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HomeMy WebLinkAboutBUDGET & FINANCE ACTION SUMMARY 06-15-09~~ Central Contra Costa Sanitary District BUDGET AND FINANCE COMMITTEE ACTION SUMMARY Chair Lucey Member Nejedly Monday, June 15, 2009 3:00 p.m. Executive Conference Room 5019 Imhoff Place Martinez, California PRESENT: Jerry Lucey, Jim Nejedly, Jim Kelly, Randy Musgraves 1. CALL MEETING TO ORDER Chair Lucey called the meeting to order at 3 p.m. 2. PUBLIC COMMENTS None. 3. OLD BUSINESS a. Review Outstanding Question COMMITTEE ACTION: Reviewed outstanding questions. 4. CLAIMS MANAGEMENT a. Review Outstanding Claims There were no new claims to report. COMMITTEE ACTION: None ~92s~zza-9soo www.centralsan.org ®R~~ rape Budget and Finance Committee June 15, 2009 Page 2 5. REPORTS/ANNOUNCEMENTS 'a. State Financial Crisis COMMITTEE ACTION: Two articles were handed out, attached, discussing recent activity regarding the State's budget deficit. b. Report on CCCERA Subsidy by the District COMMITTEE ACTION: Received report. c. Lawsuit by Matthew Parkinen COMMITTEE ACTION: Received report. d. Insurance Premiums (See item 4.m. in Board Binder) COMMITTEE ACTION: Recommended Board approval. 6. REVIEW EXPENDITURES (Item 4.a. in Board Binder) COMMITTEE ACTION: The Committee requested additional information regarding four items. Recommended Board approval of expenditures. 7. ADJOURNMENT - at 3:34 p.m. O .i 5Q. CAL/fOBN/A ASSOC/Al/ON Of sAN/lAT/ON ACENC/fs 1215 K Strcc[, Suite 2290, Sacramento, CA 95814 FH: (916) 446-0388 - FX: (916) 231-2141 www.casaweb.org VIA ELECTRONIC MAIL TO: CASA Member Agencies CASA Attorneys CASA Associates CASA Executive Board CASA Legislative Committee FROM: Mike Dillon, CASA Lobbyist Christina DiCaro, CASA Lobbyist RE: NEWS FROM THE CAPITOL BUDGET CONFERENCE COMMITTEE DEBATES PROPOSITION 1A PROPERTY TAX BORROWING PROPOSAL: FRUSTRATION MOUNTS The powerful Budget Conference Committee, consisting of 10 members (5 from the Senate and 5 from the Assembly) has been meeting daily, wrestling with how to close the massive $24 billion budget deficit. This morning the Conference Committee debated Governor Schwarzenegger's.budget proposal to borrow $2 billion in property taxes from cities, counties, and special districts. However, before debate could ensue, a visibly frustrated Conference Committee Chair, Assemblywoman Noreen Evans, said, "At 9:28 a.m., we just got a whole bunch of Budget Trailer Bill language from the Administration that is far beyond what we have discussed. Some of it involves Proposition 1A." She noted that the Governor has imposed a deadline in the media of June 15th for the Conference Committee to complete its work, prompting Chair Evans to state, "The Governor is making it very difficult to get this job done. We may be here Monday, stopping the clock at midnight to finish." The Department of Finance representative Ana Matosantos, opened on the Proposition 1A borrowing proposal and noted that they were "proposing the solution as a last resort." However, she warned the committee, "The Governor is prepared to propose additional reductions if the legislature is not willing to suspend 1A." The Legislative Analyst representative, Maryanne O'Malley stated, "This is a significant diversion of property taxes, and this is a significant impact on cities, counties, and special districts." She added that you "don't have to apply the 8% (borrowing) evenly. You could redirect more from enterprise special districts." Interestingly, Ms. O'Malley noted, "We're still not clear what the [$2 billion borrowed portion] is to be used for. We heard it would go into the General Fund. That's not constitutional. We heard it would go to ERAF (Educational Revenue Augmentation Fund) and that's a maintenance of effort problem (under the federal stimulus requirements). We heard it could be used for Medi-Cal, etc." June 12, 2009 %' mandate. Under the Act, various local government entities are reimbursed for their compliance with the posting of meeting agendas, etc. Legislative Analyst Maryanne O'Malley explained, "Proposition 59 (2004) required public access to documents and public access to hearings. You could just conform [the Open Meeting Act] to the law. Adopt best practices. Right now you reimburse local government to prepare and post agendas." Ms. O'Malley said that the cost of the reimbursement varies, as, for example, a city manager must review the agenda, then the city attorney, etc. Senator Ducheny called the existing system of reimbursement "perverse," noting that an agency would get reimbursed at a higher rate, if their city manager or city attorney was at a higher pay scale. Chair Evans argued that she supported the existing system, noting that she spent 16 years in local government. Due to the complexity of this item and the need for discussion on some of the other mandates subject to suspension, the Conference Committee held the item "open." GOVERNOR REVOKES BORROWING -CREATES PRESSURE ON LEGISLATORS In reports released by State Treasurer Bill Lockyer and State Controller John Chiang, they have urged legislative leaders to have a Budget in place by June 15, in order to start the process of borrowing from Wall Street. The state can borrow Revenue Anticipation Notes (RAN's), which are the cheaper form of borrowing, if they have a stable Budget in place. The state has the ability, with a less than proper Budget in place, to issue Revenue Anticipation Warrants (RAW's). In fact, word was spreading that an effort might be under way to develop a partial Budget solution, along the lines of $15 billion rather than $24 billion, in order to borrow RAW's to meet immediate cash needs, and then deal with the rest of the Budget issues in July and August. Yesterday the Governor pulled the plug on that possibility, by sending a letter to State Controller Chiang, in which the Governor stated in part, "1 have informed legislative leaders that under no circumstances will l agree to issue a RAW to paper over our current Budget shortfall." This latest action by the Governor puts tremendous pressure on the Legislature to enact a Budget solution, dealing with the entire $24 billion problem, which will likely result in many of the draconian cuts that have been proposed by the Governor. 5, 0. Sit c bee_ June 12, 2009 Governor willinE to abandon $2 billion raid -- maybe Gov. Arnold Schwarzeneager said Friday that he is willing to abandon his budget-balancing proposal to borrow $2 billion from local government -- if lawmakers can agree on an alternative. Schwarzenegger addressed the issue during aquestion-and-answer session that followed an Escondido speech he gave about the urgent need to mend the state's $24.billion budget hole this month. "By the way, this is not yet a 100 percent thing," Schwarzenegger told a questioner who complained about the proposed raid of property tax revenue from cities, counties and special districts. "My Republican colleagues have said they don't like that idea of borrowing from local government, and my Democratic friends have also said that they don't like to borrow from local government. "So if both parties don't like to borrow from local government, of course we won't borrow from local government, that's clear," Schwarzenegger said. The governor said the state's finance director, Mike Genest, has developed a list of potential new cuts - in areas ranging from foster care to state employee health care -that could negate the need to borrow from local government. Aaron McLeaz, Schwarzenegger's spokesman, said the governor never has wanted to borrow from local government but wants to impress upon lawmakers the trade offs necessary to replace that $2 billion. "What the governor is doing is stepping in, saying, 'If you don't want to do that, then here are the cuts it would take to avoid that,"' McLear said. "This is really just a part of negotiation," he added. This is'not him backing off of anything, or him changing anything. We need to start negotiating."