TITLE
Recommendation to adopt resolution declaring that a fiscal hardship will exist within the City of Long Beach as result of the State’s borrowing of Highway Users Tax Account (HUTA) Funds. (Citywide)
DISCUSSION
The City of Long Beach receives approximately $8.5 million in Gas Tax (HUTA) funds annually from the State of California. The State is allowed to borrow HUTA revenue from local agencies within a fiscal year to address its cash flow needs. For the second year in a row, in March 2010, the Legislature passed legislation delaying HUTA revenue payments to local agencies as a way to deal with anticipated State cash flow problems in Fiscal Year 2011. The specifics of the State's plan stipulate that the first nine months' (July 2010 through March 2011) payments are to be made to local agencies in one lump sum in April 2011. This represents the delay of $6.37 million in HUTA payments to the City over that period. The March 2010 legislation allows for cities to formally submit a Hardship Exemption request so as to be removed from the deferral plan, subject to approval by the State.
As part of the City's submission of a Hardship Exemption request seeking relief from the deferral of HUTA, and Pursuant to Government Code Section 16325.5, it is recommended that the City adopt a resolution declaring that a fiscal hardship will exist as result of the State borrowing of the HUTA funding.
This matter was reviewed by Assistant City Attorney Heather A. Mahood on April 26, 2010 and Budget Management Officer Victoria Bell on April 23, 2010.
TIMING CONSIDERATIONS
City Council action on this item is requested on May 11, 2010, as the Hardship Exemption request must be submitted to the State by May 17, 2010.
FISCAL IMPACT
The City of Long Beach is in a unique position, due to its fiscal year beginning on October 1, and the State's fiscal year beginning on July 1. The State's proposed temporary borrowing of the July, August and September 2010 HUTA payments poses a di...
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