Local News RoundUp

The Local News RoundUp is the League's daily news clipping service of articles related to California cities and local government.

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April 27, 2017

How Trump's tax plan could hurt housing for LA's homeless (Southern California Public Radio)
President Donald Trump's proposal Wednesday to cut the corporate tax rate by 20 percent could wreak collateral damage on efforts to house L.A.'s growing homeless population. In November, voters in the City of Los Angeles passed Proposition HHH, which provides the city with $1.2 billion in bond money to build permanent supportive housing for currently homeless individuals. The money, it was calculated at the time, could help fund 10,000 new units of housing. But that calculation may change, experts say, should corporate tax reform go through.  Developers who build affordable housing rely on a patchwork of funding sources, and one of the biggest is private investment fueled by the federal Low-Income Housing Tax Credit program. Essentially, the program provides federal tax credits in exchange for cash used to finance affordable housing developments, like ones that house the homeless.
Skirmish at City Planning over vote on affordable housing rate (San Francisco Chronicle)
The Planning Commission is expected to weigh in Thursday on the highly charged fight over how much affordable housing builders should be required to include in market-rate developments. But before the hearing could even start, a pregame skirmish broke out over whether one of the seven commissioners should be allowed to vote. Critics say that Christine Johnson, one of four commissioners appointed by Mayor Ed Lee, should recuse herself because she recently took a job with SPUR, the urban think tank that mostly, but not always, takes positions favored by the city’s development community. Johnson told Lee in February that she planned to step down from the commission, but she agreed to stay on until the mayor found a replacement. In the meantime, she sought the advice of City Attorney Dennis Herrera, who sources say has determined that there is no conflict that would prevent Johnson from voting on the affordable housing policy legislation. In an unusual act, the San Francisco Ethics Commission on Monday voted to send a letter asking that Johnson recuse herself. The vote was taken despite the action being a violation of the Brown Act, which regulates open meeting laws for legislative bodies in California. Under the Brown Act, those bodies are forbidden from taking action on items not on the agenda — the Johnson matter was not on the agenda.
San Francisco
Anaheim is the latest Orange County city to ban marijuana-related businesses (Orange County Register)
Orange County’s largest city is banning commercial marijuana operations, including the cultivation, manufacturing and distribution of pot for recreational or medical use. With recreational pot use legalized by voters in November, the City Council chose Tuesday, April 25, to get ahead of the state’s planning for how to regulate related businesses. By early next year, officials expect the state to start issuing licenses for the commercial cultivation, transportation and purchase of recreational marijuana. City officials say the ordinance Anaheim is putting in place gives the city control of the issue, rather than deferring to yet-to-be-known state laws. The council’s move maintains the city’s stance against marijuana collectives. The city banned medical marijuana dispensaries in 2007; a judge upheld the city’s prohibition after it was challenged in 2011 by medical-marijuana patients. The city still has about dozen medical marijuana dispensaries running illegally. Since January,  adults age 21 and over have been allowed by state law to carry up to an ounce of marijuana or 8 grams of concentrated cannabis. Residents may also grow up to six marijuana plants at their home. The city’s ordinance, which will go into effect next month after a second ratifying vote, will also limit people to growing marijuana plants in their homes or backyards, but not in a front yard.
What should LAUSD do about its ballooning benefits costs? (Southern California Public Radio)
It's impossible to talk about the financial elephants on the back of the Los Angeles Unified School District, a blue ribbon panel concluded in 2015, without bringing up two things: pension and healthcare costs. By 2018, the district projects it will spend $1 billion on health care. By 2020, L.A. Unified's obligations to the two state-run agencies providing pensions to its employees will gobble up one out of every $10 that flows into the district's general fund. Now, with the May 16 run-off elections for two L.A. Unified School Board seats just weeks away, the question of how district leaders ought to handle these ballooning costs has surfaced in the campaign debate. In a recent debate between candidate Nick Melvoin and incumbent board president Steve Zimmer, Melvoin suggested district officials need to consider altering pension benefits for teachers and employees L.A. Unified hires in the future.
Cities in the Los Angeles County Division
Walnut Creek moves to set aside money for escalating pension costs (East Bay Times)
Lawmakers could soon begin socking away money for a looming hike in the cost of retirement benefits earned by city employees. At a recent study session on Walnut Creek’s growing pension problem, the City Council agreed to begin setting up a trust that will be used to address the soon-to-be-skyrocketing annual contributions the city must make to the state agency that administers public employee pensions. Lawmakers will adopt the trust and decide how much money to set aside at an upcoming council meeting. With the decision, the city joins more than 50 public agencies, including Alameda, Sausalito and Napa county, that have established — or are establishing — irrevocable supplemental pension trusts. The trusts allow an agency to set aside and invest funds, and then use the returns to help pay an annual contribution to the California Public Employees’ Retirement System, which manages retirement benefits for police and non-safety staffers. While Walnut Creek has existing budget surpluses and expects to see more in the coming years, higher-than-expected employer contributions could squeeze the operating budget, said Jeffrey Mohlenkamp, the city’s administrative services director. According to city data, the value of benefits earned by police as of June 30, 2015, is about $151 million, and about $188 million for non-safety staffers.
Walnut Creek
White House unveils tax plan that’s broad on goals, short on specifics (Sacramento Bee)
The White House announced a broad tax overhaul plan on Wednesday that would dramatically cut taxes for corporations, but it did not explain how the government would pay for the massive tax reductions. Treasury Secretary Steven Mnuchin and chief economic adviser Gary Cohn billed Wednesday’s announcement as a starting point for potential legislation and repeatedly said President Donald Trump’s administration would work with Congress before coming up with a more specific plan. The plan includes a 15 percent corporate tax rate, a 20 percentage-point drop from the current rate, along with the elimination of all tax deductions except for mortgage interest and charitable giving. Cohn and Mnuchin also said the estate tax, known by detractors as the “death tax,” would be immediately repealed. There would be three tax brackets for personal income – 10, 25 and 35 percent – instead of the current seven.
Antioch will face bankruptcy if half-cent sales tax expires, finance official says (East Bay Times)
The city’s top finance official is warning that unless Antioch reins in spending and renews a half-cent sales tax or finds another source of some serious money, it will be facing bankruptcy in the next few years. Finance Director Dawn Merchant recently raised the red flag at the first of half a dozen budget discussions that have been scheduled before the council adopts its two-year spending plan in late June. Approved in November 2013, the sales tax currently is generating more than $6 million annually for police and code enforcement — $6.68 million this fiscal year alone — but it is set to expire in four years and will require a city-wide vote to extend. Merchant is predicting trouble even before Measure C sunsets. Although the city expects to end this fiscal year with reserves in its general fund that are just over four times what policy dictates is the acceptable minimum, that safety net is expected to start dwindling rapidly in 2017-18. The year after that, expenses are projected to outstrip revenue significantly. Although the city temporarily can dip into its savings to make up the difference, six years from now there won’t have anything left if it doesn’t have Measure C or a comparable source of revenue, Merchant said.
California chills bill to block taxes on Netflix, Hulu (Bloomberg)
A bill to halt plans in dozens of California cities to tax streaming video services for five years is stalled for the year. Assemblyman Sebastian Ridley-Thomas (D) agreed to shift his A.B. 252 into an idea that lawmakers will study this year and take up again in 2018. The unanimous vote April 24 in the Assembly Revenue and Taxation Committee was a win for the powerful California Cable and Telecommunications Association, as well as cities, counties and the consulting firm MuniServices LLC, which has been helping cities figure out if their existing ordinances would allow such a tax. Pasadena, Calif., recently introduced a plan to tax streaming services, and Ridley-Thomas said at least 80 other cities are considering such a move. The local governments want the application of existing utility user taxes (UUT) on video streaming to replace revenue they are losing as more residents drop cable television service in favor of streaming services such as those from Amazon.com Inc., Netflix Inc. and Hulu LLC. Mark Nebergall, an attorney with McDermott Will & Emery in Washington, D.C., and founder of the Software Finance and Tax Executives Council (SofTEC), told Bloomberg BNA April 25 the delay could make local ordinances to tax streaming services more likely this year.
Cities take stand against California bill for 5G antenna placement (KCRA)
You may not think much about your cell phone's little 4G icon, but wireless companies are trying to make way for even faster 5G mobile technology. In addition to more cell towers, 5G would require powerful antennas called "small cells" to be installed throughout cities. Senate Bill 649, introduced by Sen. Ben Hueso, D-San Diego, would remove a city's ability to control where the technology is placed and transfer that power to the state. SB 649 passed the Senate Government and Finance Committee Wednesday in a 7-0 vote, and it will now head to the Senate Appropriations Committee. Some cities, including Roseville and Rocklin, are fighting back. Rocklin and Roseville join San Francisco, as well as the League of California cities, in their opposition to SB 649. The small cell antennas would be installed near homes, shopping areas, parks and schools on public property and public roads. The antenna equipment varies in size: from a large shoe box that would be attached to existing utility poles to new 120-foot poles. 5G proponents argue the technology is necessary to handle billions of connected devices. It would also help power autonomous vehicles.
Despite drought’s end, conservation rules were still in place in California – until now (Sacramento Bee)
First the drought ended. Now the last vestiges of mandatory conservation rules are over, too. California’s main water regulatory agency ended mandatory conservation regulations for urban residents Wednesday, following Gov. Jerry Brown’s official declaration that the drought ended April 7. The decision by the State Water Resources Control Board means urban water agencies no longer have to submit to “stress tests” proving they have enough water to withstand three straight years of dry weather. All other conservation requirements have ended, too, although Californians are still prohibited from engaging in “wasteful practices” such as watering their lawns while it’s raining or hosing down sidewalks. What’s more, urban agencies will have to continue to report their monthly water usage to the state.
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