxation. To the extent that this initiative
results in property being exempted from taxation due to acquisitions by governments
and nonprofit organizations, local governments would receive reduced property tax
revenues. We estimate these reduced property tax revenues would be several million
dollars annually.
Operational Costs. State and local governments may incur additional costs to
operate or maintain the properties or projects, such as new park facilities, that are
purchased or developed with these bond funds. The amount of these potential
additional costs is unknown, but could be tens of millions of dollars per year.
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