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HomeMy WebLinkAbout08 LEGISLATIVE UPDATE DocuSign Envelope ID: 1EEFDB96-4D07-45E7-B674-1BC7CB10383E Agenda Item 8 Reviewed: W AGENDA REPORT City Manager �� Finance Director N/A MEETING DATE: MAY 5, 2020 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: MATTHEW S. WEST, CITY MANAGER SUBJECT: LEGISLATIVE UPDATE SUMMARY: Staff has prepared a summary of legislative activity. RECOMMENDATION: 1. Approve letter to Governor Newsom requesting state recovery actions for cities in line with the League of California Cities' campaign and authorize staff to continue to advocate for similar actions. 2. Approve letter to Governor Newsom requesting state recovery actions for counties and authorize staff to continue to advocate for similar actions. 3. Other actions at the pleasure of the City Council. FISCAL IMPACT: Not applicable. DISCUSSION: State Legislative Activity California continues to navigate the difficulties surrounding COVID-19. One side effect of COVID-19 and various health orders has been that the Legislature has not been in session. This legislative session was anticipated to be full of new budget proposals, due to the state's positive fiscal condition. All proposals and schedules changed with the onset of COVID-19. The current legislative calendar has the Legislature's business concluding in August, with the Governor signing or vetoing bills by the end of September. No formal amendments to that calendar have been announced. The Assembly is planning to return on May 4th, while the Senate plans on returning May 11th. In order to comply with mandated COVID prevention measures and meet the current legislative calendar, the Assembly is planning for one policy hearing per day and an 144 DocuSign Envelope ID: 1EEFDB96-4D07-45E7-B674-1BC7CB10383E Agenda Report— Legislative Update May 5, 2020 Page 2 accelerated policy and fiscal committee process. Unlike in the Senate where members have been asked to prioritize their legislative packages, Assembly committee chairs have been given the power to determine what bills will and will not be heard in their respective committees. It is anticipated that the physical presence of staff and the public in the Capitol will be extremely limited for the remainder of the legislative session. Members of the public will be pre-screened by a health professional before being permitted to enter the Capitol and strict social distancing protocols will be observed. State Budget One of the only constitutional requirements of the Legislature is to pass a budget by June 15. In a normal legislative year, the Governor releases his proposed budget in January, followed by a revision to the budget in May after tax revenues are known. The Legislature and Governor then work together to pass a budget by June 15. Due to COVID-19, the federal government announced that income taxes would not be due until July (instead of the regular April due date). Because of this, the state will not know its true financial position likely until August. The Legislature and Department of Finance (DOF) have announced that a "working budget" will be passed by June 15, significantly less than the Governor's proposed $222 billion January budget proposal. Once revenues are known, the Governor and Legislature will work to pass any additional items through budget trailers or conventional legislation. One point has been made clear by the budget chairs, Governor and DOF: any new programs or augments to programs will likely not move forward this year. Additional spending will be focused on relief for COVID-19, although particulars have not been worked out. Response and Recovery The federal government has issued multiple stimulus packages in order to assist businesses, citizens, industries and others as a result of COVID-19 impacts. More stimulus bills are planned. One sector that has not seen much in the way of stimulus is local government. The original Coronavirus Aid, Relief and Economic Security (CARES) Act did appropriate $150 billion to state and local governments, but only to those with a population greater than 500,000. In California, only a handful of cities meet that standard. The state, at this time, has not indicated that it will share its CARES revenue with local governments. The County of 145 DocuSign Envelope ID: 1EEFDB96-4D07-45E7-B674-1BC7CB10383E Agenda Report— Legislative Update May 5, 2020 Page 3 Orange has indicated that it is still awaiting guidance from the federal government before making any decisions about sharing the revenue it received from the CARES Act. The state has yet to issue any kind of stimulus or relief, as the legislature has been adjourned for some time as mentioned earlier. The Legislature gave the Governor $1.1 billion to help in response to COVID-19 before they adjourned, but the DOF and Governor have stated that the true costs of response could be closer to $10 billion. The Assembly and Senate budget committees have started hearings on COVID-19 response, collecting information from state departments and agencies. As mentioned earlier, these costs and any potential stimulus efforts will be the focus of"working budget" discussions and any budget trailers as the state's financial picture becomes clearer. League of California Cities Advocacy Campaign The League of California Cities (League) has developed an advocacy campaign focused on getting cities the relief needed as a result of COVID-19. As emergency costs related to COVID-19 continue to grow, revenues to fund City services are plummeting. COVID-19 is having devastating impacts on City budgets and services statewide. The League performed a survey of California cities and the results are startling- - $7 billion general revenue shortfall over the next two fiscal years (shortfall will grow by billions of dollars if stay-at-home orders to protect public health extend into the summer months and beyond) - 90% of cities project that shortfalls will impact core city services, including police, fire, emergency management, and planning and housing, and anticipate lay-offs or furloughs, which will further impact core services for residents. The League is advocating for the following measures to help cities with the issues identified in their survey- 1. urvey:1. Establish at least a $7 billion city revenue stabilization fund for direct aid to all cities to address the general revenue shortfall over the next two fiscal years 2. Allocate a share of the State's $8.4 billion CARES Act funding for cities with populations under 500,000 to support COVID-19 expenses 3. Create a COVID-19 financing vehicle that all cities can access to support immediate cash flow needs. The attached letter to Governor Newsom mirrors the League's talking points. Staff is requesting approval of this letter and the ability to continue to advocate for similar efforts as the League's advocacy campaign unfolds. 146 DocuSign Envelope ID: 1EEFDB96-4D07-45E7-B674-1BC7CB10383E Agenda Report— Legislative Update May 5, 2020 Page 4 County Advocacy Campaign Counties have also started an advocacy campaign to help with the financial impacts of COVID-19 on county level government as they exhaust reserves funding public health departments monitoring, public safety frontline workers, social and behavioral care workers and securing hotel rooms homeless.. Specifically, counties are requesting: - $1.1 billion in residual CARES Act funds based on direct service responsibilities (80% to counties with less than 500,000 population) - State to cover deferred revenue caused by the Sales Tax Layaway Program - Immediate authority to waive property tax delinquencies caused by COVID-19 - Protections and mitigations for 1991 and 2011 Realignment programs and funding - Assistance to counties with cash flow solutions to address short term needs. The attached letter to Governor Newsom mirrors county talking points. Staff is requesting approval of this letter and the ability to continue to advocate for similar efforts as the county advocacy campaign unfolds. City Advocacy on COVID-19 to Date The City has sent a number of advocacy letters to date on various bills or concepts. The letters include: - Letters to Senator Feinstein and Harris requesting a number of changes, clarifications or new concepts to be introduced in the next phase of stimulus - Letter to Congresswoman Katie Porter requesting support of H.R. 6467, a federal bill allocating $250 billion to local governments with populations less than 500,000. All letters sent to date are attached. November 3 General Election Update The following ballot measures have qualified for the general election: - Replace Cash Bail with Risk Assessments Referendum: This measure is a referendum on SB 10 (2018) that replaced cash bail with risk assessments. - Criminal Sentencing, Parole, and DNA Collection Initiative (AKA Reducing Crime and Keeping California Safe Act): Repeals early prisoner-release policies passed under Proposition 47 (2014), Proposition 57 (2016) and AB 109 (2011). Also converts certain crimes back to being felonies. - Rental Affordability Act. Allows cities and counties to place rent control on properties older than 15 years. 147 DocuSign Envelope ID: 1EEFDB96-4D07-45E7-B674-1BC7CB10383E Agenda Report— Legislative Update May 5, 2020 Page 5 - Family Home Protection and Fairness in Property Tax Reassessments Act: Allows eligible homeowners to transfer their tax assessments anywhere within the state, increase the number of times a tax assessment can be transferred from one to three, and allow tax assessments to be transferred to a more expensive home with an upward adjustment; requires that a legal entity's property be reassessed to market value if 90 percent of a legal entity's ownership changes, even if no one person or entity acquires more than 50 percent. Staff is available for any questions the Council may have. Attachments- - Letter to Governor Newsom requesting state recovery actions for cities - Letter to Governor Newsom requesting state recovery actions for counties - City COVID-19 advocacy letters 148 DocuSign Envelope ID: 1EEFDB96-4D07-45E7-B674-1BC7CB10383E May , 2020 The Honorable Gavin Newsom Governor, State of California State Capitol Sacramento, CA 95814 VIA e-mail: externalaffairsggov.ca.gov Dear Governor Newsom - The City of Tustin (City) thanks you for your leadership and efforts to protect and support Californians during this unprecedented public health crisis. Cities remain on the front line helping residents stay safe and in their homes, delivering emergency services, and supporting local businesses and community organizations. However, as emergency costs continue to grow, revenues to fund local services are plummeting. COVID-19 is having devastating impacts on city budgets and services statewide. Based on the League of California Cities analysis, California cities are projecting a nearly $7 billion general revenue shortfall over the next two fiscal years. This shortfall will grow by billions of dollars if stay-at-home orders to protect public health extend into the summer months of 2020 and beyond. While the City is fortunate to have diverse revenue sources, the financial impacts of COVID-19 will without a doubt affect the ability to provide core City services. COVID-19 financial impacts may also delay critical infrastructure development necessary to allow for more housing to be built throughout the City. Since the beginning of the COVID-19 crisis, the City has stepped up to protect and serve our community, with no security of how or when cities will receive some kind of stimulus funding received by almost every other industry. In order to continue to be a full partner with the state in saving lives,protecting our communities,and ultimately recovering from this crisis,the City needs your help. The City is calling on you to immediately support the following actions: - Establish at least a $7 billion city revenue stabilization fund for direct aid to all cities to address the general revenue shortfall over the next two fiscal years; 149 DocuSign Envelope ID: 1EEFDB96-4D07-45E7-B674-1BC7CB10383E - Allocate a share of the State's $8.4 billion CARES Act funding for cities with populations under 500,000 to support COVID-19 expenses; and - Create a COVID-19 financing vehicle that all cities can access to support immediate cash flow needs. The City appreciates your consideration of our requests and look forward to further discussing in the coming days how together we can continue to best protect Californians and reopen our economy. Thank you again for your leadership and partnership during these uncertain times. Sincerely, Dr. Allan Bernstein Mayor cc: Senator John M.W. Moorlach Assembly Member Steven S. Choi, Ph.D. Tony Cardenas, League of California Cities Meg Desmond, League of California Cities, cilyletters@cacities.org letters@cacities.org Jenn Lowe, Association of California Cities—Orange County Amy O'Gorman Jenkins, Precision Advocacy 150 DocuSign Envelope ID: 1EEFDB96-4D07-45E7-B674-1BC7CB10383E May , 2020 The Honorable Gavin Newsom Governor, State of California State Capitol Sacramento, CA 95814 VIA e-mail: externalaffairsggov.ca.gov Dear Governor Newsom - The City of Tustin(City)would like to thank you for your leadership on obtaining critical COVID- 19 aid for California's counties, especially the County of Orange. California's counties, along with cities, were the first to react and respond to COVID-19 and efforts have been successful in "flattening the curve"to reduce the number of positive cases and deaths in our communities. The City has experienced a collaborative relationship with the County of Orange during these unprecedented times. While the COVID-19 aid packages to date have brought a measure of relief to states, small businesses, and some large local governments, California's counties are facing unprecedented demands on public health and critical safety net services at the same time that the ability to fund them is rapidly deteriorating. In addition to our letter requesting immediate help for cities,the City is joining counties in strongly and respectfully urging you and the Legislature to allocate resources directly to counties. Specifically: - Allocate $1.1 billion in residual CARES Act funds based on direct service responsibilities (80%to counties with less than 500,000 population) - Cover deferred revenue caused by the Sales Tax Layaway Program - Grant immediate authority to waive property tax delinquencies caused by COVID-19 - Grant protections and mitigations for 1991 and 2011 Realignment programs and funding - Provide assistance to counties with cash flow solutions to address short term needs. Fewer than one-third of California's counties received funding under the CARES Act via the Coronavirus Relief Fund, yet every county is on the front line of responding to the COVID-19 crisis and needs immediate, flexible, and direct relief for both expenses and lost revenues. This is certainly true for the county we call home, the County of Orange. 151 DocuSign Envelope ID: 1EEFDB96-4D07-45E7-B674-1BC7CB10383E Again, the City is thankful for your incredible leadership and focus on the overwhelming needs and challenges facing state and local governments. The City is committed to a solution that helps cities and counties respond and recover from these unprecedented times. Sincerely, Dr. Allan Bernstein Mayor cc: Senator John M.W. Moorlach Assembly Member Steven S. Choi, Ph.D. Orange County Board of Supervisors Frank Kim, CEO, County of Orange Tony Cardenas, League of California Cities Meg Desmond, League of California Cities, ci . letters&cacities.org Jenn Lowe, Association of California Cities—Orange County Amy O'Gorman Jenkins, Precision Advocacy 152 DocuSign Envelope ID: 1EEFDB96-4D07-45E7-B674-1BC7CB10383E Office of the City Council I April 17, 2020 — The Honorable Dianne Feinstein United States Senate 331 Hart Senate Office Building Washington, DC 20510 Dear Senator Feinstein: As Mayor of the City of Tustin, I want to thank you for the swift action undertaken to address the immediate needs of our nation during the COVID-19 pandemic. While emergency funding provided to state and local governments through the recently passed CARES Act was urgently needed, it is by no means sufficient to completely mitigate the disastrous effects of COVID-19. Despite the uncertainty and rapidly changing nature of this crisis, local jurisdictions are on the front lines and are increasing efforts to ensure the health and safety of residents. To meet this challenge, it is imperative that Congress provide increased state and local fiscal support in the"Phase 4"COVID-19 Economic Stimulus Package. State and local governments have been at the forefront of the response to COVID-19, allocating hundreds of millions of dollars to respond to challenges created by COVID-19. While we have taken such significant and costly steps to mitigate the spread of this virus, we will need the next round of economic relief to provide direct funding allocations to cities and states to counteract budget shortfalls. Funding is needed to accomplish the following: • Unemployment insurance reimbursement provided to workers, including individuals who are unemployed, partially unemployed, or unable to work due to COVID-19 • Continued economic relief for small businesses • Personal Protective Equipment (PPE) for all front line and gig workers who have been deemed essential personnel • General fund reimbursement to cover costs from the loss of revenue • Reimbursement of expanded sick leave and FMLA leave for government employers, who are currently ineligible for the"Phase 2"tax credit • Stabilization of the municipal bond market,which helps finance operations for localities nationwide • Increase caps for state and local tax(SALT)deductions to provide relief to taxpayers in high-tax states One way to accomplish this request is to incorporate the concepts in the recently introduced H.R. 6467 by Congressman Joe Neguse, which provides $250 billion in direct funding to all communities with fewer than 500,000 residents, in any Phase 4 stimulus package. In addition to the aforementioned requests,we believe that it is equally important to create economic growth to help stimulate our economy and bring us all back from this crisis, stronger than ever.It is our understanding that infrastructure may also be a major focus in the next stimulus. Incorporating infrastructure into a stimulus Mayor Dr.Allan Bernstein • Mayor Pro Tem Letitia Clark • Charles E."Chuck"Puckett • Barry W.Cooper • Austin Lumbard 300 Centennial Way • Tustin,California 92780 • www.tustinca.org 153 DocuSign Envelope ID: 1EEFDB96-4D07-45E7-B674-1BC7CB10383E The Honorable Dianne Feinstein April 17, 2020 Page 2 package directed at local governments will provide new job opportunities and help local economies implement a sound path to financial recovery from COVID-19. The next stimulus package should reimplement previous programs such as the Build America Bond Program, which allowed state and local entities to issue bonds for financing surface transportation projects following the Great Recession. Additionally, the upcoming stimulus should include the funding for modern highways & highway safety investments to increase pedestrian safety, reduced congestion and carbon pollution, and deliver better roads and bridges faster, by prioritizing fixing broken and outdated infrastructure. Above all, the COVID-19 pandemic has created a major impact on local communities. Additional federal funding will be essential so that local governments can continue to provide the necessary support to address the increase in unemployment, minimize the economic impact of business closures, ensure all students have access to education, meet the child care and housing needs of residents, and maintain public transportation agencies and social welfare programs. Again, thank you for your efforts, and I look forward to working with you to overcome this crisis. Should you have any questions regarding this letter, please contact the City of Tustin at(714) 573-3012. Sincerely, Dr. Allan Bernstein Mayor City of Tustin cc: Senator Kamala Harris Congresswoman Katie Porter Tustin City Council Tony Cardenas, League of California Cities Meg Desmond, League of California Cities, citylettersncacities.org Jenn Lowe, Association of California Cities—Orange County 154 DocuSign Envelope ID: 1EEFDB96-4D07-45E7-B674-1BC7CB10383E Office of the City Council I April 17, 2020 — The Honorable Kamala Harris United States Senate 112 Hart Senate Office Building Washington, DC 20510 Dear Senator Harris: As Mayor of the City of Tustin, I want to thank you for the swift action undertaken to address the immediate needs of our nation during the COVID-19 pandemic. While emergency funding provided to state and local governments through the recently passed CARES Act was urgently needed, it is by no means sufficient to completely mitigate the disastrous effects of COVID-19. Despite the uncertainty and rapidly changing nature of this crisis, local jurisdictions are on the front lines and are increasing efforts to ensure the health and safety of residents. To meet this challenge, it is imperative that Congress provide increased state and local fiscal support in the"Phase 4"COVID-19 Economic Stimulus Package. State and local governments have been at the forefront of the response to COVID-19, allocating hundreds of millions of dollars to respond to challenges created by COVID-19. While we have taken such significant and costly steps to mitigate the spread of this virus, we will need the next round of economic relief to provide direct funding allocations to cities and states to counteract budget shortfalls. Funding is needed to accomplish the following: • Unemployment insurance reimbursement provided to workers, including individuals who are unemployed, partially unemployed, or unable to work due to COVID-19 • Continued economic relief for small businesses • Personal Protective Equipment (PPE) for all front line and gig workers who have been deemed essential personnel • General fund reimbursement to cover costs from the loss of revenue • Reimbursement of expanded sick leave and FMLA leave for government employers, who are currently ineligible for the"Phase 2"tax credit • Stabilization of the municipal bond market,which helps finance operations for localities nationwide • Increase caps for state and local tax(SALT)deductions to provide relief to taxpayers in high-tax states One way to accomplish this request is to incorporate the concepts in the recently introduced H.R. 6467 by Congressman Joe Neguse, which provides $250 billion in direct funding to all communities with fewer than 500,000 residents, in any Phase 4 stimulus package. In addition to the aforementioned requests,we believe that it is equally important to create economic growth to help stimulate our economy and bring us all back from this crisis, stronger than ever.It is our understanding that infrastructure may also be a major focus in the next stimulus. Incorporating infrastructure into a stimulus Mayor Dr.Allan Bernstein • Mayor Pro Tem Letitia Clark • Charles E."Chuck"Puckett • Barry W.Cooper • Austin Lumbard 300 Centennial Way • Tustin,California 92780 • www.tustinca.org 155 DocuSign Envelope ID: 1EEFDB96-4D07-45E7-B674-1BC7CB10383E The Honorable Kamala Harris April 17, 2020 Page 2 package directed at local governments will provide new job opportunities and help local economies implement a sound path to financial recovery from COVID-19. The next stimulus package should reimplement previous programs such as the Build America Bond Program, which allowed state and local entities to issue bonds for financing surface transportation projects following the Great Recession. Additionally, the upcoming stimulus should include the funding for modern highways & highway safety investments to increase pedestrian safety, reduced congestion and carbon pollution, and deliver better roads and bridges faster, by prioritizing fixing broken and outdated infrastructure. Above all, the COVID-19 pandemic has created a major impact on local communities. Additional federal funding will be essential so that local governments can continue to provide the necessary support to address the increase in unemployment, minimize the economic impact of business closures, ensure all students have access to education, meet the child care and housing needs of residents, and maintain public transportation agencies and social welfare programs. Again, thank you for your efforts, and I look forward to working with you to overcome this crisis. Should you have any questions regarding this letter, please contact the City of Tustin at(714) 573-3012. Sincerely, Dr. Allan Bernstein Mayor City of Tustin cc: Senator Dianne Feinstein Congresswoman Katie Porter Tustin City Council Tony Cardenas, League of California Cities Meg Desmond, League of California Cities, citylettersncacities.org Jenn Lowe, Association of California Cities—Orange County 156 DocuSign Envelope ID: 1EEFDB96-4D07-45E7-B674-1BC7CB10383E Office of the City Council I April 14, 2020 The Honorable Katie Porter United States House of Representatives 1117 Longworth House Office Building Washington, D.C. 20515 Dear Representative Porter: As the Mayor for the City of Tustin, and as a member of the League of California Cities, I am writing to express support of H.R. 6467, the Coronavirus Community Relief Act and to urge you to cosponsor this bill. H.R. 6467 provides $250 billion in direct aid from the federal government to local governments with a population of less than 500,000 as they face mounting challenges related to the global COVID-19 pandemic. The scale of this global crisis is unprecedented, and so is the scope of the local government response. California cities of all sizes are coordinating across jurisdictional lines, enacting emergency measures to slow the spread of the coronavirus pandemic, and taking action to protect individuals and small businesses on the economic margins while spending such sums as necessary to protect public health. The City of Tustin applauds Congress on the passage of the CARES Act which provides financial assistance to meet the immediate needs of individuals and small businesses, as well as $150 billion in direct aid to states and local governments with a population greater than 500,000 to help offset the new costs directly related to the pandemic. However, given the population threshold, only four of California's 482 cities will receive this much needed aid. H.R. 6467 creates a path for the other 99.2 percent of the California cities that were shut out of the CARES Act to receive direct federal aid. The Coronavirus Community Relief Act also addresses some other gaps not covered by the CARES Act. The proposed bill allows units of local government to use allocated funds to cover losses. Section 601 of the CARES Act restricts use of funds to cover "necessary expenditures." Cities, towns, and villages will need federal assistance to persevere through the hardship resulting from rising costs and decreasing tax revenue and fees due to COVID-19. This change from the CARES Act will help local communities deal with revenue shortfalls that will happen as a result of the COVID-19 crisis. The Coronavirus Community Relief Act also provides the necessary flexibility on how allocated funds can be used. If one city needs more funds than it is allocated, while another city does not need all of its allocated funds, these resources can be reallocated among cities within a state to ensure they are put to their best use. This is a change from the CARES Act. Finally, the Coronavirus Community Relief Act changes the rule regarding when a city, town, or village must certify in order to receive funds. Instead of placing a burdensome "shot clock"by which cities, towns, and villages must apply, this legislation allows more time for an applicant to request Mayor Dr.Allan Bernstein • Mayor Pro Tem Letitia Clark • Charles E."Chuck"Puckett • Barry W.Cooper • Austin Lumbard 300 Centennial Way • Tustin,California 92780 • www.tustinca.org 157 DocuSign Envelope ID: 1EEFDB96-4D07-45E7-B674-1BC7CB10383E The Honorable Katie Porter April 14, 2020 Page Two funds. Smaller cities and towns are facing unprecedented challenges and could be facing layoffs. In this environment, a "shot clock" to apply puts unneeded pressure on smaller communities in crisis. California's local leaders are, and will continue to be for some time, on the frontlines of responding to the coronavirus outbreak in their communities and doing what is necessary to ensure the health and safety of their residents. I urge you to support and cosponsor H.R. 6467 to ensure they have the resources to maintain the essential services their residents need, especially in this moment. To co-sponsor the bill, please contact Bo Morris in the office of Rep. Joe Neguse at Bo.Morrisnmail.house.gov. Sincerely, Dr. Mayor Allan Bernstein Mayor City of Tustin cc: Tustin City Council Senator John M.W. Moorlach Assembly Member Steven S. Choi, Ph.D. Tony Cardenas, League of California Cities Meg Desmond, League of California Cities, citylettersncacities.org Jenn Lowe, Association of California Cities—Orange County 158