In This Issue

President's Message

Executive Director's Report

2010 Fall Seminar - ReCap

2011 Sacramento Tour

November BOD Meeting

Proposition 26

Calendar of Events

Contact Us

California Contract Cities Association

11027 Downey Ave.

Downey, CA, 90241

(562) 622-5533 (tel.)

President, Laura Olhasso

lolhasso@lcf.ca.gov

Executive Director, Sam Olivito

sam@contractcities.org

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Special Thanks To Our Paltinum and Gold Associate Members

PLATINUM MEMBERS

GOLD MEMBERS

President's Message

One of the benefits of membership in the California Contract Cities Association is the chance for our members to stay on top of and informed about the latest topics of importance to our contract cities.  This year's Annual Fall Seminar held in Santa Barbara provided an excellent opportunity for just that.   Our speakers were prepared, informed, and knowledgeable on the topics of interest to our cities.  Some of the topics we covered were:

1. Real World Ethics: Lessons Learned From The Warning “Bell”
2. Media Relations/Incident Management
3. Contract Cities Have Talent: Success Stories; Solving Complex Problems In Tough Economic Times

I want to thank all our participants, speakers and Associate Members for their work in helping to make this one of the most successful Fall Seminars in our history.   I also want to extend my gratitude to Mayor Helene Schneider from the city of Santa Barbara for opening her city to our delegation.  Santa Barbara was the perfect setting for this great educational seminar.  Special thank you goes to Steve Cooley, Los Angeles County District Attorney and Assemblymember Anthony Portantino for their participation in our event and presentations at our lunch on Saturday.  Steve Cooley assured our members he would continue to investigate and prosecute “Bell” type scandals and work to keep corruption from ruining the state and local levels of government.  Anthony Portantino emphasized his commitment to local government and the fight to protect local services and the people of California.  I would be remiss if I didn't mention our entire Special Events Committee and Chair Randy Bomgaars from the city of Bellflower for working hard to plan this quality program. 

Bob Archuleta, Chair of the Membership Committee and our Executive Director, Sam Olivito will be heading to the city of Vallejo to introduce the benefits of membership in the CCCA and contracting for services as panel participants before the city council and surrounding cities’ officials.  This is an opportunity to educate others about how successful the contracting model is and show other local governments why they should consider it as a viable solution and option  -- most especially for cities experiencing difficulties in these current economic times.  Our City Managers Committee and Chair Mark Alexander have formed a sub committee to investigate a reproducible model of the Contract Cities Association whereby cities within California can become members, enjoy benefits of membership, but operate autonomously in their specific region.  We are very proud of the success of the CCCA and believe that being available as a resource to other regions and counties in California will make our state even better.

As we prepare for the new calendar year we are anticipating our 2011 Sacramento Legislative Orientation Tour,  January 10-11, 2011.  Please be sure to mark your calendars and click here to register now online.  While we were victorious with the passage of Proposition 22 at the polls in November, the State continues to deal with another $20 billion deficit.  Legislators will be looking again at additional sources of revenue and  it will be important for our members’ very strong presence to keep our momentum and continue to remind them their budget should not be balanced on the backs of local governments.  As always, we will meet with Legislators, Constitutional Officers and state leaders to provide you with the most current information to help you, in turn, provide excellent service to your cities. 

December 8, 2011 will mark another opportunity to extend our hand to one of our sister organizations  --  the Independent Cities Association (ICA).  The ICA and the CCCA will participate in a joint holiday party at the City Club in downtown Los Angeles.  Click here for more details and join us for networking and a little holiday cheer.

Be sure to check our website at www.contractcities.org for up-to-date news about our Association and issues of importance to our member cities.

Finally, I want to wish you all Happy Holidays, Merry Christmas and a Happy New Year!  See you next year.

2010 Fall Seminar ReCap

If you weren't able to join us for the 2010 Annual Fall Seminar, you missed one of the most informative educational seminars in recent CCCA history.  Randy Bomgaars, Chair of the Special Events Committee and his entire committee had prepared a spectacular program for our member cities and conference attendees.  Special thanks to all our speakers, participants, staff and Associate Members for helping to make this year's Annual Fall Seminar a huge success!

Click Here to view pictures from the event.

2011 Sacramento Legislative Orientation Tour

Our 2011 Sacramento Legislative Orientation tour is quickly approaching.  Please be sure to Register Now to reserve your spot for this important event.  We must continue to show our strength and unity in this 44th annual event.  There are many new legislators to develop relationships with as well as a number of returning friends. DN. Mario A. Guerra, Chair of the Legislative Committee and the entire committee have been working to bring you a dynamic program for this years event. 

Sessions Include

• Legislative Visits
• Tuesday Morning Briefing Session
• Luncheon Session
• Capitol Rotunda Reception
  

We look forward to another successful year in Sacramento!

November Board of Directors Meeting

Our November meeting was jointly hosted by the cities of Industry and La Puente at the Pacific Palms Hotel and Conference Center in the City of Industry.  After the invocation provided by Randy Bomgaars, Past CCCA President and councilmember from the city of Bellflower, Tom Laing LASD Commander led us in the Pledge of Allegiance.   Tim Spohn, Councilmember from City of Industry and David Argudo, Mayor from La Puente welcomed the attendees and thanked all in attendance.  President Laura Olhasso got our meeting started and our business was quickly wrapped up by Diane Martinez, CCCA Secretary/Treasurer and Paramount councilmember.  Sam Olivito provided a quick report and described some items that our staff and committee members have been engaged in as of late.  

The Comedy Sportz All-Star Team provided some great entertainment through their evening of improvisational comedy, including singing, storytelling and acting.  The evenings meeting once again provided an opportunity for our Board of Directors to conduct the business of the Association and a wonderful networking opportunity for our membership and Associate Members Program participants.  

Click Here to view photos from the evening. 

Proposition 26 Is Latest Limit On Local Revenues

On November 2, 2010, by a relatively narrow 53% margin, California voters approved Prop. 26 to convert some local fees to taxes requiring voter approval. Although, like most initiatives, the measure raises many questions, some initial guidance is possible.  

Background:  In 1997 the California Supreme Court decided Sinclair Paint Co. v. State Board of Equalization, upholding a fee imposed on businesses that make products containing lead to fund health services to children and to otherwise mitigate the social and environmental consequences of lead contamination.  The Court ruled that the use of the proceeds of a fee need not benefit those charged to avoid making the fee a tax as long as the fee bears a reasonable relationship to the burden imposed by those charged.  Similar fees have been proposed, such as fees on sweetened beverages to fund anti-obesity programs and fees on alcohol vendors to fund police services and public education efforts to address the adverse consequences of alcohol consumption. In addition, a number of proposals in the Legislature sought to avoid the two-thirds approval required for taxes, such as a proposed surcharge on vehicle license fees to fund state parks; and a 2010 action to reduce state taxes on gasoline, but to increase fees on gasoline to fund public transportation and other programs.

The Measure: The heart of Prop. 26 is its definition of “tax”: “As used in this article, ‘tax’ means any levy, charge, or exaction of any kind imposed by a local government, except the following ….” Seven exceptions to this sweeping definition are all that remain of local governments’ power to impose fees
without voter approval. The first of these covers fees “imposed for a specific benefit conferred or privilege granted directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of conferring the benefit or granting the privilege.” This should cover fees associated with planning and police permits, franchises, parking passes, and the like provided that those
fees are limited to cost of the permit program and the benefit or privilege “is not provided to those not charged.” If taken literally, this means that no one can be charged for a benefit or privilege if anyone gets it for free, thus prohibiting free passes for senior citizens and lower-income households. It certainly prohibits discounts or free passes if the cost of services to those
charged less than the full price is recovered from fees imposed on others – i.e., the measure prohibits crosssubsidies among fee payors by which some pay more than the cost of service so others may pay less or nothing.  It seems likely that discounts are permissible if funded from non-fee revenues, because the language of the exception is “those not charged” rather than
“those not charged in full.” Less clear is whether free passes can be subsidized with non-fee revenues while still allowing the City to impose a fee on others. Next are fees “imposed for a specific government service or product provided directly to the payor that is not provided to those not charged, and which does not exceed the reasonable costs to the local government of providing the service or product. This exception will cover utility fees not subject to Prop. 218, park and recreation fees that are not admission or equipment rental fees (which are governed by the fourth exception discussed below), transit fees, emergency response fees, and a wide range of other government fees. We believe this exception will apply to such inter-governmental charges as booking fees, property tax administration fees, etc.

Next are fees “imposed for the reasonable regulatory costs to a local government for issuing licenses and permits, performing investigations, inspections, and audits ... and the administrative enforcement and adjudication thereof.” This exception will cover a wide range of local government regulatory fees such as building permit fees, fire inspection fees, weed abatement assessments, alarm permit fees, and the like.  

The fourth exemption is for fees “imposed for entrance to or use of local government property, or the purchase, rental, or lease of local government property.”  Notably, this exception does not require the City to limit fees for use of its property to cost nor is this exception limited to real property. If the City makes personal property available for purchase or rental, it can charge whatever the market will bear.  Among the fees that will be protected by this exception are: franchise fees for which rights to use rightsof-way or other government property are provided, like cable, gas, electric, and pipeline franchises; and park and recreation entrance fees and equipment rental fees (but not fees for services, like classes).  

The fifth exception is for “[a] fine, penalty, or other monetary charge imposed … as a result of a violation of law.” This exception will include parking fines, administrative penalties imposed in the code enforcement context, late payment fees, interest charges, and any “other monetary charge imposed by” the City “as a result of a violation of law,” defining the last term broadly. 

The sixth exemption is for fees “imposed as a condition of property development. In general, most planning and building fees will fall within this exemption or one of the first three exceptions listed above.

Finally, Prop. 26 has no application to assessments and property related fees subject to Prop. 218. This will include retail (but not wholesale) fees for government water, sewer and trash services.

In light of this, what can we determine is plainly a tax requiring voter approval as a result of Prop. 26? For now, this list is short. It includes mainly the kinds of fees authorized by the Sinclair Paint case, like the state’s fee on lead-containing products, the alcohol impacts fees some local governments have imposed to address nuisance behaviors near alcohol vendors, and some air pollution district fees. It also appears to
prevent increases in the Fish & Game fees imposed on local governments to fund review of CEQA documents.  It may also require rethinking of some 1989 Act (non-property-based) business improvement districts to separate services to the public from services to the assessed businesses.

What to Do Now? Initially, we recommend local governments do the following:

• Don’t adopt a new fee or increase an existing fee without legal advice.
• Review existing fees to better understand the impacts of the measure and begin to plan to deal with its consequences.
• Consider segregating unrestricted fee revenue from revenues newly restricted by this measure to ensure that your agency can comply with the spending restrictions of the measure without imposing restrictions on funds that would otherwise be discretionary.
• Consider whether some fee obligations can be established by agreement rather than by legislation, such as a solid waste contractor agreement rather than a solid waste hauling “franchise” adopted by ordinance.
• Stay tuned! As always, the law in this area will develop over time and rapid developments can be expected initially. We’ll keep you posted!
  

Calendar of Events

December 1, 2010 - Executive Board Meeting

December 08, 2010 - ICA/CCCA Holiday Party at The City Club

December 09, 2010 - City Managers/Administrators Committee Meeting, Santa Clarita

December 15, 2010 - Board of Directors Meeting - Hosted by ALADS

December 25, 2010 - Merry Christmas!

December 27, 2010 - CCCA Staff Offices Closed

January 1, 2011 - Happy New Year!

January 3, 2011 - CCCA Staff Offices Closed

January 10-11, 2011 - Sacramento Legislative Orientation Tour - Hyatt Sacramento, CA