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8A <br /> Page 3 <br /> State Mandate Suspension <br /> The budge#suspends several mandates of in#erest to cities including animal adop#ion, stolen <br /> vehicie noti�cation, and a few requirements related to DNA collec#ion and storage. <br /> Call#ornla Integrated Was#e Management Board <br /> As par#of the Budget Proposal,the California�n�egrated Waste Management Board (GfWMB}will <br /> �e dissolved as of Jan. 1,2010.All of the staff and#unctions of tt�e CIWMB will be transferred to <br /> a new Department of Resource Recovery. <br /> State Parks <br /> The Budget Proposal will cut approximately$8 million from the Department of Park ar�d <br /> Recreation budget.This wi11 (ikely mean the clost�re vf between 30 and 50 state parks.The exact <br /> number and decision on which parks will be closed has not been made and will depend on what <br /> poten�ial partnerships can be reached to keep add'it#onal parks open. <br /> `Prop.1A.'Continued fram Page�... <br /> Backqround: The League and CSAC were invol�ed in designir�g the 2003 VLF loar� <br /> securitization and sponsar the JPA that did that financing, Califomia Communities.Unlike state <br /> government,we have had direct experience with a similar transaction and are not convinced <br /> securitization of the Prop. 1A loan is feasible in this environment for the reasons stated below in <br /> response to the Assembly Republican Leader's comments. <br /> Leader's Commenf:There has been a lo#of discussion about 1a. I've heard ftom <br /> several local agencies tha#were unaware of the laan mechanism and repayment <br /> provisians that will accompany the suspension. <br /> Response:(1}the language of the Prop. 1A trailer bill has not been shared with the League, <br /> CSAC or CSCDA by legislative staff.These assurances below mean nothing unless the bill is <br /> writken properly, and past experience te!!s us it wil(not be; (2}there remain major complications <br /> with securitizing a Prop. 1 A loan, includirtg: <br /> • State's Damaaed Bond Ratina.The state's bond rating is just above junk band s#atus <br /> and financia!advisors te11 us i#can st�il go lower,'This is important because any <br /> securitization of the Prop. 1A loan reiies on the state's credit rating, Loca!agencies with <br /> strong credit ratings have beerr in the market for months attempting to selt thei�-TRANs, a <br /> routine short-term cashflow borrowing mechanism. Due to the anxiety in the market over <br /> anything even associated with California,they ha�e nvt been able to attract investors to <br /> p�rchase these no#es. <br /> • No Municipal Bond Insurance. Unlike#he 2003 VLF securitlzation wnich relied on <br /> _�, ., __ __ <br /> municipal bond insuranceT none exists today or is affordable.This means the cos#of the <br /> borrowing will be higher,and the language in the authorizing legisfation has to be 1Q0% <br /> workable tv even stand a ghost of a chance of doing it correctly(see City of Industry <br /> problem next�. <br /> • Citv of Indust�Triqqer.The reported inclusion of the"City oi industry"votuntary RDA <br /> plan will effectively kiH any securitization in 20Q9. No state or bonds can be issued with <br /> reliance on the state's credit between No�,20 and Feb. 1, �ecause the sta#e does not <br /> want to disclose confden#ial information about#he condition of the budget to the market. <br /> If the City of Industry"#rigger"is not pulled until December 1,that means a serious loss of <br /> prapetty tax funds for all local govemment for months after the December properiy tax <br /> distribution, creating significan#,unanticipated cashf�ow shortfalfs. This wifl undoubtedlv <br /> lead to cuts in public safetv and other services. <br /> 3 <br />