AgdaPkt 2005-07-25 - Laserfiche WebLink

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/ð-¿ Continued from Page 2 - League Applauds Budget Agreement... Be Sure to Say 'Thank You!' City officials should be sure to thank Gov. Schwarzenegger and their legislators for their leadership, and for producing a state budget that respects the important role local governments play in providing services and rebuilding the state's infrastructure. Be sure to also tell them how your city will be able to put the VLF gap loan repayment to work, providing services or paying for infrastructure needs in your community. ......................... Continued from Page 1- The Fine Print... . Prop. 1A ERAF shift from cities to state (-$350 million) . Prop. 1A ERAF shift from redevelopment agencies to state (-$250 million) . No booking fee subvention (Conference committee had proposed an appropriation of $25 million in FY 2005-06 for booking fee and VLF hardships, but this proposal was dropped in the final budget agreement. Remember: fees were capped at one- half administrative costs beginning FY 2005-06.) . Mandate Reimbursements - the obligation to repay past deferred mandate payments was extended to a 15-year payback period (vs. the current statute from last year's budget that said five-year payback). This budget also includes changes that would exempt the state from reimbursable mandate claims for specific Brown Act activities, an estimated cost to local governments and schools of approximately $21 million in FY 2005-06. ......................... Continued from Page 1- Early Repayment ofVLF Gap Loan... Who would have predicted that the loan would be repaid early? Just six months ago, fueled by the state's past record of borrowing from local government, many questioned whether the loan would be repaid at all. Even when the governor's May budget revision included early repayment of half of the amount, many observers expected the proposal to be rejected by the Legislature. It is well known that nearly 150 cities and counties securitized the VLF gap loan by selling to investors Notes secured by the state's promise to repay. These cities and counties received funds early last spring, but had to accept a discount ranging from 4 percent to 10 percent, depending upon amounts and circumstances for each agency. In all, over $650 million of the $1.2 billion was securitized, including Los Angeles County's stand-alone securitization. The securitization for all other cities and counties was accomplished through California Communities, the joint powers authority sponsored by the League and the California State Association of Counties. Now that repayment will come early, what happens to the cities and counties that sold their right to receive payments from the state? As it turns out, they'll be winners, too. Many of these agencies received the funds when they were needed to address budget issues in FY 2004-05. And the early repayment means there will be additional 3 .~..1r