SR-100-002 (31)~~+ . .
City Council Report
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Santa Monica
City Council Meeting: September 26, 2006
Agenda Item: 1 N
To: Mayor and City Council
From: Gordon R. Anderson
Subject: Adoption of a resolution in Support of the November lnfrastructure Bond
Propositions 1A, 1 B, 1 C, 1 D, 1 E
Recommended Action
It is recommended that the City Council:
1. adopt a resolution in support of the November 7 Infrastructure bonds;
2. direct staff to send copies of the adopted resolution to Governor
Schwarzenegger, California State Senator Sheila Kuehl, California State
Assemblymember Fran Pavley and the League of California Cities; and
3. direct staff to educate the public on City Council support via the website and links
to other governmental agencies such as the Los Angeles County Metropolitan
Transit Authority where information is available.
Executive Summary
In May 2006, the California State Legislature passed a$37.3 billion package of fiscal
and bond measures to provide funding for transportation, housing, levee repairs and
flood control projects and education facilities. These measures have been titled
Propositions 1A, 1 B, 1 C, 1 D, and 1 E by the Secretary of State and will appear on the
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November 2006 ballot for voter approval. The bond package includes $20 billion for
transportation, including $1 billion each for cities and counties to conduct maintenance
and repairs on local streets and roads and $4 billion Statewide for public transit projects
such as the Exposition light rail project; $2.8 billion for housing; $10.4 billion for schools;
and $4.09 billion for levees and flood control projects.
Discussion
Proposition 1A Transportafion Invesfinent Fund Bond Act of 2006 will close a loophole
and ensure that gasoline sales tax revenue from Proposition 42, passed by voters in
2002, is only spent on transportation improvement projects, as originally intended.
This constitutional amendment is designed to "fix" Proposition 42, by permanently
dedicating the sales tax on gasoline to transportation purposes with narrow exceptions.
In 2002, voters approved Proposition 42 which committed the existing sales tax on
gasoline (about $1.3 billion per year) for transportation purposes. The City of Santa
Monica has received $1,300,946 in Proposition 42 funds since 2002. These funds are
used for street and road repairs. However, Proposition 42 included a provision that
allowed these funds to be suspended when the State experienced budget deficits. To
date, $2 billion has been diverted to the State. Funds withheld in FY 2003/04 and FY
2004/05 were repaid to the City (with interest) in July 2006.
Proposition 1A would discourage suspension of these funds by: authorizing suspension
only if the Governor issues a proclamation; stipulating that Proposition 42 funds may
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only be suspended twice in a ten year period and may not be suspended while a
previous loan is still outstanding; and allowing for a ten year repayment period of
previous Proposition 42 loans. The FY 2006/07 State Budget does not include any local
funding. However, local funding is anticipated to resume in FY 2007/08 with the Santa
Monica share estimated at $736,093.
Proposition 1B: Highway Safety, Traffic Reduction, Air Quality, Port Security
Bond Act of 2006 will authorize $19.925 billion of State general obligation bonds on
various transportation and port security projects to rebuild California, of which $1 billion
will go to cities and $1 billion to counties for local street and road improvement projects.
Santa Monica is expected to receive a one-time allocation of $2,883,236 for local street
and road improvements. Another, $4 billion for public transit modernization and service
enhancement on intercity rail is provided. This is viewed as a viable source of funding
required for the Exposition Light Rail Phase 2 to Santa Monica
Proposition 1C Housing and Emergency Trust Fund Act of 2006 will authorize
$2.85 billion for housing projects, including $1.5 million for multifamily housing,
emergency housing, homeownership for low-income households and $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.
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Proposition 1 D Education Facilities: Kindergarten-University Public Education
Facilities Bond Act of 2006 will authorize $10.4 billion to meet the capital outlay needs
of higher education facilities and finance grants for construction and renovation of
schools.
Proposition 1E :Disaster Preparedness and Flood Prevention Bond Act of 2006
will provide $4.09 billion for critical levee repair and construction, as well as flood control
projects and the updating and repair of old water mains and sewage systems.
Budqet/Financial Impact
There is no fiscal impact from the recommendations in this report and no additional
budget authority is required to educate the public as recommended.
Prepared by:
Kathryn Vernez, Assistant to the City Manager, Government Relations
Forwarded to Council:
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