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2004
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CITY OF DIAMOND BAR
CITY COUNCIL AGENDA
FEBRUARY 3, 2004
Next Resolution No.2004-
Next Ordinance No. 01 -
STUDY SESSION: 5:00 p.m., Government Center/AQMD Room
CC -8, 21865 Copley Dr.
Lewis/Calvary Chapel Retail Center Update
Public Comments
CALL TO ORDER: 6:30 p.m.
PLEDGE OF ALLEGIANCE: Mayor
INVOCATION: Captain/Chaplain Tim Stromer, L.A. County
Fire Department Public Affairs
ROLL CALL: Council Members Chang, Huff, O'Connor,
Mayor Pro Tem Herrera, Mayor Zirbes
APPROVAL OF AGENDA: Mayor
SPECIAL PRESENTATIONS, CERTIFICATES, PROCLAMATIONS:
1.1 Presentation of City Tile to Don Hensley, retired Parks & Maintenance
Superintendent.
1.2. Introduction of new employees: Anthony Jordan, Parks and Maintenance
Supervisor and Sam Ghaly, Deputy Building Official.
BUSINESS OF THE MONTH:
1.3 Presentation of City Tile to Firestone Tire and Service Center as Business
of the Month, February 2004 and display of Business of the Month video.
CITY MANAGER REPORTS AND RECOMMENDATIONS:
3. PUBLIC COMMENTS: "Public Comments" is the time reserved on each
February 3, 2004 PAGE 2
regular meeting agenda to provide an opportunity for members of the public to
directly address the Council on Consent Calendar items or matters of interest to
the public
that are not already scheduled for consideration on this agenda. Although the
City Council values your comments, pursuant to the Brown Act, the Council
generally cannot take any action on items not listed on the posted agenda.
Please complete a Speaker's Card and give it to the City Clerk (completion of this
form is voluntary). There is a five-minute maximum time limit when addressing
the City Council.
4. RESPONSE TO PUBLIC COMMENT: Under the Brown Act, members of the
City Council may briefly respond to public comments but no extended discussion
and no action on such matters may take place.
5. SCHEDULE OF FUTURE EVENTS:
5.1 TRAFFIC AND TRANSPORTATION COMMISSION MEETING — February
12, 2004 — 7 p.m., Government Center/AQMD Hearing Board Room —
21865 Copley Dr.
5.2 YOUTH MASTER PLAN STEERING COMMITTEE MEETING- February
6, 2004 - 11:00 a.m., Government Center/AQMD Room CC2, 21865
Copley Dr.
5.3 PLANNING COMMISSION MEETING — February 10, 2004 — 7 p.m.,
Government Center/AQMD Auditorium, 21865 Copley Dr.
5.4 PRESIDENT'S DAY — February 16, 2004. City offices will be closed and
will reopen on February 17, 2004.
5.5 CITY COUNCIL MEETING — February 17, 2004 — 6:30 p.m., Government
Center/AQMD Auditorium, 21865 Copley Dr.
6. CONSENT CALENDAR:
6.1 CITY COUNCIL MINUTES —
Study Session of January 6, 2004 — Approve as submitted.
Regular Meeting of January 20, 2004 — Approve as submitted.
Requested by: City Clerk
6.2 PLANNING COMMISSION MINUTES — Regular Meeting of December 23,
2003 - Receive and file.
Requested by: Planning Division
February 3, 2004 PAGE 3
6.3 PARKS & RECREATION COMMISSION MINUTES — Regular Meeting of
November 20, 2003 - Receive and file.
Requested by: Community Services Division
6.4 WARRANT - Approve Warrant Register dated January 22, 2004 and
January 29, 2004 in the amount of $1,835,086.61.
Requested by: Finance Division
6.5 TREASURER'S STATEMENT - month of December 2003.
Recommended Action: Review and approve.
Requested by: Finance Division
6.6 APPROVE JOINT USE AGREEMENT WITH DIAMOND BAR LITTLE
LEAGUE FOR CITY USE OF LITTLE LEAGUE COMPLEX AND
APPROPRIATION OF $20,200 FROM GENERAL FUND RESERVES TO
FUND PAYMENT.
Recommended Action: Approve.
Requested by: Community Services Division
6.7 APPROVE INCREASE IN CONTRACT AMOUNT FOR CITY
PROSECUTOR SERVICES PROVIDED BY DAPEER, ROSENBLIT &
LITVAK, LLP.
Recommended Action: Approve.
Requested by: Planning Division
6.8 LEGISLATIVE MATTERS — PROPOSITIONS 57 AND 58
(a) ADOPT RESOLUTION NO. 2004-07 SUPPORTING
PROPOSITION 57: THE ECONOMIC RECOVERY BOND ACT — A
STATEWIDE INITIATIVE TO HELP RETIRE THE STATE DEBT.
Recommended Action: Adopt Resolution.
(b) ADOPT RESOLUTION NO. 2004-08 SUPPORTING
PROPOSITION 58: THE CALIFORNIA BALANCED BUDGET
ACT.
Recommended Action: Adopt Resolution.
Requested by: City Manager
February 3, 2004 PAGE 4
7. PUBLIC HEARINGS:
8. COUNCIL CONSIDERATION:
9. COUNCIL SUB -COMMITTEE REPORTS/COUNCIL MEMBER COMMENTS:
10. ADJOURNMENT:
CITY OF DIAMOND BAR
CITY COUNCIL STUDY SESSION
JANUARY 6, 2004
STUDY SESSION: Mayor Zirbes called the Study Session to order
at 5:05 p.m. in Room CC -8 of the South Coast Air Quality Management
District/Government Center, 21865 Copley Dr., Diamond Bar, CA.
Present: Council Members Chang, Huff, O'Connor,
Mayor Pro Tem Herrera and MayorZirbes.
Also Present were: Linda Lowry, City Manager; Mike Jenkins, City
Attorney; James DeStefano; Deputy City Manager; David Doyle, Deputy City
Manager; David Liu, Director of Public Works; Bob Rose, Community Services
Director; Linda Magnuson, Finance Director; Nancy Whitehouse, Executive
Assistant; Ann Lungu, Associate Planner; Fred Alamolhoda, Senior Engineerand
Lynda Burgess, City Clerk.
Construction Bond Financing Discussion (Kosmont)
Election/Temporary Signs
Public Comments
1) CONSTRUCTION BOND FINANCING DISCUSSION (KOSMONT)
CM/Lowry explainedthat at the last study session, the bond financing plan
that was accepted a year ago was reviewed. She indicated that it was
determined that there was a need to learn more about the letter of credit
that was issued, how it fit into the financing structure and what possible
options the City might have in the future to be able to eliminate that
ongoing cost. At Council' sdirection, she stated that staff contacted Mr.
Larry Kosmont (Kosmont and Associates) and Mr. Eric Scriven (U.S.
Bancorp/Piper Jaffray) who prepared information about the financing, the
letter of credit and future options for the City about how the City might
want to budget in the future and address the question about early pay
down as well as optionsfor using the letter of credit.
Mr. Kosmont reported that there are a number of alternatives available to
the City. He explained that he and Eric both felt that the timing of the
bond issue last December was probably impeccable from the City' s
standpoint. He said that the City managed to capture low interest rates
which prevailed through the year and, based on the Council' sdecision to
choose a variable rate, resulted in a significant interest rate savings
because the market really achieved record lows through the whole year.
Further, he said that the City beat what has become a torrent of state
problems a nd missed some of the congestion points in the marketplace
due to the uncertainty of the state having issued bonds, then not issuing
them, then going through a recall, then being downgraded. He felt that the
City timed the window of opportunity perfectly both in terms of bond
activities, the creditrating, concerns about California, the environment in
and of itself and then through interest rates. Throughoutall that, the City
JANUARY 6, 2004 PAGE 2 CC STUDY SESSION
was able to issue $13,755,000 worth of bonds and protected its reserves
which he felt was also a very fortuitous decision because nothing has
been decided at the State level in terms of preserving the VLF or back-
filling it, the level of back -fill, the permanence of back -fill and all the issues
surrounding local government tax revenues as subvened by S tate. He
pointed out that another victory by the City is that the Community Center is
very close to being finished and will have its own set of operating
revenues and expenses. He stated that the City still has $25,000,OOOor
more in its pocket that are not hampered by the current financial milieu
that is affecting all cities. He referred to Page 2 of his handout containing
an outline showing the lease revenue bond facts, the City' s budgeting
issues around paying the semi-annual payments and the Letter of Credit.
The City pays for a variable bond that provides the City certainty that there
are funds availableto pay the short interest rate. He explained that it was
originally estimated that the variable interest rate would be at 3.5% but the
City achieved a level of approximately 1.09% for the last year which saved
the City nearly $500,000 in pure costs. He offered that the City now has
choices regarding how to budget for the expenditures to sustain the
current scheme, on cashing it in and choices on self-financing a variable
cushion. Regarding Page 3, he indicated that the original program
objectives were to preserve some capital, fund the community center and
minimize the cost of capital which worked well with the low interest rates.
Further, he explained that on Page 4, one of the objectives in preserving
capital was to enable staff to engage in real estate transactions to fulfill a
an economic development strategy. He stated that the City gained
additional leverage for in volvementin the real estate market to allow
transactions that will bring in future revenue. He reminded everyone that
the initial bond principal was $13,775,OOOthirteen months ago with a final
maturity date of 2033. He explained that the variable rate bond for 10
years with a 4.5% interest rate cap carries with it an integral Letter of
Credit which is the real pool of cash. He further pointed out that, because
the rates have been low. the City hasn' shad to pay a surplus or a penalty
for that caa. Mr. Kosmont referred to Page 6 of his handoutand indicated
that the City has some cushion in marketplace performance and could
establish internal controls on budgeting to accelerate payment of the
bonds in the future.
Mr. Scriven reported that the City paid Union Bank and CaISTRS a fee to
provide liquidiV and creditvia the Letter of Credit. He explained that, in
order for investors to have confidence in the variable rate feature, it is
essential that they have weekly liquidity. Regarding the credit feature, he
explained that that is in case the City defaults, a larger financial institution
will be behind it and the portion of the annualfee that is being paid to the
two banks or the two financial institutions goes to the credit supportto
stand behindthe City.
JANUARY 6, 2004 PAGE 3 CC STUDY SESSION
C/Chang explained that that was the main reason the City invited Mr.
Scriven and Mr. Kosmont because the Council didn' treally know exactly
why that credit was needed. He asked why the City needs the Letter of
Credit, at an annual cost of $150,000, when there are $20,000,000 in
reserves providing the ability to pay off the bond.
M/Zirbes stated that he felt the Council knew the fees up front. He stated
that whenever a Letter of Credit is opened, new fees will be established.
He felt that the Council was not really focused on the fact that there was
going to be an annual charge of $150,000 for the two instruments.
Mr. Scriven responded that first, $13,755,000 is a very small bond issue
for variable rate structures. He explained that investors are typically
looking for $30,000,000 to $50,000,000 to invest in on a weekly basis and
they want to deal with known institutions. Diamond Bardid not have any
debt in the marketplace and was an unknown even though the balance
sheet was very good. He felt that the City could obtain a rating in the high
A' s,perhaps a low AA rating. He said it might give the City the opportunity
to test the waters to provide its own liquidity, b utthere are costs to
providing liquidity. He reported that one of the costs would be that the
marketplace would demand that the City dedicate some of its liquid cash
(money in the bank) to the repayment so that everything is in place for a
turn -around on a day's notice to get the money to the financial institutions.
He estimated that the fund dedication would probably be in the range of
1'/2 to 2 times the outstanding balance.
Mr. Scriven further explained that there are two pieces the City is paying
for — liquidity and credit support. He stated that the payment is
approximately 110 basis points of outstanding par for liquidity. The fee will
decline as the balance declines He said that, ofth e 110, approximately
25 to 30 basis points are paid for the liquidity to Union Bank/CaISTRS
while the other 75 basis points are for credit support. He explainedthat in
the current marketplace, credit support and liquidity cannot occur with a
credit rating under AA. He said that Union Bank does not have an AA
rating so CaISTRS is providing back up. He reported that there are lots of
AAA and AA banks that provide singular letters of credit without a
confirming letter of credit behind them. In looking back to December 2002
when the transaction was being underwritten, U.S. Bancorp/Pipe Jaffray
talked to a lot of different market players and discovered that there were a
couple of things that were working againstthe City which included being a
first-time issuer. He stated that the City' s financials were extremely
strong, but being a first-time issuer with a transaction that is small for the
variable rate marketplace did not work in the City' s favor. He stated,
however, that the bid and the fee that the City is paying is a good fee
because it' sbased on the profile that Council wanted to take and the
strategy undertaken. He reported that options are now available because
the Diamond Bar Center is nearing completion so the construction risk will
JANUARY 6, 2004 PAGE 4 CC STUDY SESSION
soon be eliminated; the City now has a history in the marketplace and
other markets are available that have emerged in the last 12-15 months
for issues of this size.
C/Chang understood that the City was basically punished because, even
though it' sfinanciallysolid, the City didn' have any credit history.
Mr. Scriven responded that strong financials could overcome a first-time
borrowing situation, but that the current market demands names that are
recognizable.
C/Chang asked whether having a letter of credit would be avoidable?
Mr. Scriven explainedthat other options are available to the City but they
would depend on whether the City' sstrategy would continue in its current
direction. He stated that the City' sstrong surpluses make it very attractive
given that most other cities are doing poorly, thus this is very good if the
City wants to get a better deal.
Mr. Kosmont stated that the City could look into converting from a Letter of
Credit into an auction -rate bond structure.
C/O' Connorasked whether, since Union Bank is not AA rated, are there
other banksthat are AA rated?
Mr. Scriven responded that there are also banks rated AAA and that it
would have been less expensive to have accomplished the transaction
with an AA or AAA bank. He stated that CaISTRS backing would not have
been necessarywith a higherrated bank.
Mr. Scriven explained that numerous AA and AAA banks were contacted
regarding the offer but the bond amount was too small for many of them.
He further stated that it was late in the year, many had hit their allocation
ceilings and several were nervous about California generally.
C/O' Connorasked if it would be possible now to change to a bank with a
better rating?
Mr. Scriven responded that he would recommend doing just that. Since
the construction has not been completed yet, and since the City just paid
an annual fee, he recommended discussing the matter again mid -year
regardless of the strategy the Council is interested in implementing. The
Council can then consider upgrading the overall Letter of Creditprogram,
looking into the feasibility of self -liquidity, discussing whether a fixed rate
ora uction-rate structure would be more advantageous rather than a
variable rate.
JANUARY 6, 2004 PAGE 5 CC STUDY SESSION
Mr. Kosmont agreed that it would be better to finish construction on the
D.B. Center before looking into changing strategies. He pointed out that
the interest rate market is still working for the City right now.
M/Zirbes felt that the product being used at this time has worked better
than anticipated considering the low interest rate. He stated that the
Council was surprised atthe last study session regarding the $150,000
annual Letter of Credit fee. He agreed that there will be a cost to
changing the financing structure.
Mr. Scriven pointed out that there' sno cost to get out of the situation
because the City has complete pre -payment flexibility. He said that the
flexibility is fairly standard in variable rates so the City can pay off the
bond with the money currently in the bank with no penalty. However, he
stated that with a restructuring of the transaction and the type of deal
negotiated, legal costs would apply as well as underwriting costs to resell
and restructure it. Further, he said that there was a potential for some
credit enhancement costs.
Mr. Kosmont stated that the City would not be restructuring unless a net
savings could be realized.
C/Chang stated that he personally felt that the City is on the right track
and that itis not wise to pay off the bond at this time especiallysince so
much was spent to build up the credit and the City could use the funds for
some other development. Regarding the annual Letter of Credit cost of
$150,000 every year, he asked if there would be a way to avoid that cost
or reduce it.
Mr. Scriven explained that on Page 8 of the handout, three very
straightforward alternatives are outlined. He stated that there are different
strategies based on the City' s choice to stay flexible for 2 to 3 years or
flexible for 5 years. He stated that a packet would be given to CM/Lowry
about providing liquidityand getting a rating on the City. He said he would
like to follow up and discussthe liquidity issue. He suggestedthat the City
should rate a high single A or even AA with its current financial situation
and with an AA rating, the City may be able to provide its own credit. He
pointed out that if the City needed to keep some sort of credit facility
behind it, it would cost a fair amount per year depending on the way it is
structured. If the Council is interested in self -liquidity, there are costs for a
dedication of funds creating flexibilitywhich remains as long as the bonds
are outstanding. He suggested that if the City had an emergency and the
funds are neededfor a temporary use, the covenants cannotbe broken on
the transaction.
Mr. Kosmont explained that some cities have gone too far with pledges
and when they needed the money for another use, they couldn'.t He said
JANUARY 6, 2004 PAGE 6 CC STUDY SESSION
that the credit rating issue is important for the City and that he should help
acquire it because the credit can add savings to a transaction in a
public/private partnership. Regarding providing liquidity, he stated that the
City would want to be comfortable with the constraints of the liquidity
because removing some of the layers of pledges cannot be removed
quickly enough or inexpensively enough. He explained that Mr. Scriven
was saying was that the range of flexibility will increase or decrease based
on the City' scredit rating.
Mr. Scriven explained that in researching the costs associated with the
Letter of Credit, he discoveredthat there aren' transactions the size of the
City' sthat have self liquidity.
In response to Mr. Hennessee, Mr. Kosmont explainedthat the City would
be providing its own debt coverage instead of paying for it with a Letter of
Credit, which would lower the cost each borrowing year.
In reply to CM/Lowry, Eric stated that the current fixed rate for a 30 year—
AAA transaction is approximately 4.75%.
Mr. Kosmont suggested that, in order to be cautious, the rate should be
considered at 5%.
Mr. Scriven reported that the third option shown on Page 8 of the handout
is a relative new structure called an "auctior+rate structure" which is very
similar to a variable rate. He explained that the most common rate type of
auction rate transaction is a 35 -day reset or auction versus the most
common variable rate at a 7 -day reset and they trade at about 5-10 basis
points higher than the 7 -day. Further, he stated that with an auction rate,
the need for a liquidity provideris eliminated because the transaction is
cleared every 35 days with the auction. He said that the City would need
to purchase a municipal bond insurance policy and that, using a AA ratin g
and not purchasing bond insurance for this size of transaction could still
be problematic. I f the City were to get a AAA insurance policy, the City
would pay that cost and the annualized cost ofth e policy plus 10 basis
points premium on the 7 -day. He said that the auction costs would be
approximately50 basis points versus the 110 basis points paid by the City
right now. The same type of pre -payment optionswould exist and there
would be no cost to get out of the current structure. He said that there
would be some costs to get into the newtransaction. The insurancepolicy
would be priced on the City of Diamond Bars regular underlying rating —
high A or low AA-, or AA and that would make a very economical bond
insurance policy. He further stated that there would be some legal costs
for underwriting but the fee would be lower because the transaction was
just structured within the last year. There would also be other costs of
insurance for restructuring.
JANUARY 6, 2004 PAGE 7 CC STUDY SESSION
CM/Lowry asked if the City would lose all the value of the cap purchase
last year?
Mr. Scriven explained that the cap would stay in place and it is an asset,
not an expense. The City actually purchased a contract which could be
sold back to J.P. Morgan for its value. The value of th a cap goes up if
rates go up. He stated that rates have gone down slightly from 5.0% to
4.75%so ithas been amortized by1/10thplus the capwhich carries
forward to whatever auction or variable rate deal the City ends up with or it
could be sold. He said thatthe City might also trade the cap, shorten itto
five years or restructure the transaction dependingon the City' sstrategy.
CM/Lowry wondered why the contract for the cap would have value to
anybody other than the City when the contract — isn' tit made between the
City and J.P. Morgan and the City' sability to do business? She felt that
this subject might be one for discussion at another Study Session.
Mr. Scriven replied thatthe contract is insurance essentiallyand there' sa
large part of it that J.P. Morgan is o n the hook for that has not been
amortized.
C/Chang stated that none of the alternatives seem to fit the City right now.
Mr. Scriven explainedthat anotherscenario would be to re -bid the existing
situation after the Diamond Bar Center is completed. He said that the City
would have approximately a year and a half after construction so the
rating would probably reach A+ or AA- leading to a successful re -bid for
another Letter of Credit.
M/Zirbes stated that that would leave the City in basically the same
position but with a lower annual cost. He felt that the City should explore
the other alternatives.
Mr. Kosmont pointed out that the construction phase needs to be
completed before re-evaluatingthe City' salternatives.
CM/Lowry reiterated that the auction option would keep the bond on the
market 5 times longer since it can only be turned around every 35 days
instead of every week.
Mr. Scriven affirmed CM/Lowry' sstatement and said that the key features
of an auction rate are the same as the variable rate but lower in cost. He
stated that if the City went with an auction rate structure, paying it off in
one year would not be beneficial. It would take the City 2-3 years to
recoup its costs. He said that the insurance would cover the issue if the
City were to keep it outstanding for 30 years. He recommended that the
Council reassess what they want to go and, based on that, he would
JANUARY 6, 2004 PAGE 8 CC STUDY SESSION
research the liquidity issue. He asked if the City wanted to drop the
subject of a fixed-rate alternative.
M/Zirbes asked the Council if they would be interested in self -liquidity and
utilizing the City' sown money?
C/O' Conno- felt that the numbers would have to be available before the
Council considersthe matter.
MPT/Herrera stated that she would not be in favor of the City hanging on
to the $13.7 million debt.
C/Chang suggested that the City keep the current status and look into re-
bidding after the construction of the Center is completed:
M/Zirbes felt that if the Council understood the cost factors involved, a
strategy could be devised that would clarify where the City should be
when the cap expires in 10 years. He suggested the auction rate strategy
should be looked into in the nearfuture.
C/Chang said that the costs of the Letter of Credit then, are the costs of
being in business.
Mr. Kosmont verified C/Chang' sstatement.
CM/Lowry pointed out that the City is still making money with the 2%
interest on the Letter of Credit versus approximately 1 1/2% paid out.
C/Chang felt that the issue should be reviewed with the City Council every
year.
Mr. Scriven suggested that the issue be agendized for discussion early
each fiscal year since the anniversary date is in December so that the
decision can be made whether to s tay with the present structure or
change it.
Mr. Kosmont also suggested that there would be a huge benefit to the City
to look into its credit rating soon after the construction is finished and the
payments are made.
Mr. Scriven stated that he had checked on that and the City could do it for
a fairly reasonable amount which would be under 10, potentially at $5,000.
Mr. Kosmont suggested that another meeting should be held in late
Spring. He said that he and Mr. Scriven would prepare a small summary
and send it to the City Manager.
JANUARY 6, 2004 PAGE 9 CC STUDY SESSION
Mr. Scriven stated that even though no prediction can be given on the rate
of the Letter of Credit since it will depend on the market, but he could
provide some indications for the Council.
M/Zirbes stated that the Council consensus indicated agreement to meet
again with the consultants at the end of Spring.
Council consensus was to continue this matter to a later date for
consideration but asked to view the slide presentation prepared by staff.
DCM/DeStefano explain ed that Council asked to re -visit the issue
approximately a year ago because of concerns regarding aesthetics and
distractions to motorists by signs in rights-o�way. He reminded Council
that a goal had been established in the beautification plan section of the
Goals and Objectives to deal with election signs. He reported that, priorto
review by the Planning Commission in early 2003, the City Attorney made
recommendations based on case law. Further, he said that staff
conducted surveys of other cities, selected approximately 12 and
compared them to the City' s process. The Planning Commission
reviewed the issue and last August recommended that no changes be
made to the policy. The matter was brought back to the City Council in
September and because oft he proximity to the election, the Council
directed staff to bring it back after November. He explainedthat the slides
being shown were photographs taken November 4, 2003, Election Day
and went on to describe each slide.
DCM/DeStefano reported that the current sign regulations are in an all-
encompassing section of the code called "Temporary Signs" which
addresses not just campaign signs but signs advertising other activities
that occur in the next few weeks. In addition some types of temporary
signs are included such as yard sale signs and some other types of
signage. He reiterated that the Planning Commission said that they didn' t
see a need to make any changes but were concerned about couple of
aspects of the recommended changes. He said that one of their concerns
is that the recommended changes attempt to deal more closely with
current philosophies and the result of some court cases and seemed to
deal more with the issue of getting the signs out of the right-of-way.
Concerns expressed by members of Council and some residents involve
the proliferation of signs in the right-of-way to the extent that it looks
horrendous during election time. Some cities, Walnut for example, strictly
prohibit signs in the right-of-way. He said that about 8 out of the 12 cities
looked at by staff prohibit signs in the right-of-way. Brea, on the other
hand, encourages signs in the right-of-way and on light poles, etc. He
pointed out that the City has a 30 -day requirement before an election
during which election signs can be placed. He said that in making a
JANUARY 6, 2004 PAGE 10 CC STUDY SESSION
recommendation in line with what other cities are doing and from case
law, would be to expand that to as much as 60 days.
C/O' Connorasked if DCM/DeStefano was talking about the public right of
way or private property.
DCM/DeStefano explainedthat he meant both public and private.
C/O' Connorexplained that she thought campaigns were placing signs on
private property about 60 days in advance so the recommendation would
be to change posting of signs in both public and private areas to 60 days
in advance of an election.
CA/Jenkins responded that the recommended languagewould be to notto
allow signs on the public right-of-way at all so the 60 days would only
applyto private.
DCM/DeStefano reported that the Planning Commission liked the areas
where signage restrictions were more restrictive than relaxed. For
example, he said that the Commission did not like the recommendation
that signs be allowed to be posted 60 days in advanceand seemed to be
more comfortable with getting the signs out of the right-of-way and only
allowing them on private property. He further reported that one of the
areas looked at by the Commission would be the possibility of reducing
the square footage of signs so instead of having six square foot signs
perhaps they should be limited to five square feet, particularly in
residential zones. He said that, on the other hand, the Commission
seemed to support the idea of allowing up to 12 feet, which is somewhat
an arbitrary number, in commercial and industrial zones.
In response to C/O' Connor' squestion regarding the size of signs placed
by C/Huff and MPT/Herrera in the last election, C/Huff stated that the size
was approximately 22 x 24.
C/Huff asked C/O' Connorto explain the types of changes she would like
to see.
C/O' Connorstated that if candidates are not allowed to use the public
right-of-way, that she was concerned that the signs would end up on
private property slopes, for example, D.B. Blvd. between Lorbeerand Tin
Dr. rather than in tree wells. She said she felt that homeowners on the
tops of the slopes would not remove the signs even though they had not
given permission for the signs to be located on their property. She further
stated that she would like to see some sort of penalty attached to the
improper placement of signs but admitted that that would be problematic
because other parties could take down legally -placed signs and move
them to illegal locationsjustto penalizean opposing candidate. She
JANUARY 6, 2004 PAGE 11 CC STUDY SESSION
suggested that in the staff recommended amendment, section (5) f be
amended to read "Wherea sign is erected on a vacant lot, or in a multi -
tenant commercial center or in a location of a residential lot that is not
visible from the residence, the candidate causing the sign to be erected
must have written permission from the property owner on file with the
City. Further, she suggested designation of certain corners in the City
where signs would be allowed and each campaign would be allowed to
place one sign per corner. She wondered whether this type of limitation
would violate First Amendment rights.
CA/Jenkins reminded Council that this area of the law is very heavily
constrained by First Amendment considerationsand reported that a great
deal of what Council would like to do cannot be done. He pointed out that
currently, the entire public right-of-way is designated as a public forum for
the erection of signs of all kinds but he felt that the City could reduce open
signage to only specific areas. He further felt that the City has more
flexibility when dealing with the number of days in advance of an election
for posting signs on public property than with private property because a
property owner is allowed to express himself on election issues and the
court seems to think that allowing 60 days in advance for posting election
signs on private property is justified.
C/O' Connorstated "Sowe could designate24 inches.."
CA/Jenkins responded that that could be done. He stated that
C/O' Connor' s;omments reflected that she was searching for a way within
the constraints of case law to deal with the slopes issue and the
commercial parking lot issue and the vacant property issue. He pointed
out that the City cannot require campaigns to get property owner
permission on file in advance but if City staff were to ask for evidence of
the property owner' spermission and they don' thave it, then staff could
remove the sign(s) in question.
C/Huff stated that putting up signs is not the most effective way to get the
message out. He said he would not be against eliminating permission for
signs to be placed in the public right-of-way and pointed out that the City
of Walnut has a very aggressive enforcement programwhere signs are
placed on private property but there is not a plethora of signs plastered all
over the place. Further, he stated that the City of Chino Hills also has very
effective controls with no public right-of-way issues. He stated that he' do
come to the conclusion that the City' sregulations should be tightened up,
if possible.
CA/Jenkins reported that there is case law prohibiting cities from forcing
candidatesto produce written permission priorto being allowed to put up
their signs.
JANUARY 6, 2004 PAGE 12 CC STUDY SESSION
C/Chang recommended that the City remove permission for signs to be
placed in the public right -of-way, not designate certain areas for
placement of signs and not allowsigns to be placed on vacantprivate lots.
MPT/Herrera stated that the proliferation of signs do not botherher.
M/Zirbes stated that it appeared as though further discussion would be in
order but that he wasn' tsure whether it should take place at this meeting.
He suggested that the matter be placed on a future study session so that
more time could be devoted to it. He felt that staff had received direction
from Council on what they like and where they want to be able to move
with the regulationsin anotherstudy session.
DCM/DeStefano stated that staff has notes regarding Council' sthoughts
but that there wouldn' the enough time atthis meeting to develop a
consensus. If Council wishes, the matter can be scheduled for further
discussion at another time. He said he felt that staff would need more of a
direction from the entire Council in order to know how to amend the
current regulations.
C/O' Connorasked if Council would agree to have staff come up with
designated areas?
C/Huff stated that he was in agreement with that and suggested that
perhaps the corner of some park sites would be suitable.
C/O' Connorrequested staff to go through some of the major arterials and
see what they would recommend while limiting the placement to one sign
per candidate. She felt that if the City designated only 20 places for the
signs, the candidate would only have to order 20 signs.
C/Huff suggested that the matter be included in the regular City Council
Agenda as well as on the Study Session Agenda for the same meeting.
ADJOURNMENT: With no further business to co nduct, M/Zirbes
adjourned the Study Session to the regular meeting at 6:29 p.m.
LYNDA BURGESS, City Clerk
JANUARY 6, 2004 PAGE 13 CC STUDY SESSION
The foregoing minutes are hereby approved this 2nd dayof February, 2004.
ATTEST:
BOB ZIRBES, Mayor
Agenda No. 6.1
MINUTES OF THE CITY COUNCIL
REGULAR MEETING OF THE CITY OF DIAMOND BAR
JANUARY 20, 2004
STUDY SESSION: Mayor Zirbes called the Study Session to orderat 5:37
p.m. in RoomCC-8 of the South Coast Air Qu alityManage mentDistrict/Government
Center, 21865 Copley Dr., Diamond Bar, CA.
Present: Council Members Chang, Huff, O' Connor,Mayor Pro
Tem Herrera and Mayor Zirbes
Also Present: Linda Lowry, City Manager;Greg Kovacevich, Assistant
City Attorney; J im De Stefano, Deputy City Manager; David Doyle, Dep uty City
Manager; David Liu, Public Works Director; Bob Rose, Community Services
Director; April Blakey, Public Information Manager;Nancy Whitehouse, Executive
Assistant; Ann Lungu, Associate Planner; Sara West, Recreation Supervisor; Fred
Alamolholda, Senior Engineer; Sharon Gomez, Senior Management Analyst; Jim
Clarke, Consultant, Leticia Pacillas, L. A. County Fire Protection District and Lynda
Burgess, City Clerk.
Update on Diamond Bar Center Grand Opening Event Plans
City of Industry Business Center Project
Public Comments
RECESS: M/Zirbes recessed the Study Session at 6:20 p.m
CALL TO ORDER: MayorZirbes called the regular City Council meeting to
order at 6:34 p.m. in the Auditoriumof The Government Center/SCAQMD, 21865 Copley
Dr., Diamond Bar, CA.
At the request of M/Zirbes, CM/Lowry announced that during the Study Session, staff
presented a review of the progress made and planning for the grand opening of the
Community Center. She said that there were questions about prospective costs and staff
needed direction from Council about some of the details regarding the dinner. She
reported that staff received that direction from Council and will proceed with the event in
accordancewith the budgetas ithas been prepared and included in ourbudgetdocument.
She further reported that a presentation from staff regardingthe City of Industry Business
Park was scheduledto take place at the Study Session but, due to time constraints, that
presentation was continued until after the regular business meeting.
PLEDGE OF ALLEGIANCE: The Pledge of Allegiancewas lead by C/Connor.
INVOCATION: The Invocation was given by Pastor Bob Stebe,
Northminster Presbyterian Church.
ROLL CALL: Council Members Chang, Huff, O' Connor,Mayor Pro
Tem Herrera, Mayor Zirbes.
JANUARY 20, 2004 PAGE 2 CITY COUNCIL
Also present: Linda Lowry, City Manager; Mike Jenkins, City Attorney,
Jim De Stefano, Deputy City Manager; David Doyle, Deputy City Manager; David Liu,
PublicWorks Director; Bob Rose, Community Services Director; Linda Magnuson,Finance
Director and Lynda Burgess, City Clerk.
APPROVAL OF AGENDA: CM/Lowry requested that Item 6.8(a) be removed from
the agenda which is a request to approve a purchase orderin the amount of $37,000 for
armchairs for the community center. She said that after preparation of the agenda, staff
obtained another bid allowing the City to purchase the chairs underthe City Manager' s
purchasing authority of $25,000.
SPECIAL PRESENTATIONS, CERTIFICATES, PROCLAMATIONS:
BUSINESS OF THE MONTH:
1.1 Presented a City Tile to Dennis Tarango, President, D & J Municipal
Services, as Business of the Month, January 2004 and displayed Business
of the Month video.
2. CITY MANAGER REPORTS AND RECOMMENDATIONS: CM/Lowry introduced
Mr. Greg Kovacevich, associate to City Attorney Mike Jenkins andwelcomedhimto
D.B.
3. PUBLIC COMMENTS: Jeanette Betts, Preside ntel ectof the D.B. Rotary
Club, reported on an upcoming fundraiser which would potentially provide the Club
the means to be involved in more community projects. She introducedclub member
Bill Longacre to provide the event details.
Bill Longacre stated that the organization that the Rotary Club will be working with
is called VARA, Vintage Auto Racing Assn. and that a race is scheduled to be held
February 14-15 in the Ontario Motor Speedway. Rotary has been given the
opportunity to sell tickets to the eventwith the entire proceedsof the ticket sales to
be retained by Rotary and its partnerorganization,the Walnut/Diamond BarYMCA.
He described this as a world class event involving vehicles from Formula 5000 to
Formula Atlantic, Formula V, SuperV and mini-coopersfrom the Vintage years.The
vehicles are required to be over 20 years of age. He explained that tickets are
being sold for $10 for the two-day event and are available at PFF Bank, the
Walnut/Diamond Bar YMCA and from members of Rotary.
Marie Bucklandthanked Wen and Mei Lien Chang for their work with the Chinese
American organizations and the amount of time spentsupporting our troops. She
said that, through their efforts, local residents are more aware that there are a
number of Chinese -Americans serving in ourarmed forces. She asked the City to
take similar steps in supporting the troops as other cities have taken.
JANUARY 20. 2004 PAGE 3 CITY COUNCIL
4. RESPONSE TO PUBLIC COMMENTS: None Offered.
5. SCHEDULE OF FUTURE EVENTS: AS LISTED ON THE PREPARED AGENDA.
6. CONSENT CALENDAR: Moved by MPT/Herrera,secondedby C/Changto
approve the Consent Calendar excluding Item 6.8. Motion carried by the following
Roll Call vote:
AYES: COUNCIL MEMBERS - Chang, Huff, O' Connor MPT/Herrera,
M/Zirbes
NOES: COUNCIL MEMBERS -
ABSENT: COUNCIL MEMBERS - None
6.1 CITY COUNCIL MINUTES —Regular Meeting of January 6, 2004 —
Approved as submitted.
6.2 TRAFFIC &TRANSPORTATION COMMISSION MINUTES —Regular
Meeting of November 13, 2003— Received and filed.
6.3 APPROVED WARRANT REGISTER —dated January 8, 2004 and January
15, 2004 in an amount totaling $1,284,915.69.
6.4 APPROVED APPROPRIATION FROM LLAD39 RESERVES TO PAY FOR
EMERGENCY WORK PERFORMED ON V -DITCH ABOVE PANTERA
DRIV E BY MCE CORPORATION IN THE AMOUNT OF $9,000.
6.5 ADOPTED RESOLUTION NO. 2004-03 APPROVING INSTALLATION OF
STOP SIGNS AND A CROSSWALK ON MONTEFINO AVENUE AT PASEO
DE TERRADO.
6.6 APPROVED AGREEMENT WITH NAKOMA GROUP FOR MANAGEMENT
AND CONSULTING SERVICES FOR THE CITY' S INFORMATION
SYSTEMS DEPARTMENT IN AN AMOUNT NOT TO EXCEED $45,000.
6.7 (a) APPROVED APPROPRIATION OF $300,000 FROM
UNAPROPRIATED PROPOSITION C FUND BALANCE, APPROVED
PLANS AND SPECIFICATIONS AND AWARD CONTRACT FOR
TRAFFIC SIGNAL INSTALLATION AT GO LDEN SPRINGS
DRIVE/ADEL AVENUE AND GOLDEN SPRINGS DRIVE/HIGH KNOB
ROAD TO NEW WEST SIGNAL IN THE AMOUNT OF $254,130AND
AUTHORIZED A CONTINGENCY OF $45,865 FOR CONTRACT
CHANGE ORDERS TO BE APPROVED BY THE CITY MANAGER.
(b) APPROVED APPROPRIATION OF $32,000 FROM
UNAPROPRIATED PROPOSITION C FUND BALANCE, APPROVED
A CONTRACT AMENDMENT WITH WARREN C. SIECKE FOR
JANUARY 20. 2004 PAGE 4 CITY COUNCIL
INSPECTION AND CONSTRUCTION MANAGEMENT SERVICES
FOR THE GOLDEN SPRINGS DR. AT ADEL AVE. AND AT HIGH
KNOB RD. TRAFFIC SIGNALS PROJECT IN THE AMOUNT OF
$26,600 AND AUTHORIZED A CONTINGENCY AMOUNT OF $5,400
FOR CHANGE ORDERS TO BE APPROVED BY THE CITY
MANAGER.
6.8 PURCHASE OF FURNISHINGS FOR THE DIAMOND BAR CENTER:
(a) ARM CHAIRS AND DOLLIES FROM KRUEGER
INTERNATIONAL FOR THE SENIOR ROOM IN AN AMOUNT
NOT TO EXCEED $37,754.46. — REMOVED FROM THE
AGENDA.
(b) APPROVED PURCHASE OF BANQUET CHAIRS AND
DOLLIES FROM BERTOLINI, INC. IN AN AMOUNT NOT TO
EXCEED $28,946.12.
6.9 ASSESSMENT DISTRICTS:
(a) ADOPTED RESOLUTION NO. 2004-04 ORDERING THE
CITY ENGINE ER TO PREPARE AND FILE A REPORT
RELATED TO MAINTENANCE OF PUBLIC IMPROVEMENTS
IN ASSESSMENT DISTRICT NO. 38 AND ANY
ASSESSMENT THERON FOR FY 04-05.
(b) ADOPTED RESOLUTION NO. 2004-05 ORDERING THE
CITY ENGINEER TO PREPARE AND FILE A REPORT
RELATED TO MAINTENANCE OF PUBLIC IMPROVEMENTS
IN ASSESSMENT DISTRICT NO. 39 AND ANY
ASSESSMENT THEREON FOR FY 04-05.
(c) ADOPTED RESOLUTION NO. 2004-06 ORDERING THE
CITY ENGINEER TO PREPARE AND FILE A REPORT
RELATED TO MAINTENANCE OF PUBLIC IMPROVEMENTS
IN ASSESSMENT DISTRICT NO. 41 AND ANY
ASSESSMENT THEREON FOR FY 04-05.
6.10 APPROVED AN AGREEMENT WITH BUSINESS
TELECOMMUNICATION SYSTEMS, INC. FOR ANEW CITYWIDE
PHONE AND VOICE MAIL SYSTEM AND CONSULTING SERVICES
IN AN AMOUNT NOT TO EXCEED $68,000.
7. PUBLIC HEARINGS: None
JANUARY 20, 2004 PAGE 5 CITY COUNCIL
8. COUNCIL CONSIDERATION: None
148,�9161111,1[oil 01=1 =E:3 107:4&K9011111,1[oilMLTAI4LM 3=IZZKOV1VAI=1ilk&5
C/Chang reported that the Lunar New Year would begin on February 215` and
wished everyone in the Asian community a peaceful and prosperous New Year in
the year of the monkey. He thanked Mrs. Buckland for her kind comments
regarding supportofthe troops and stated that he andothers created a coalitionto
raise funds to provide the troops personal care or other convenience productsfor
the soldiers on the front lines. He said that products like Wet Ones, gloves,
chopsticks, hand lotion, and chap stick are packed in zip lock bags and shipped
overseas— mostly to Iraq. He explained that $25 to $35 needs to be raised in
additionalfunds for postage costs. He thanked each community member who has
helped with this project and wished all the best to the parents with soldiers on the
front line.
C/O' Connorannouncedthat letters were recently sentto a117 1h, 91h and 11`h graders
residing in D.B. asking them to participate in a survey relating to the Youth Master
Plan to be conducted at their schools. The survey is intended to give the Youth
Master Plan Committee the pointof view from the youth as to what needsthe City
should fulfill for them. She encouraged everyone to participate and have the forms
signed by their parents for return to the City. She announced that several
vacancies will exist on the Diamond Bar Community Foundation in February and
encouraged all interested individuals to volunteer and get involved with the
community. She explained that the biggest project that the Foundation has worked
on is the sale of commemorative tiles to be placed at the new D.B. Center. She
further announced that potential vacancies will also exist on the Planning
Commission, Traffic & Transportation Commission and Parks and Recreation
Commission. C/O' Connoralso announcedthat a newmonumentto WWII veterans
will open in Washington D.C. in May. She said that while all of the tickets have
been sold already, there will be aWWll registry on-linewhere personscan register
and describe how he or she participated in the war. She recommended that
individuals interested in visiting the memorial contact Congressman Miller' suffice
foranarranged tour of the monument or otherfacilities. She extendedhappyLunar
New Year wishes to all who celebrate the event.
C/Huff reported that three Council Memberswentto Sacramentothe previousweek
on a legislative tour. The Council Members also made contact with some of the
staff and board members that review the grant application process for the City' s
library bond grant application. He announced that DCM/Doyle delivered the
application to the bond board last Thursday. At that time; only14 otherapplications
had been delivered. He stated that Mr. Doyle discovered that by the time the filing
deadlinepassed,72 applicationshad been submitted. He describedthe process as
beingvery competitive and the staff and board members visited seemed impressed
that D.B. City Officials took the time to go to Sacramento and learn more aboutthe
JANUARY 20, 2004 PAGE 6 CITY COUNCIL
process. He stated that only aboutone in five applicants receive grant money. He
also wished everyone celebrating the Lunar New Year a happy one.
MPT/Herrera also commented aboutthe visit to Sacramento and the meeting with
the staff and board members reviewing the grant applications. She also stated that
they seemed very impressed that City Officials were committed to the grant
application and visited Sacramento to talk with them and learn more aboutthe
process. She thanked DCM/Doyle and other staff for their hard work on putting
together the huge grant application. She pointed out that the 72 applicantswould
be
competing for $90 million in grants and that the first review stage will take
approximately two months before the applicationscan proceed to the nextreview
stage where the scoring will take place. She said that after the applications are
scored, they are then sent to the bond board. So it could be a six -seven month
process before we find out how our application did. She also wished everyone a
happy Lunar New Year.
M/Zirbes reported that the Sports Complex Task Force continues to meet and is
moving rapidly ahead. He stated that he had attended his first Community
Foundation meeting in Mrs. O' Connor' glace. He also encouraged all interested
individuals to get involved in D.B. and consider becoming an appointee to a
commission or committee. He wished everyone who celebrates Lunar NewYear a
happy new year and encouraged interested persons to attend a Lunar New Year
event on Saturday, January 31 at D.B.H.S. He closed his comments with the sad
news that young acquaintance of his and Planning Commissioner Dan Nolan had
recently been diagnosed with lymphoma. He reported that the young man had
been involved in many different projects in the City and was always very positive
and a great inspiration to others. He stated that he would be adjourning the
meeting in support of 22 year old D.B. resident Brad Kominek.
RECESS: M/Zirbes recessed the regular meeting at 7:15 p.m. to continue the Study
Session.
RECONVENE: M/Zirbes reconvened the regularmeeting from the Study Session at
8:10 p.m.
10. ADJOURNMENT: There being no fu rtherbusinessto conduct,M/Zirbes recessed
the meeting at 7:15 p.m. in support of Brad Kominek, 22 year old Diamond Bar
resident.
LYNDA BURGESS, CITY CLERK
JANUARY 20, 2004 PAGE 7 CITY COUNCIL
The foregoing minutes are hereby approved this 3rd day of February , 2004.
BOB ZIRBES, MAYOR
AGENDA NO. 6.2
MINUTES OF THE CITY OF DIAMOND BAR
REGULAR MEETING OF THE PLANNING COMMISSION
DECEMBER 23, 2003
CALL TO ORDER:
Chairman Tye called the meeting to order at 7:00 p.m. in the South Coast Air Quality
Management/Government Center Auditorium, 21865 East Copley Drive, Diamond Bar,
California 91765.
PLEDGE OF ALLEGIANCE:
Commissioner Nelson led the Pledge of Allegiance.
1. ROLL CALL:
Present: Chairman Steve Tye, Vice Chairman Dan Nolan, and
Commissioners Steve Nelson, Jack Tanaka and Osman Wei.
Also present: Linda Smith, Development Services Assistant and Stella
Marquez, Administrative Assistant.
2. MATTERS FROM THE AUDIENCE/PUBLIC COMMENTS: None Offered.
3. APPROVAL OF AGENDA: As presented.
!�KelZ1- 4Z119101_1INgZ117-11Z;
4.1 Approval of December 9, 2003,Regular Meeting minutes.
C/Tanaka moved, C/Nelson seconded, to approve the December 9, 2003,
Regular Meeting minutes as presented. Motion carried by the following Roll
Call vote:
AYES: COMMISSIONERS: Tanaka, Nelson, Wei, Chair/Tye
NOES: COMMISSIONE RS: None
ABSTAIN: COMMISSIONERS: VC/Nolan
ABSENT: COMMISSIONERS: None
5. OLD BUSINESS: None
6. NEW BUSINESS: None
7. CONTINUED PUBLIC HEARINGS:
7.1 Development Review No. 2003-25 (pursuant to Code Section 22.48) is a
request to remodel and construct an approximate 1,020 square foot second
story additionto an existing 1,995 squarefoot one story single-family residence
with a two -car garage. (Continued from December 9, 2003)
PROJECT ADDRESS: 826 Great Bend Drive
Diamond bar, CA 91765
PROPERTY OWNER: Michael and Christine Whatley
826 Great Bend Drive
Diamond Bar, CA 91765
APPLICANT: ProBuilder, Kenn Coble
449 W. Allen Avenue #109
San Dimas, CA 91773
DSA/Smith presented staff sreport. Staff recommends Planning Commission
approval of Development Review No. 2003-25, Findingsof Fact, and conditions
of approval as listed within the draft resolution.
Chair/Tye opened the public hearing.
There being no onepresentwhowishedto speakon thisitem, Chair/Tye closed
the public hearing.
C/Nolan asked that the record reflect his review of the materials presented on
December 9, 2003, and his visit to the site and reading of staff sseport. He lives
in the same neighborhoodas the applicantand has been watching the project
develop anticipating its consideration bythe Planning Commission. He
applauded the applicant for working with his neighbors to improve the
neighborhood.
C/Tanaka said he alsovisited the site and attempted to anticipate any impactto
the neighbor. With the architect' sdesign the impact appearsto be mitigated
with respect to obstruction of view.
C/Wei visited the site and stated that although there was a small blockage to
the neighbor' sDffice window, it should not dramatically affect his view.
Chair/Tye visitedthe Whatley' shome and appreciatedtheirindulgence.He felt
that this was a good project and felt it was impressive that the applicant had
worked with his neighborsto gain their consensus.
C/Nelson moved, C/Wei seconded, approve DevelopmentReviewNo. 2003.25,
Findings of Fact, and conditions of approval as outlined in the resolution.
Motion carried by the following Roll Call vote:
AYES: COMMISSIONERS: Nelson, Wei, Tanaka, VC/Nolan
Ch a i r/Tye
NOES: COMMISSIONERS: None
ABSENT: COMMISSIONERS: None
8. PLANNING COMMISSION COMMENTS/INFORMATIONAL ITEMS: C/Tanaka
wished everyone Happy Holidays. It has been a wonderfulyear working with his peers
and with staff and their excellent reports.
Chair/Tye said he appreciated that with staff s information the Planning
Commissioners jobs were certainly made easy.
9. STAFF COMMENTS/INFORMA TIONAL ITEMS: DSA/Smith pointedout
that the Planning Commission has a very heavy meeting scheduled for January 13,
2004. Additionally, there is a continued public hearingfor Gunsmoke and others. The
report indicates only three public hearings. However, more are scheduled.
10. SCHEDULE OF FUTURE EVENTS:
As listed in the Agenda.
ADJOURNMENT: There being no further business to come before the Planning
Commission, Chairman Tye adjourned the meeting at 7:15 p.m.
Respectfully Submitted,
James De Stefano, Deputy City Manager
Attest:
Chairman Steve Tye
AGENDA NO. 6.3
CITY OF DIAMOND BAR
MINUTES OF THE PARKS & RECREATION COMMISSION
HEARING BOARD ROOM OF S.C.A.Q.M.D./ THE GOVERNMENT CENTER
21865 E. Copley Drive
NOVEMBER 20, 2003
CALL TO ORDER:
Chairman Hull called the meeting to order at 7:04 p.m. in the SCAQMD/Government
Center Building Hearing Board Room, 21865 E. Copley Drive, Diamond Bar, California
91765.
PLEDGE OF ALLEGIANCE:
Commissioner Lyons led the Pledge of Allegiance.
ROLL CALL:
Present: Chairman Hull, Vice Chairman Grundy and Commissioners
Lui, Lyons and Torres.
Staff: Bob Rose, Director of Community Services; Teresa Arevalo,
Senior Management Analyst; Ryan Wright, Recreation
Supervisor, and Marisa Somenzi, Administrative Assistant.
MATTERS FROM THE AUDIENCE: None Offered.
CALENDAR OF EVENTS: As presented.
ill�d6],1I� r!Itef_1q:I.117_1:3
1.1 Regular Meeting Minutes for October 23, 2003.
C/Torres moved, VC/Grundy seconded, to approve the minutes of October
23, 2003 regular meeting as presented. Without objection, the motion was
so ordered with C/Lyons and C/Lui abstaining.
2. INFORMATIONAL ITEMS
2.1 Youth Master Plan update —CSD/Rose
CSD/Rose respondedto C/Lyons that he was surprised about the requests
for better nutrition including places of business that served affordable and
nutritional meals for youth and the need for security at the Country Hills
NOVEMBER 20, 2003 PAGE 2 P&R COMMISSION
Towne Center theatre. In addition, the kids wanted comfortable and secure
placesto go (alcohol and drug free) with sufficient supervisionto feel safe.
There was also discussion about economic development and having the
types of business that the Chino Spectrum has as a place for kids to enjoy.
Chair/Hull apologizedfor notbeing ableto attend the meetings. He plansto
serve in the future.
2.2 Recreation Program Report — RS/Wright
a. Haunted House and Fall Fun Festival Financial Summary
Chair/Hull said he worked the Diamond Bar Community Foundation
booth on Thursday and Friday. There are a tremendous number of
peoplewho would like to have a Trader Joe' sin this community. He was
very impressed with the Haunted House and thanked RS/Wright and his
crew for their efforts.
2.3 Diamond Bar Community Foundation Oral Report — Chair/Hull
Chair/Hull reiterated hisfrustration with the Foundation and attempts to get
things accomplished.
2.4 C.I.P. Program Report — CSD/Rose
Diamond Bar Center — Completion slated for February 7 with Grand
Opening on March 20, 2004.
Chair/Hull asked to schedule a facilities tourfor Commission during
the February 2004 regular meeting.
b. Trail Development at Sycamore Canyon Park
C. Summitridge Park
d. Starshine Park Improvements
e. Sycamore Canyon Park Improvements — Phase II
2.5 Sports Complex Task Force update —CSD/Rose
2.6 PanteraParkTennisCourtLights— NeighborhoodMeeting—Wednesday,
December 3 at6:30 p.m., Pantera Elementary School Multi -Purpose Room,
801 Pantera Drive — CSD/Rose.
3. OLD BUSINESS:
3.1 Holiday Schedule for December Commission Meeting.
Due to an anticipated lack of quorumfor a rescheduled December meeting
date, the December Parks and Recreation Commission meeting was
canceled.
NOVEMBER 20, 2003 PAGE 3 P&R COMMISSION
4. NEW BUSINESS — None
5. ANNOUNCEMENTS — C/Lui asked if the Sycamore Canyon Park Trail could be
improved by cutting back the shrubbery.
C/Lyons said she appreciated the reduction in the size of the Commission packet. She
attended the Veterans ceremony on Tuesday,an excellentpresentation. C/Lyons asked if
the teacherat Heritage Park was givenfundsto replace worn books. On herown initiative
she conducteda November14 SycamoreCanyon Park walkthrough.She was pleasedwith
the condition of the bathrooms except that there were no papertowels. She is still very
distressed aboutthe poor condition of the portable building.
C/Torres reported that there was a lot of momentum building for the Sports Center Task
Force. The organization for the meetings is solid and there has been a tremendous
amount of progress. It is exciting for the City and he is pleased to be a small part of the
effort.
VC/Grundy said that lastnighthis wife attended the Diamond Ranch High School Panther
Pride Association. Jamie Sandoval was very excited and enthusiastic about the sports
complex idea, particularly if there is an opportunity for cooperation between the high
school and the City. He asked how many of the Commissioners intended to attend the
holiday party.
Chair/Hull said that he alsodid a park walkthrough on hisown at Ronald ReaganPark.On
Saturday morning at 8:30 a.m. there were no doggiebags. The bathrooms did notappear
to have been cleaned. It looked as if someone had driven outonto the field. He suggested
some kind of mitigation to prevent people from driving onto the field.
ADJOURNMENT: Upon motion by C/Lyons, seconded by C/Lui and there being no
further businessto come before the Parks and Recreation Commission, Chairman Hull
adjourned the meeting at 7:50 p.m.
Respectfully Submitted,
Bob Rose Secretary
Atte st:
NOVEMBER 20, 2003 PAGE 4 P&R COMMISSION
Chairman Jeff Hull
AGENDA #6.4
NOTICE REGARDING THE WARRANT REGISTER
Please note that the Warrant Register has not been included
in the electronic versions of the City Council Agenda
Packets on the City's Web Site because severe formatting
errors occur when attempting to convert this material. If you
are interested in receiving a copy of the Warrant Register,
please contact the City Clerk's office at 909 -839-7000 to
receive a FAXed copy or to pick one up in person.
We apologize for the inconvenience.
CITY COUNCIL
TO: Honorable Mayor and Members of the City Council
VIA: Linda C. Lowry, City Manager
TITLE: Treasurer's Statement — December 31, 2003
RECOMMENDATION:
Approve the December 2003, Treasurer's Statement.
FINANCIAL IMPACT:
No Fiscal Impact
GUM—.1i1W"M
Agenda # 6.5
Meeting Date: Feb. 03, 2004
AGENDA REPORT
Per City policy, the Finance Department presents the monthly Treasurer's Statement for t
Council's review and approval. This statement shows the cash balances for the various funds
breakdown of bank account balances, investment account balances and the effective yield
from investments.
PREPARED BY:
Susan Full, Accountant II
Depart n Head
Attachments:
Treasurer's Statement
he City
with a
earned
CITY OF DIAMOND BAR
TREASURER'S MONTHLY CASH STATEMENT
December 31, 2003
BEGINNING TfiL4NSFBF2.S.. ENtJING
BALANCE:: RECEIPTS DISBURSEMENTS INtOUT) :BALANCE
GENERAL FUND
$21,847,594.26
$1,580,153.40
$1,006,210.27
$22,421,537.39
LIBRARY SERVICES FUND
80,476.23
PAYROLL ACCOUNT
109,643.77
80,476.23
COMMUNITY ORG SUPPORT FD
(4,254.00)
200.00
(4,454.00)
GAS TAX FUND
618,092.40
166,683.06
INVESTMENTS:
784,775.46
TRANSIT TX (PROP A) FD
1,587,222.99
37,655.31
123,644.50
1,501,233.80
TRANSIT TX (PROP C) FD
1,483,111.58
59,749.54
US TREASURY Money Market Account
1,542,861.12
ISTEA Fund
0.00
3,156,927.36
0.00
INTEGRATED WASTE MGT FD
568,229.65
2,588.00
18,732.07
552,085.58
AB2928-TR CONGESTION RELIEF FD
40,136.73
40,136.73
AIR QUALITY IMPRVMNT FD
153,462.36
17,102.41
11,639.01
158,925.76
PARK & FACILITIES DEVEL. FD
2,467,388.04
2,467,388.04
COM DEV BLOCK GRANT FD
(69,214.22)
43,172.00
36,125.80
(447.00) (62,615.02)
CITIZENS OPT -PUBLIC SAFETY FD
308,555.50
4,192.33
304,363.17
NARCOTICS ASSET SEIZURE FD
309,788.82
309,788.82
CA LAW ENFORCEMENT EQUIP PRG
84,956.82
84,956.82
LANDSCAPE DIST #38 FD
391,551.50
102,313.50
15,884.60
477,980.40
LANDSCAPE DIST #39 FD
207,047.30
64,988.77
10,801.75
261,234.32
LANDSCAPE DIST #41 FD
359,474.31
48,691.55
6,049.26
402,116.60
GRAND AV CONST FUND
111,579.53
111,579.53
CAP IMPROVEMENT PRJ FD
(2,951,015.26)
1,660,166.25
1,395,158.53
447.00 (2,685,560.54)
SELF INSURANCE FUND
1,239,782.76
1,239,782.76
EQUIPMENT REPLACEMENT FUND
192,188.81
192,188.81
COMPUTER REPLACEMENT FUND
765.29
765.29
PUBLIC FINANCING AUTHORITY FUN
5,405,317.08
424.67
1,670 574.43
3,735 167.32
TOTALS
$34,432,233.48
$3,783,688.46
$4,299,212.55
$0.00 $33,916,714.39
SUMMARY OF CASH:
DEMAND DEPOSITS:
GENERAL ACCOUNT
($28,173.50)
PAYROLL ACCOUNT
109,643.77
CHANGE FUND
250.00
PETTY CASH ACCOUNT
500.00
TOTAL DEMAND DEPOSITS
$82,220.27
INVESTMENTS:
US TREASURY Money Market Acct.
$472,650.31
LOCAL AGENCY INVESTMENT FD
29,626,676.49
30,099,326.80
CASH WITH FISCAL AGENT:
US TREASURY Money Market Account
$578,239.96
LOCAL AGENCY INVESTMENT FD
3,156,927.36
(Bond Proceeds Account)
3,735,167.32
TOTAL CASH $33,916,714.39
Note: The City of Diamond Bar is invested in the State Treasurer's Local Agency Investment Fund. There are two LAIF accounts set up. The
regular account's funds are available for withdrawal within 24 hours. The LAIF Bond Proceeds account's withdrawals require 30 days notice.
As a secondary investment option, the City maintains the US Treasury Sweep Accounts with Wells Fargo and the City's Fiscal Agent, Union
Bank of California. Any excess funds are "swept" on a daily basis from the City's bank accounts and are invested overnight in a pool of US
Treasury Notes. Interest is credited to the City's bank accounts on a monthly basis.
L.A.I.F - Effective Yield - Dec 2003
Wells Fargo Money Mkt -Effective Yield - Dec 2003
Union Bank Money Mkt - Effective Yield - Dec 2003
1.545%
0.378%
0.790%
All investments are placed in accordance with the City of Diamond Bar's Investment Policy.
The above summary provides sufficient cash flow liquidity to meet the next six month's
estimated expenditures.
Linda C. Lowry, Treasurer
Agenda # — 66
Meeting Date: _2/3/04
CITY COUNCIL
TO: Honorable Mayor and Members of the City Council
VIA: Linda C. Lowry, City Manager
AGENDA REPORT
TITLE: APPROVAL OF JOINT USE AGREEMENT WITH DIAMOND BAR LITTLE LEAGUE
FOR CITY USE OF LITT LE LEAGUE COMPLEX AND APPROPRIATION OF $20,200
FROM GENERAL FUND RESERVES TO FUND PAYMENT.
RECOMMENDATION: Approve agreement and appropriation.
FINANCIAL IMPACT: Approval of this agreementwill require funding of $20,200 from
General Fund Reserves.
BACKGROUND: The City of Diamond Bar has a limited numberof athletic facilitiesto support
sports activities for the community. The Parks Master Plan (Pg. 60) recommends that the City should
enter into joint use agreerrentswith owners of athletic facilities in Diamond Bar to obtain the space
needed to conductathletic programs.
DISCUSSION: Diamond Bar Little Leagueowns 8 acres of land at the west terminus of Sunset
Crossing that is developedwith four (4) baseball fields and support facilities. The City' suse of the
Little Leaguefacility will make it possible to expand the amount of sports programming in the
community without impacting the availability of public facilities needed by other Diamond Bar -based
non-profit youth serving sports organizations.
Bob Rose
Director of Community Services
Attachments: Agreement
James DeStefano
Deputy City Manager
Agenda # 6.7
Meeting Date: February 03, 2004
CITY COUNCIL
TO: Honorable Mayor and Members of the City Council
VIA: Linda C. Lowry, City Manager
AGENDA REPORT
TITLE: Increase in contract amount for City Prosecutor services provided by Dapeer,
Rosenblit & Litvak, LLP.
RECOMMENDATION :
Approve the contract amendment.
FINANCIAL IMPACT:
The requested contract amendment is consistent with the adopted FY 2003-2004 Budget (001-5230-
45213).
BACKGROUND:
On December 8, 2002, the City entered into a Professional Services Agreement with Dapeer,
Rosenblit& Litvak, LLP in the amount of$15,000.00to provide services as City Prosecutor. Attorney
Steve Rosenblit provides legal assistance to the City on an "as -needed" basis for assigned code
enforcement cases. On June 18,2003,the contractwas supplemented with an allocationof$10,000.
Ongoing assignments and anticipated caseworkwill require an additional allocation of resources for
the balance of this fiscal year. Authorization from the City Council is required in order to continue the
services provided by the consultant.
It is recommended that the "asneeded"contract compensation be increased by $13,000.00 to permit
the continued use of the firm. If authorized, the amendment to the contract will reflect a total contract
compensation amount of $ 38,000.00. The City Council Neighborhood Improvement Subcommittee
recommends approval of the amendment.
PREPARED BY:
James DeStefano
Deputy City Manager
Attachment: Supplemental Agreement No. 2
Agenda # 6.8A
Meeting Date: Feb. 3, 04
CITY COUNCIL O i1 AGENDA REPORT
TO: Honorable Mayor and Members of the City Council
VIA: Linda C. Lowry, City Manager
TITLE: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DIAMOND BAR
SUPPORTING PROPOSITION 57: THE ECONOMIC RECOVERY BOND ACT -A
STATEWIDE INITIATIVE TO HELP RETIRE THE STATE DEBT.
RECOMMENDATIONS:
It is recommended that the City Council adoptthe Resolution.
FISCAL IMPACT:
The impact of the bond measure on the City of Diamond Bar is undeterminabl a at this time.
However, California cities would most certainly face increased reduction in State subventions if the
State is unable to balance its budget A detailed summary of the fiscal impact on the State is
attached in the Legislative Analyst Office (LAO) report (see Fiscal Impact).
BACKGROUND / DISCUSSION:
California's Recent Budget Problems California' s General Fund budget supports a variety of
programs, including public schools, higher education, health, social services, and prisons. The
General Fund has experienced chronic revenue shortfalls since 2001-02, when the economic and
stock market downturns caused State revenues to decline sharply. To deal with these shortfalls,
policymakers have reduced program expenditures, raised revenues, and taken a variety of other
measures including redirecting revenues previously passed to local government They have also
engaged in various forms of borrowing from special funds, local governments, and private credit
markets.
Projected Shortfall: The State is facing another large budget shortfall in 2004-05, which the LAO
estimates will be in the general range of $15 billion.
Proposal: This proposition puts before the voters authorization for the State to issue a bond of up to
$15 billion to deal with its budget deficit. The bond authorized by this measure would be used in place
of the deficit -financing bond of a lesseramount authorized last year by the Legislature.
Repayment of Proposed Bond: The repayment of the bond would result in annual State General
Fund costs equivalent to one-quartercent of California' s sales tax revenues, compared to costs
equivalentto one-half cent of sales tax revenues for the currently authorized bond. In addition, certain
funds transferred to the State' sBudget Stabilization Account (created in Proposition 58 on this ballot,
if approved) would be used to accelerate the repayment of the bond. The measure includes backup
guarantee that if the sales tax revenues dedicated to the bond are insufficient to pay bond principal
and interest in any year, the General Fund will make up the difference.
This measure would become effective only if Proposition 58 on this ballot is also approved by the
voters.
Prepared with information from the State Legislative Analyst' sOffice
Prepared by:
Jim Clarke, Legislative Analyst
RESOLUTION NO. 2004-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DIAMOND BAR
SUPPORTING PROPOSITION 57: THE ECONOMIC RECOVERY BOND ACT - A STATEWIDE
INITIATIVE TO HELP RETIRE THE STATE DEBT
WHEREAS, California' EGeneral Fund supports a variety of programs, including public schools,
higher education, health, social services, and prisons, and
WHEREAS, the State General Fund has experiencedchronic shortfalls between revenues and
expendituressince FY2001-02, and
WHEREAS, policymakers have reduced program expenditures, raised revenues, and taken a variety
of other measures including borrowing from local government, and
WHEREAS, the State is facing another large budgetshortfall in 2004-05 which is estimated to be in
the general range of $15 billion, and
WHEREAS, Proposition 57: The Economic Recovery Bond Act on the March 2004 ballot puts before
the voters authorization for the State to issue a bond of up to $15 billionto deal with its budgetdeficit,
and
WHEREAS, the bond authorized by this measure would be used in place of the deficit -financing bond
of lesseramount authorized last yearby the Legislature, and
WHEREAS, local governments includingthe City of Diamond Bar would certainly have to make more
severe budget cuts in Fiscal Year2004-05 if the initiative is not passed, and
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Diamond Bar SUPPORTS
Proposition 57: The Economic Recovery Bond Act on the March 2004 election ballotand directs the
following:
SECTION 1. That the City Council of the City of Diamond Bar shall adopt the Resolution and the City
Clerk shall certify to the adoption.
SECTION 2. That the City Council of the City of Diamond Bar asks all elected officials and Diamond
Bar voters to support Proposition 57.
Agenda # 6.8b
Meeting Date: Feb. 3, 04
CITY COUNCIL O i1 AGENDA REPORT
TO: Honorable Mayor and Members of the City Council
VIA: Linda C. Lowry, City Manager
TITLE: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DIAMOND BAR
SUPPORTING PROPOSITION 58: THE CALIFORNIA BALANCED BUDGET ACT
RECOMMENDATIONS:
Itis recommended that the City Council adoptthe Resolution.
I�l;Yi7_1�1TAI:L[4&l
The impact ofth a measure on the City of Diamond Bar is undeterminable at this time. However,
California cities would most certainly face increased reduction in State subventions if the State is
unable to balance its budget A detailed summary of the fiscal impact on the State is attached in the
Legislative Analyst Office report (see Fiscal Impact).
BACKGROUND / DISCUSSION:
California has experienced major budget difficulties in recent years. After a period of high growth in
revenues and expenditures in the late 1990s, state tax revenues plunged in 2001 and the budgetfell
badly out of balance. Although policymakers reduced program spending and increased revenues to
deal with part of the shortfalls, the State has also carried over large deficits and engaged in a
significant amount of borrowing from funds such as those for local government. The State budget
faces another major shortfall in 2004-05, and it has a variety of other obligations— such as deferrals
and loansfrom special funds—that are outstanding at this time.
There are four main portions to this initiative
Balanced Budget Requirement: The initiative will change the State constitution to require the budget
ultimately passed by the Legislature or signed by the Governorto be balanced.
Mid -Year BudgetAdjustments: Proposition 58 will create a formal process in the Constitution to
require that mid -year corrective actions betaken when the budgetfalls out of balance.
Reserve Requirement: Reserve funds are typically used to cushion against unexpected budget
shortfalls. The Constitution requires that the Legislature establish a prudent State Reserve Fund. It
does not, however, specify the size of the Reserve, or the conditions underwhich funds are placed
into the Reserve. Proposition 58 will do this. More information regardingthe Reserve requirement
can be found in the attached LAO report.
Debt Related Provisions: The Constitution generallyrequires voter approval for debt backed by the
State' sgeneral taxing authority. Over the years, courts have ruled that certain types of borrowing
(including short-term borrowing to cover cash shortfalls and some bonds repaid from specific revenue
sources) can occur without voter approval. The Constitution also requires that bondssubmitted to the
voters for approval be for a "singleobject or work" as specified in the respective bond act. For
example, in past years, voters have been asked to authorize bonds for such single objects as
education facilities, water projects, or prison construction. This portion of the initiative provides an
exemption with regard to the "singleobject or work" bond criteria and thus, accommodates the $15
billion bond proposal in Proposition 57: The Economic Recovery Bond Act.
Prepared with information from the State Legislative Analyst' sOffice.
Prepared by:
Jim Clarke, Legislative Analyst
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DIAMOND BAR
SUPPORTING PROPOSITION 58: THE CALIFORNIA BALANCED BUDGET ACT
WHEREAS, California' sGeneral Fund budgetsupports a variety of programs, including public
schools, highereducation, health, social services, and prisons, and
WHEREAS, the State General Fund has experiencedchronic shortfalls between revenues and
expendituressince 2001-02; and
WHEREAS, policymakers have reduced program expenditures, raised revenues, and taken a variety
of other measures including borrowing from local governments; and
WHEREAS, Proposition58: The California Balanced BudgetAct will amend the Constitution in order
to enact and maintain a balanced State budget and
WHEREAS, Proposition58 establishes specific State budgetreserve requirements; and
WHEREAS, Proposition58 will establish a restriction on future deficit -related borrowing; and
WHEREAS, Proposition58 provides an exemption to the "singleobject or work" bond criteria and
thus, accommodates the $15 billion bond proposal in Proposition 57: The Economic Recovery Bond
Act
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Diamond Bar SUPPORTS
Proposition 58: The California Balanced BudgetAct and directs the following:
SECTION 1. That the City Council of the City of Diamond Bar shall adopt the Resolution and the City
Clerk shall certify to the adoption
SECTION 2. That the City Council of the City of Diamond Bar asks all elected officials and Diamond
Barvoters to support Proposition 58.
AGREEMENT BETWEEN CITY OF DIAMOND BAR AND
THE DIAMOND BAR LITTLE LEAGUE FOR
RECREATIONAL USE OF BALLFIELDS
THIS AGREEMENT is made and entered into this 3rd day of February, 2004, by and
between CITY OF DIAMOND BAR, a municipal corporation of the State of California, herein
called "City," and the DIAMOND BAR LITTLE LEAGUE, a California non-profit corporation,
herein called "Little League" (collectively sometimes called the "Parties").
RECITALS:
A. Little League owns property located at the west terminus of Sunset Crossing Road
improved with four (4) baseball fields and used in connection with its youth baseball programs
(the "property").
B. City and Little League desire to provide by contract for the City's use of the property
by City for community recreation activities in exchange for a one-time payment by City to be
applied towards improvements to the Little League's facilities located on the property.
C. Maximizing use of the recreational facilities on the property advances the public
interest and benefits the youth of Diamond Bar.
NOW, THEREFORE, in consideration of the covenants and conditions hereinafter set
forth, it is agreed as follows:
I. Property
The property subject to this Agreement is the site owned by the Little League and located
at the west terminus of Sunset Crossing Road in the City of Diamond Bar, commonly
known as the Diamond Bar Little Complex, as described and shown in Exhibit "A",
attached hereto and incorporated herein by this reference. The property shall be available
to City for public recreation purposes consistent with this Agreement, in accordance with
the schedule attached hereto as Exhibit B, attached hereto and incorporated herein by this
reference, which schedule may be amended from time to time by agreement of the
Parties. The President of the Little League and the City Manager are authorized on behalf
of the parties to amend the schedule.
II. Rules and Regulations
City shall conduct its recreational activities in accordance with Little League's rules and
regulations regarding the conduct of persons using the property for baseball purposes.
City's activities shall be properly supervised by qualified personnel.
III. Consideration.
In consideration of City's use of the property for City sponsored baseball programs, City
shall pay to Little League within thirty days of execution of this Agreement a lump sum,
one-time payment of $20,200, which sum shall be used by Little League in its discretion
towards improvements to the property.
IV. Maintenance Responsibilities
Little League shall, at its own cost and expense, during the term of this Agreement,
maintain the property in good and proper condition as a baseball field, in a manner as to
ensure its appearance, longevity and safe condition for youth baseball. City shall have no
maintenance responsibilities for the property (other than clean-up following its activities),
nor shall City make any alterations to the property. City shall be responsible for the cost
of repairing any damage to the property caused by or attributable to its activities pursuant
to this Agreement.
V. Term of This Agreement
This Agreement shall be in effect for four (4) years from the date of the last signature
affixed hereto, until June 30, 2008.
VI. Mutual Indemnification
Each party agrees to indemnify, defend, and hold harmless the other party, its officers,
agents and employees from any and all liabilities, claims, or losses of any nature,
including reasonable attorneys' fees and costs of suit, to the extent caused by, arising out
of, or in connection with, the indemnifying party's negligent or wrongful acts or
omissions arising from its respective activities pursuant to this Agreement.
VII. Modification of Agreement
This Agreement may be amended only in writing signed by both City and Little League.
VIII. Notices
All notices permitted or required under this Agreement shall be in writing,
and shall be deemed made when delivered to the applicable party at the following
addresses either by first class mail postage prepaid, facsimile or personal delivery:
If to City:
City of Diamond Bar
21825 E. Copley Drive
Diamond Bar, CA 91765
Attention: Community Services Director
-2-
If to Little League:
Diamond Bar Little League
P.O. Box 4113
Diamond Bar, CA 91765
Attention: League President
IX. Agreement binding
Each party warrants that the individuals who have signed this Agreement
have the legal power, right and authority to make this Agreement and bind the party for
whom he or she is signing.
WHEREFORE, the Parties hereto have executed this Agreement on the _ day of
,20
CITY OF DIAMOND BAR
By:
MAYOR
DIAMOND BAR LITTLE LEAGUE
By:
PRESIDENT
ATTEST: APPROVED TO FORM:
By: By:
City Clerk City Attorney
-3-
Exhibit "B"
City of Diamond Bar Schedule of Use
2004-2008
Dates Purpose of Use Time
Saturday, January 17, 2004 Youth Baseball Clinic 7:00 A.M.— 1:00 P.M.
Date TBA, 2005 Youth Baseball Clinic Time TBA
Date TBA, 2006 Youth Baseball Clinic Time TBA
Date TBA, 2007 Youth Baseball Clinic Time TBA
Date TBA, 2008 Youth Baseball Clinic Time TBA
-5-
ol 10,01 PONG R
"'YT
41
f
ty�
a�
GEdVI
WINDOWS
Agenda #
6.7
Meeting Date: February 03, 2004
CITY COUNCIL AGENDA REPORT
ljgq
TO: Honorable Mayor and Members of the City Council
Au�VIA: Linda C. Lowry, City Manager
TITLE: Increase in contract amount for City Prosecutor services provided by Dapeer,
Rosenblit & Litvak, LLP.
RECOMMENDATION:
Approve the contract amendment.
FINANCIAL IMPACT:
The requested contract amendment is consistent with the adopted FY 2003-2004 Budget (001-5230-
45213).
BACKGROUND:
On December 8, 2002, the City entered into a Professional Services Agreement with Dapeer,
Rosenblit & Litvak, LLP in the amount of $15,000.00 to provide services as City Prosecutor. Attorney
Steve Rosenblit provides legal assistance to the City on an "as -needed" basis for assigned code
enforcement cases. On June 18, 2003, the contract was supplemented with an allocation of $10,000.
Ongoing assignments and anticipated casework will require an additional allocation of resources for
the balance of this fiscal year. Authorization from the City Council is required in order to continue the
services provided by the consultant.
It is recommended that the "as -needed" contract compensation be increased by $13,000.00 to permit
the continued use of the firm. If authorized, the amendment to the contract will reflect a total contract
compensation amount of $38,000.00. The City Council Neighborhood Improvement Subcommittee
recommends approval of the amendment.
PREPARED BY:
James DeStefano
Deputy City Manager
Attachment: Supplemental Agreement No. 2
SUPPLEMENTAL AGREEMENT NO.2 TO THE CITY'S AGREEMENT FOR
LEGAL SERVICES IN CONJUNCTION WITH CODE ENFORCEMENT
This Supplemental Agreement No. 2 to the City's Agreement is made and entered into
this 3rd day of February, 2004, between the CITY OF DIAMOND BAR, a Municipal
Corporation (hereinafter referred to as "CITY") and Dapeer, Rosenblit & Litvak, LLP, a
California limited liability partnership (hereinafter referred to as the "FIRM".)
A. Recitals:
(i) The CITY has heretofore entered into an Agreement, dated December 8, 2002,
with the FIRM to provide legal services for code enforcement (hereinafter referred to as the
"AGREEMENT".)
(ii) The FIRM will provide additional legal services at a cost not to exceed
THIRTEEN THOUSAND DOLLARS ($13,000.00.)
(iii) It is in the City's best interest to extend the AGREEMENT rather than request
bids for the services in order to ensure consistency and continuity of the services already being
provided by the FIRM.
NOW THEREFORE, it is agreed by and between CITY and the FIRM:
Section 1: In accordance with Section 10 of the AGREEMENT, and as authorized by
the City Council, the CITY agrees to compensate the FIRM, and the FIRM agrees to accept in
full satisfaction for the services provided for hereunder, fees on a time and material basis at the
rates set forth in the original AGREEMENT, but in no event to exceed THIRTY EIGHT
THOUSAND DOLLARS ($38,000.00.)
Section 2: Each party to this Supplemental Agreement No. 2 acknowledges that no
representation by any party, which is not embodied herein, or any other agreement, statement, or
promise not contained in this Supplemental Agreement No. 2 shall be valid and binding. Any
modification of this Supplemental Agreement No. 2 shall be effective only if it is in writing
signed by the parties.
Section 3:
All other terms and conditions of the AGREEMENT shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Supplemental
Agreement No. 2 as of the day and year first set forth above:
APPROVED AS TO FORM:
WA
Dapeer, Rosenblit & Litvak, LLP:
City Attorney Steven H. Rosenblit, Esq.
ATTEST:
City of Diamond Bar
City Clerk Mayor, Robert P. Zirbes
Date:
2
CITY COUNCIL
Agenda # 6 . s (a)
Meeting Date: Feb. 3, 04
AGENDA REPORT
TO: Honorable Mayor and Members pf1he City Council
VIA: Linda C. Lowry, City 9",
TITLE: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SUPPORTING PROPOSITION 57: THE ECONOMIC RECOVERY
STATEWIDE INITIATIVE TO HELP RETIRE THE STATE DEBT.
RECOMMENDATIONS:
It is recommended that the City Council adopt the Resolution.
FISCAL IMPACT:
DIAMOND BAR
BOND ACT - A
The impact of the bond measure on the City of Diamond Bar is undeterminable at this time.
However, California cities would most certainly face increased reduction in State subventions if the
State is unable to balance its budget. A detailed summary of the fiscal impact on the State is
attached in the Legislative Analyst Office (LAO) report (see Fiscal Impact).
BACKGROUND / DISCUSSION:
California's Recent Budget Problems: California's General Fund budget supports a variety of
programs, including public schools, higher education, health, social services, and prisons. The
General Fund has experienced chronic revenue shortfalls since 2001-02, when the economic and
stock market downturns caused State revenues to decline sharply. To deal with these shortfalls,
policymakers have reduced program expenditures, raised revenues, and taken a variety of other
measures including redirecting revenues previously passed to local government. They have also
engaged in various forms of borrowing from special funds, local governments, and private credit
markets.
Projected Shortfall. The State is facing another large budget shortfall in 2004-05, which the LAO
estimates will be in the general range of $15 billion.
Proposal. This proposition puts before the voters authorization for the State to issue a bond of up to
$15 billion to deal with its budget deficit. The bond authorized by this measure would be used in place
of the deficit -financing bond of a lesser amount authorized last year by the Legislature.
Repayment of Proposed Bond. The repayment of the bond would result in annual State General
Fund costs equivalent to one-quarter cent of California's sales tax revenues, compared to costs
equivalent to one-half cent of sales tax revenues for the currently authorized bond. In addition, certain
funds transferred to the State's Budget Stabilization Account (created in Proposition 58 on this ballot,
if approved) would be used to accelerate the repayment of the bond. The measure includes a backup
guarantee that if the sales tax revenues dedicated to the bond are insufficient to pay bond principal
and interest in any year, the General Fund will make up the difference.
This measure would become effective only if Proposition 58 on this ballot is also approved by the
voters.
Prepared with information from the State Legislative Analyst's Office.
Prepared by:
JirVVarke, Legislative Analyst
RESOLUTION NO. 2004-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DIAMOND BAR
SUPPORTING PROPOSITION 57: THE ECONOMIC RECOVERY BOND ACT -
A STATEWIDE INITIATIVE TO HELP RETIRE THE STATE DEBT
WHEREAS, California's General Fund supports a variety of programs, including
public schools, higher education, health, social services, and prisons, and
WHEREAS, the State General Fund has experienced chronic shortfalls between
revenues and expenditures since FY2001-02, and
WHEREAS, policymakers have reduced program expenditures, raised revenues,
and taken a variety of other measures including borrowing from local
government, and
WHEREAS, the State is facing another large budget shortfall in 2004-05 which is
estimated to be in the general range of $15 billion, and
WHEREAS, Proposition 57: The Economic Recovery Bond Act on the March
2004 ballot puts before the voters authorization for the State to issue a bond of
up to $15 billion to deal with its budget deficit, and
WHEREAS, the bond authorized by this measure would be used in place of the
deficit -financing bond of a lesser amount authorized last year by the Legislature,
and
WHEREAS, local governments including the City of Diamond Bar would certainly
have to make more severe budget cuts in Fiscal Year 2004-05 if the initiative is
not passed, and
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of
Diamond Bar SUPPORTS Proposition 57: The Economic Recovery Bond Act on
the March 2004 election ballot and directs the following:
SECTION 1. That the City Council of the City of Diamond Bar shall adopt the
Resolution and the City Clerk shall certify to the adoption.
SECTION 2. That the City Council of the City of Diamond Bar asks all elected
officials and Diamond Bar voters to support Proposition 57.
PASSED, APPROVED AND ADOPTED this 3rd of February 2004.
Bob Zirbes, Mayor
I, LYNDA BURGESS, City Clerk of the City of Diamond Bar, California do hereby
certify that the foregoing Resolution passed, approved and adopted at a regular
meeting held on the 3rd day of February-, 2004, by the following vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ABSTAINED: COUNCIL MEMBERS:
LYNDA BURGESS, CITY CLERK
CITY OF DIAMOND BAR
Proposition 57: The Economic Recovery Bond Act
LAO,
ad YEARS OF SERVICE'
December, 2003
Background
legislative
analyst's
office
Proposition 57
The Economic Recovery Bond Act
Page 1 of 3
California's Recent Budget Problems. California's General Fund budget supports a variety
of programs, including public schools, higher education, health, social services, and prisons.
The General Fund has experienced chronic shortfalls between revenues and expenditures
since 2001-02, when the economic and stock market downturns caused state revenues to
decline sharply. To deal with these shortfalls, policymakers have reduced program
expenditures, raised revenues, and taken a variety of other measures. They have also
engaged in various forms of borrowing from special funds, local governments, and private
credit markets.
Deficit -Financing Bond. One of the key actions taken to deal with the projected current -year
(2003-04) budget shortfall was the authorization of a $10.7 billion deficit -financing bond. The
purpose of this bond was to "wipe the slate clean" and eliminate the cumulative budget deficit
that would have existed at the end of 2002-03. This would allow the state to avoid the more
severe budget actions that would have been necessary to eliminate the deficit all at once. The
repayment of the currently authorized bond would be based on a multiple -step financing
process (see shaded box for details). It would result in annual General Fund costs equivalent
to one-half cent of the California's sales tax—or about $2.4 billion in 2004-05 and increasing
moderately each year thereafter—until the bond is paid off (in about five years).
Repayment of Deficit Bonds
Existing $10.7 Billion Bond. The previously authorized deficit -financing bond
was designed to be repaid through a multiple -step process that "freed up" a revenue
stream dedicated solely to repayment of the bond. This involved:
• The diversion of a one-half cent portion of the sales tax from local governments
to a special fund dedicated to the bond's repayment.
• A diversion of property taxes from school districts to local governments to offset
their sales tax loss.
• Added state General Fund payments to school districts to replace their diverted
property taxes.
As a result of these diversions, there is no net impact on local governments or
school districts. The full cost of the bond's repayment is borne by the state's
General Fund.
$15 Billion Proposition 57 Bond. Under this proposition, the bond repayment
http://www.lao.ca.gov/initiatives/2004/57_03_2004.htm 1/29/2004
Proposition 57: The Economic Recovery Bond Act
method described above would be the same, except that the amount of revenues
diverted would be equivalent to one-quarter cent of the state sales tax instead of the
one-half cent. The full cost of the bond would continue to be borne by the state's
General Fund.
Page 2 of 3
This deficit bond is currently being challenged in court and has not yet been issued. (In the
meantime, the carryover 2002-03 deficit is being financed through short-term borrowing, which
is due to be repaid in June 2004.)
Projected Shortfall in 2004-05. The state is facing another large budget shortfall in 2004-05,
which we estimate will be in the general range of $15 billion. This estimate assumes that the
currently authorized $10.7 billion deficit -financing bond is sold and that the carryover 2002-03
deficit is thereby taken off the books. Absent the bond proceeds from this sale, the budget
shortfall would be much larger.
Proposal
This proposition puts before the voters authorization for the state to issue a bond of up to
$15 billion to deal with its budget deficit. The bond authorized by this measure would be used
in place of the deficit -financing bond authorized last year by the Legislature.
Repayment of Proposed Bond. The repayment of the bond would result in annual General
Fund costs equivalent to one-quarter cent of California's sales tax revenues, compared to
costs equivalent to one-half cent of sales tax revenues for the currently authorized bond. In
addition, certain funds transferred to the state's Budget Stabilization Account (created in
Proposition 58 on this ballot, if approved) would be used to accelerate the repayment of the
bond. The measure includes a backup guarantee that if the sales tax revenues dedicated to
the bond are insufficient to pay bond principal and interest in any year, the General Fund will
make up the difference.
This measure would become effective only if Proposition 58 on this ballot is also approved by
the voters.
Fiscal Effects
The fiscal effects of the proposed bond are summarized in Figure 1, and compared to the
currently authorized deficit -financing bond. The proposed bond would result in near-term
budgetary savings compared to the bond authorized in current law, but added annual costs
over the longer term. Specifically:
http://www.lao.ca.gov/initiatives/2004/57_03_2004.htm 1/29/2004
Proposition 57: The Economic Recovery Bond Act
Figure 1
Comparison of Bond Authorized in Proposition 57
With Previouslv Authorized Bond
Page 3 of 3
Previously
Authorized
Deficit -Financing
Proposition 57 Bond Bond
Bond Amount $15 billion a $10.7 billion
Annual General Fund Costs:
• Annual costs related to sales tax diversion.
• Potential annual payments from Proposition 58 reserve.
Years to Pay Off Bond:
• Using only sales tax revenues.
• Assuming maximum $5 billion contribution from Proposition 58
$1.2 billion b $2.4 billion b
$425 million in 2006-07 —
$900 million in 2007-08 —
$1.45 billion in 2008-09d
14
a Net proceeds to the General Fund would likely be less, depending on reserve requirements and other factors.
b Costs are for 2004-05. Amounts would increase moderately annually thereafter.
0 Based on LAO out -year revenue projections and assumes no suspensions of transfer to reserve.
d These amounts would increase moderately annually thereafter until cumulative total from reserve equals $5 billion.
Near -Term Savings. The proceeds from the proposed bond would be up to $4 billion more
than from the currently authorized bond. This would provide the state with up to $4 billion in
additional one-time funds to address its budget shortfall. The state would also realize near-
term savings related to debt service on the bond. This is because the payments would be
based on one-quarter cent of annual sales taxes instead of one-half cent. As a result, annual
General Fund costs would be one-half of the currently authorized bond for the next few years.
Longer -Term Costs. The near-term savings would be offset by higher costs in the longer
term. This is because the proposed bond would be larger ($15 billion versus $10.7 billion) and
it would take longer to repay. As indicated in Figure 1, the proposed bond would likely take
between 9 and 14 years to pay back, compared to a 5 -year period for the currently authorized
bond.
Return to Initiatives_ and Propositions
Return to Legislative Analyst's Office Home -Page
http://www.lao.ca.gov/initiatives/2004/57_03_2004.htm 1/29/2004
Agenda # 6.8 (b)
Meeting Date: Feb. 3, 0 4
CITY COUNCIL AGENDA REPORT
rN�<)RPORA,��
r9S9
TO: Honorable Mayor and Members the City Council
VIA: Linda C. Lowry, City Manage
TITLE: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DIAMOND BAR
SUPPORTING PROPOSITION 58: THE CALIFORNIA BALANCED BUDGET ACT
RECOMMENDATIONS:
It is recommended that the City Council adopt the Resolution.
FISCAL IMPACT:
The impact of the measure on the City of Diamond Bar is undeterminable at this time.
However, California cities would most certainly face increased reduction in State subventions if the
State is unable to balance its budget. A detailed summary of the fiscal impact on the State is
attached in the Legislative Analyst Office report (see Fiscal Impact).
BACKGROUND / DISCUSSION:
California has experienced major budget difficulties in recent years. After a period of high growth in
revenues and expenditures in the late 1990s, state tax revenues plunged in 2001 and the budget fell
badly out of balance. Although policymakers reduced program spending and increased revenues to
deal with part of the shortfalls, the State has also carried over large deficits and engaged in a
significant amount of borrowing from funds such as those for local government. The State budget
faces another major shortfall in 2004-05, and it has a variety of other obligations—such as deferrals
and loans from special funds—that are outstanding at this time.
There are four main portions to this initiative
Balanced Budget Requirement: The initiative will change the State constitution to require the budget
ultimately passed by the Legislature or signed by the Governor to be balanced.
Mid -Year Budget Adjustments: Proposition 58 will create a formal process in the Constitution to
require that mid -year corrective actions be taken when the budget falls out of balance.
Reserve Requirement. Reserve funds are typically used to cushion against unexpected budget
shortfalls. The Constitution requires that the Legislature establish a prudent State Reserve Fund. It
does not, however, specify the size of the Reserve, or the conditions under which funds are placed
into the Reserve. Proposition 58 will do this. More information regarding the Reserve requirement
can be found in the attached LAO report.
Debt Related Provisions: The Constitution generally requires voter approval for debt backed by the
State's general taxing authority. Over the years, courts have ruled that certain types of borrowing
(including short-term borrowing to cover cash shortfalls and some bonds repaid from specific revenue
sources) can occur without voter approval. The Constitution also requires that bonds submitted to the
voters for approval be for a "single object or work" as specified in the respective bond act. For
example, in past years, voters have been asked to authorize bonds for such single objects as
education facilities, water projects, or prison construction. This portion of the initiative provides an
exemption with regard to the "single object or work" bond criteria and thus, accommodates the $15
billion bond proposal in Proposition 57: The Economic Recovery Bond Act.
Prepared with information from the State Legislative Analyst's Office.
Prepared by:
Ji larke, Legislative Analyst
Proposition 58: The California Balanced Budget Act
60 FEARS OF SERVICE
December, 2003
Background
legislative
analysts
office
Proposition 58
The California Balanced Budget Act
California's Budget Situation
Page 1 of 4
California has experienced major budget difficulties in recent years. After a period of high
growth in revenues and expenditures in the late 1990s, state tax revenues plunged in 2001
and the budget fell badly out of balance. Although policymakers reduced program spending
and increased revenues to deal with part of the shortfalls, the state has also carried over large
deficits and engaged in a significant amount of borrowing. The state budget faces another
major shortfall in 2004-05 and it has a variety of other obligations—such as deferrals and loans
from special funds—that are outstanding at this time.
Constitutional Provisions Relating to Budgeting and Debt
There are several budget- and debt -related provisions in California's Constitution that are
affected by this proposition.
Balanced Budget Requirement. The Constitution requires the Governor to submit by
January 10 of each year a state budget proposal for the upcoming fiscal year (beginning
on July 1) which is balanced—meaning that estimated revenues must meet or exceed
proposed expenditures. While this balanced budget requirement applies to the
Governor's January budget submission, it does not apply to the budget ultimately passed
by the Legislature or signed by the Governor.
• Mid -Year Budget Adjustments. The Legislature has met in special session during the
past three years to consider mid -year proposals to address budget shortfalls. However,
there is no formal process in the Constitution to require that mid -year corrective actions
be taken when the budget falls out of balance.
• Reserve Requirement. Reserve funds are typically used to cushion against unexpected
budget shortfalls. The Constitution requires that the Legislature establish a prudent state
reserve fund. It does not, however, specify the size of the reserve, or the conditions
under which funds are placed into the reserve.
http://www.lao.ca.gov/initiatives/2004/58_03_2004.htm 1/29/2004
Proposition 58: The California Balanced Budget Act
Page 2 of 4
Debt -Related Provisions. The Constitution generally requires voter approval for debt
backed by the state's general taxing authority. Over the years, courts have ruled that
certain types of borrowing (including short-term borrowing to cover cash shortfalls and
some bonds repaid from specific revenue sources) can occur without voter approval. The
Constitution also requires that bonds submitted to the voters for approval be for a "single
object or work" as specified in the respective bond act. For example, in past years, voters
have been asked to authorize bonds for such single objects as education facilities, water
projects, or prison construction.
Proposal
This proposition amends the Constitution, making changes related to (1) the enactment and
maintenance of a balanced state budget, (2) the establishment of specific reserve
requirements, and (3) a restriction on future deficit -related borrowing. The provisions are
discussed in more detail below.
Balanced Budget Provisions
This proposition requires that the state adopt a balanced budget and provides for mid -year
adjustments in the event that the budget falls out of balance.
Balanced Budget. In addition to the existing requirement that the Governor propose a
balanced budget, this measure requires that the state enact a budget that is balanced.
Specifically, estimated revenues would have to meet or exceed estimated expenditures in
each year.
Mid -Year Adjustments. Under this measure, if the Governor determines that the state is
facing substantial revenue shortfalls or spending deficiencies, the Governor may declare a
fiscal emergency. He or she would then be required to propose legislation to address the
problem, and call the Legislature into special session for that purpose. If the Legislature fails to
pass and send to the Governor legislation to address the budget problem within 45 days, it
would be prohibited from (1) acting on any other bills or (2) adjourning in joint recess until such
legislation is passed.
Reserve Requirement
The proposal requires that a special reserve—called the Budget Stabilization Account (BSA)—
be established in the state's General Fund.
Annual Transfers. A portion of estimated annual General Fund revenues would be transferred
by the State Controller into the account no later than September 30 of each fiscal year. The
specific transfers are 1 percent (about $850 million) in 2006-07, 2 percent (about $1.8 billion)
in 2007-08, and 3 percent (about $2.9 billion) in 2008-09 and thereafter. These transfers would
continue until the balance in the account reaches $8 billion or 5 percent of General Fund
revenues, whichever is greater. The annual transfer requirement would be in effect whenever
the balance falls below the $8 billion or 5 percent target. (Given the current level of General
Fund revenues—approximately $75 billion—the required reserve level would likely be $8 billion
for at least the next decade.)
Suspension of Transfers. The annual transfers could be suspended or reduced for a fiscal
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Proposition 58: The California Balanced Budget Act Page 3 of 4
year by an executive order issued by the Governor no later than June 1 of the preceding fiscal
year.
Allocation of Funds. Each year, 50 percent of the annual transfers into the BSA would be
allocated to a subaccount that is dedicated to repayment of the deficit -recovery bond
authorized by Proposition 57. These transfers would be made until they reach a cumulative
total of $5 billion. Funds from this subaccount would be automatically spent for debt service on
that bond. The remaining funds in the BSA would be available for transfer to the General Fund.
Spending From the Account. Funds in the BSA could be transferred from this account to the
General Fund through a majority vote of the Legislature and approval of the Governor.
Spending of these monies from the General Fund could be made for various purposes—
including to cover budget shortfalls—generally with a two-thirds vote of the Legislature (same
as current law).
Related Provisions in Proposition 56. Proposition 56 on this ballot also contains new, but
different, requirements related to a state reserve fund.
Prohibition Against Future Deficit Borrowing
Subsequent to the issuance of the bonds authorized in Proposition 57, this proposal would
prohibit most future borrowing to cover budget deficits. This restriction applies to general
obligation bonds, revenue bonds, and certain other forms of long-term borrowing. The
restriction does not apply to certain other types of borrowing, such as (1) short-term borrowing
to cover cash shortfalls in the General Fund (including revenue anticipation notes or revenue
anticipation warrants currently used by the state), or (2) borrowing between state funds.
Other Provisions
This measure also states that:
. With regard to the bond authorized by Proposition 57, the "single object or work" for
which the Legislature may create debt includes—for that measure only—the one-time
funding of the accumulated state budget deficit and other obligations, as determined by
the Director of Finance.
. Its provisions take effect only if Proposition 57 on this ballot is also approved by the
voters.
Fiscal Effects
This measure could have a variety of fiscal effects, depending on future budget circumstances
and future actions taken by Governors and Legislatures. Possible fiscal effects include:
Balanced Budget and Debt Provisions. In recent years, as well as during difficult
budget periods in the past, the Governor and Legislature have at times allowed
accumulated budget deficits to carry over from one year to the next. This meant that
spending reductions and/or revenue increases were less than what they otherwise would
have been in those years. The provisions of this measure requiring a balanced budget
and restricting borrowing would limit the state's future use of this option. As a result, the
http://www.lao.ca.gov/initiatives/2004/58_03_2004.htm 1/29/2004
Proposition 58: The California Balanced Budget Act
Page 4 of 4
state would in some cases have to take more immediate actions to correct budgetary
shortfalls.
Reserve Requirement. The $8 billion reserve target established by this proposition is
much larger than the amounts included in past budget plans. This larger reserve could be
used to smooth state spending over the course of an economic cycle. That is, spending
could be less during economic expansions (as a portion of the annual revenues are
transferred into the reserve), and more during downturns (as the funds available in the
reserve are used to "cushion" spending reductions that would otherwise be necessary).
• Other Possible Impacts. The proposition could have a variety of other impacts on state
finances. For example, to the extent that the measure resulted in more balanced budgets
and less borrowing over time, the state would benefit financially from higher credit ratings
and lower debt -service costs.
Return to Initiatives and Propositions
Return to Legislative Analyst's Office Home Paae
http://www.lao.ca.gov/initiatives/2004/58_03_2004.htm 1/29/2004
RESOLUTION NO. 2004-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DIAMOND BAR
SUPPORTING PROPOSITION 58: THE CALIFORNIA BALANCED BUDGET
ACT
WHEREAS, California's General Fund budget supports a variety of programs,
including public schools, higher education, health, social services, and prisons;
and
WHEREAS, the State General Fund has experienced chronic shortfalls between
revenues and expenditures since 2001-02; and
WHEREAS, policymakers have reduced program expenditures, raised revenues,
and taken a variety of other measures including borrowing from local
governments; and
WHEREAS, Proposition 58: The California Balanced Budget Act will amend the
Constitution in order to enact and maintain a balanced State budget; and
WHEREAS, Proposition 58 establishes specific State budget reserve
requirements; and
WHEREAS, Proposition 58 will establish a restriction on future deficit -related
borrowing; and
WHEREAS, Proposition 58 provides an exemption to the "single object or work"
bond criteria and thus, accommodates the $15 billion bond proposal in
Proposition 57: The Economic Recovery Bond Act
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of
Diamond Bar SUPPORTS Proposition 58: The California Balanced Budget Act
and directs the following:
SECTION 1. That the City Council of the City of Diamond Bar shall adopt the
Resolution and the City Clerk shall certify to the adoption
SECTION 2. That the City Council of the City of Diamond Bar asks all elected
officials and Diamond Bar voters to support Proposition 58.
PASSED, APPROVED AND ADOPTED this 3rd of February 2004.
Bob Zirbes, Mayor
I, LYNDA BURGESS, City Clerk of the City of Diamond Bar, California do hereby
certify that the foregoing Resolution passed, approved and adopted at a regular
meeting held on the 3rd day of February—, 2004, by the following vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ABSTAINED: COUNCIL MEMBERS:
LYNDA BURGESS, CITY CLERK
CITY OF DIAMOND BAR
AGREEMENT BETWEEN CITY OF DIAMOND BAR AND
THE DIAMOND BAR LITTLE LEAGUE FOR
RECREATIONAL USE OF BALLFIELDS
THIS AGREEMENT is made and entered into this 3rd day of February, 2004, by and
between CITY OF DIAMOND BAR, a municipal corporation of the State of California, herein
called "City," and the DIAMOND BAR LITTLE LEAGUE, a California non-profit corporation,
herein called "Little League" (collectively sometimes called the "Parties").
RECITALS:
A. Little League owns property located at the west terminus of Sunset Crossing Road
improved with four (4) baseball fields and used in connection with its youth baseball programs
(the "property").
B. City and Little League desire to provide by contract for the City's use of the property
by City for community recreation activities in exchange for a one-time payment by City to be
applied towards improvements to the Little League's facilities located on the property.
C. Maximizing use of the recreational facilities on the property advances the public
interest and benefits the youth of Diamond Bar.
NOW, THEREFORE, in consideration of the covenants and conditions hereinafter set
forth, it is agreed as follows:
I. Property
The property subject to this Agreement is the site owned by the Little League and located
at the west terminus of Sunset Crossing Road in the City of Diamond Bar, commonly
known as the Diamond Bar Little Complex, as described and shown in Exhibit "A",
attached hereto and incorporated herein by this reference. The property shall be available
to City for public recreation purposes consistent with this Agreement, in accordance with
the schedule attached hereto as Exhibit B, attached hereto and incorporated herein by this
reference, which schedule may be amended from time to time by agreement of the
Parties. The President of the Little League and the City Manager are authorized on behalf
of the parties to amend the schedule.
II. Rules and Regulations
City shall conduct its recreational activities in accordance with Little League's rules and
regulations regarding the conduct of persons using the property for baseball purposes.
City's activities shall be properly supervised by qualified personnel.
III. Consideration.
In consideration of City's use of the property for City sponsored baseball programs, City
shall pay to Little League within thirty days of execution of this Agreement a lump sum,
one-time payment of $20,200, which sum shall be used by Little League in its discretion
towards improvements to the property.
IV. Maintenance Responsibilities
Little League shall, at its own cost and expense, during the term of this Agreement,
maintain the property in good and proper condition as a baseball field, in a manner as to
ensure its appearance, longevity and safe condition for youth baseball. City shall have no
maintenance responsibilities for the property (other than clean-up following its activities),
nor shall City make any alterations to the property. City shall be responsible for the cost
of repairing any damage to the property caused by or attributable to its activities pursuant
to this Agreement.
V. Term of This Agreement
This Agreement shall be in effect for four (4) years from the date of the last signature
affixed hereto, until June 30, 2008.
VI. Mutual Indemnification
Each party agrees to indemnify, defend, and hold harmless the other party, its officers,
agents and employees from any and all liabilities, claims, or losses of any nature,
including reasonable attorneys' fees and costs of suit, to the extent caused by, arising out
of, or in connection with, the indemnifying party's negligent or wrongful acts or
omissions arising from its respective activities pursuant to this Agreement.
VII. Modification of Agreement
This Agreement may be amended only in writing signed by both City and Little League.
VIII. Notices
All notices permitted or required under this Agreement shall be in writing,
and shall be deemed made when delivered to the applicable party at the following
addresses either by first class mail postage prepaid, facsimile or personal delivery:
If to City:
City of Diamond Bar
21825 E. Copley Drive
Diamond Bar, CA 91765
Attention: Community Services Director
-2-
If to Little League:
Diamond Bar Little League
P.O. Box 4113
Diamond Bar, CA 91765
Attention: League President
IX. Agreement binding
Each party warrants that the individuals who have signed this Agreement
have the legal power, right and authority to make this Agreement and bind the party for
whom he or she is signing.
WHEREFORE, the Parties hereto have executed this Agreement on the _ day of
,20
CITY OF DIAMOND BAR
By:
MAYOR
DIAMOND BAR LITTLE LEAGUE
By:
PRESIDENT
ATTEST: APPROVED TO FORM:
By: By:
City Clerk City Attorney
-3-
Exhibit "B"
City of Diamond Bar Schedule of Use
2004-2008
Dates Purpose of Use Time
Saturday, January 17, 2004 Youth Baseball Clinic 7:00 A.M.— 1:00 P.M.
Date TBA, 2005 Youth Baseball Clinic Time TBA
Date TBA, 2006 Youth Baseball Clinic Time TBA
Date TBA, 2007 Youth Baseball Clinic Time TBA
Date TBA, 2008 Youth Baseball Clinic Time TBA
-5-
ol 10,01 PONG R
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41
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WINDOWS
Agenda #
6.7
Meeting Date: February 03, 2004
CITY COUNCIL AGENDA REPORT
ljgq
TO: Honorable Mayor and Members of the City Council
Au�VIA: Linda C. Lowry, City Manager
TITLE: Increase in contract amount for City Prosecutor services provided by Dapeer,
Rosenblit & Litvak, LLP.
RECOMMENDATION:
Approve the contract amendment.
FINANCIAL IMPACT:
The requested contract amendment is consistent with the adopted FY 2003-2004 Budget (001-5230-
45213).
BACKGROUND:
On December 8, 2002, the City entered into a Professional Services Agreement with Dapeer,
Rosenblit & Litvak, LLP in the amount of $15,000.00 to provide services as City Prosecutor. Attorney
Steve Rosenblit provides legal assistance to the City on an "as -needed" basis for assigned code
enforcement cases. On June 18, 2003, the contract was supplemented with an allocation of $10,000.
Ongoing assignments and anticipated casework will require an additional allocation of resources for
the balance of this fiscal year. Authorization from the City Council is required in order to continue the
services provided by the consultant.
It is recommended that the "as -needed" contract compensation be increased by $13,000.00 to permit
the continued use of the firm. If authorized, the amendment to the contract will reflect a total contract
compensation amount of $38,000.00. The City Council Neighborhood Improvement Subcommittee
recommends approval of the amendment.
PREPARED BY:
James DeStefano
Deputy City Manager
Attachment: Supplemental Agreement No. 2
SUPPLEMENTAL AGREEMENT NO.2 TO THE CITY'S AGREEMENT FOR
LEGAL SERVICES IN CONJUNCTION WITH CODE ENFORCEMENT
This Supplemental Agreement No. 2 to the City's Agreement is made and entered into
this 3rd day of February, 2004, between the CITY OF DIAMOND BAR, a Municipal
Corporation (hereinafter referred to as "CITY") and Dapeer, Rosenblit & Litvak, LLP, a
California limited liability partnership (hereinafter referred to as the "FIRM".)
A. Recitals:
(i) The CITY has heretofore entered into an Agreement, dated December 8, 2002,
with the FIRM to provide legal services for code enforcement (hereinafter referred to as the
"AGREEMENT".)
(ii) The FIRM will provide additional legal services at a cost not to exceed
THIRTEEN THOUSAND DOLLARS ($13,000.00.)
(iii) It is in the City's best interest to extend the AGREEMENT rather than request
bids for the services in order to ensure consistency and continuity of the services already being
provided by the FIRM.
NOW THEREFORE, it is agreed by and between CITY and the FIRM:
Section 1: In accordance with Section 10 of the AGREEMENT, and as authorized by
the City Council, the CITY agrees to compensate the FIRM, and the FIRM agrees to accept in
full satisfaction for the services provided for hereunder, fees on a time and material basis at the
rates set forth in the original AGREEMENT, but in no event to exceed THIRTY EIGHT
THOUSAND DOLLARS ($38,000.00.)
Section 2: Each party to this Supplemental Agreement No. 2 acknowledges that no
representation by any party, which is not embodied herein, or any other agreement, statement, or
promise not contained in this Supplemental Agreement No. 2 shall be valid and binding. Any
modification of this Supplemental Agreement No. 2 shall be effective only if it is in writing
signed by the parties.
Section 3:
All other terms and conditions of the AGREEMENT shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Supplemental
Agreement No. 2 as of the day and year first set forth above:
APPROVED AS TO FORM:
WA
Dapeer, Rosenblit & Litvak, LLP:
City Attorney Steven H. Rosenblit, Esq.
ATTEST:
City of Diamond Bar
City Clerk Mayor, Robert P. Zirbes
Date:
2
CITY COUNCIL
Agenda # 6 . s (a)
Meeting Date: Feb. 3, 04
AGENDA REPORT
TO: Honorable Mayor and Members pf1he City Council
VIA: Linda C. Lowry, City 9",
TITLE: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SUPPORTING PROPOSITION 57: THE ECONOMIC RECOVERY
STATEWIDE INITIATIVE TO HELP RETIRE THE STATE DEBT.
RECOMMENDATIONS:
It is recommended that the City Council adopt the Resolution.
FISCAL IMPACT:
DIAMOND BAR
BOND ACT - A
The impact of the bond measure on the City of Diamond Bar is undeterminable at this time.
However, California cities would most certainly face increased reduction in State subventions if the
State is unable to balance its budget. A detailed summary of the fiscal impact on the State is
attached in the Legislative Analyst Office (LAO) report (see Fiscal Impact).
BACKGROUND / DISCUSSION:
California's Recent Budget Problems: California's General Fund budget supports a variety of
programs, including public schools, higher education, health, social services, and prisons. The
General Fund has experienced chronic revenue shortfalls since 2001-02, when the economic and
stock market downturns caused State revenues to decline sharply. To deal with these shortfalls,
policymakers have reduced program expenditures, raised revenues, and taken a variety of other
measures including redirecting revenues previously passed to local government. They have also
engaged in various forms of borrowing from special funds, local governments, and private credit
markets.
Projected Shortfall. The State is facing another large budget shortfall in 2004-05, which the LAO
estimates will be in the general range of $15 billion.
Proposal. This proposition puts before the voters authorization for the State to issue a bond of up to
$15 billion to deal with its budget deficit. The bond authorized by this measure would be used in place
of the deficit -financing bond of a lesser amount authorized last year by the Legislature.
Repayment of Proposed Bond. The repayment of the bond would result in annual State General
Fund costs equivalent to one-quarter cent of California's sales tax revenues, compared to costs
equivalent to one-half cent of sales tax revenues for the currently authorized bond. In addition, certain
funds transferred to the State's Budget Stabilization Account (created in Proposition 58 on this ballot,
if approved) would be used to accelerate the repayment of the bond. The measure includes a backup
guarantee that if the sales tax revenues dedicated to the bond are insufficient to pay bond principal
and interest in any year, the General Fund will make up the difference.
This measure would become effective only if Proposition 58 on this ballot is also approved by the
voters.
Prepared with information from the State Legislative Analyst's Office.
Prepared by:
JirVVarke, Legislative Analyst
RESOLUTION NO. 2004-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DIAMOND BAR
SUPPORTING PROPOSITION 57: THE ECONOMIC RECOVERY BOND ACT -
A STATEWIDE INITIATIVE TO HELP RETIRE THE STATE DEBT
WHEREAS, California's General Fund supports a variety of programs, including
public schools, higher education, health, social services, and prisons, and
WHEREAS, the State General Fund has experienced chronic shortfalls between
revenues and expenditures since FY2001-02, and
WHEREAS, policymakers have reduced program expenditures, raised revenues,
and taken a variety of other measures including borrowing from local
government, and
WHEREAS, the State is facing another large budget shortfall in 2004-05 which is
estimated to be in the general range of $15 billion, and
WHEREAS, Proposition 57: The Economic Recovery Bond Act on the March
2004 ballot puts before the voters authorization for the State to issue a bond of
up to $15 billion to deal with its budget deficit, and
WHEREAS, the bond authorized by this measure would be used in place of the
deficit -financing bond of a lesser amount authorized last year by the Legislature,
and
WHEREAS, local governments including the City of Diamond Bar would certainly
have to make more severe budget cuts in Fiscal Year 2004-05 if the initiative is
not passed, and
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of
Diamond Bar SUPPORTS Proposition 57: The Economic Recovery Bond Act on
the March 2004 election ballot and directs the following:
SECTION 1. That the City Council of the City of Diamond Bar shall adopt the
Resolution and the City Clerk shall certify to the adoption.
SECTION 2. That the City Council of the City of Diamond Bar asks all elected
officials and Diamond Bar voters to support Proposition 57.
PASSED, APPROVED AND ADOPTED this 3rd of February 2004.
Bob Zirbes, Mayor
I, LYNDA BURGESS, City Clerk of the City of Diamond Bar, California do hereby
certify that the foregoing Resolution passed, approved and adopted at a regular
meeting held on the 3rd day of February-, 2004, by the following vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ABSTAINED: COUNCIL MEMBERS:
LYNDA BURGESS, CITY CLERK
CITY OF DIAMOND BAR
Proposition 57: The Economic Recovery Bond Act
LAO,
ad YEARS OF SERVICE'
December, 2003
Background
legislative
analyst's
office
Proposition 57
The Economic Recovery Bond Act
Page 1 of 3
California's Recent Budget Problems. California's General Fund budget supports a variety
of programs, including public schools, higher education, health, social services, and prisons.
The General Fund has experienced chronic shortfalls between revenues and expenditures
since 2001-02, when the economic and stock market downturns caused state revenues to
decline sharply. To deal with these shortfalls, policymakers have reduced program
expenditures, raised revenues, and taken a variety of other measures. They have also
engaged in various forms of borrowing from special funds, local governments, and private
credit markets.
Deficit -Financing Bond. One of the key actions taken to deal with the projected current -year
(2003-04) budget shortfall was the authorization of a $10.7 billion deficit -financing bond. The
purpose of this bond was to "wipe the slate clean" and eliminate the cumulative budget deficit
that would have existed at the end of 2002-03. This would allow the state to avoid the more
severe budget actions that would have been necessary to eliminate the deficit all at once. The
repayment of the currently authorized bond would be based on a multiple -step financing
process (see shaded box for details). It would result in annual General Fund costs equivalent
to one-half cent of the California's sales tax—or about $2.4 billion in 2004-05 and increasing
moderately each year thereafter—until the bond is paid off (in about five years).
Repayment of Deficit Bonds
Existing $10.7 Billion Bond. The previously authorized deficit -financing bond
was designed to be repaid through a multiple -step process that "freed up" a revenue
stream dedicated solely to repayment of the bond. This involved:
• The diversion of a one-half cent portion of the sales tax from local governments
to a special fund dedicated to the bond's repayment.
• A diversion of property taxes from school districts to local governments to offset
their sales tax loss.
• Added state General Fund payments to school districts to replace their diverted
property taxes.
As a result of these diversions, there is no net impact on local governments or
school districts. The full cost of the bond's repayment is borne by the state's
General Fund.
$15 Billion Proposition 57 Bond. Under this proposition, the bond repayment
http://www.lao.ca.gov/initiatives/2004/57_03_2004.htm 1/29/2004
Proposition 57: The Economic Recovery Bond Act
method described above would be the same, except that the amount of revenues
diverted would be equivalent to one-quarter cent of the state sales tax instead of the
one-half cent. The full cost of the bond would continue to be borne by the state's
General Fund.
Page 2 of 3
This deficit bond is currently being challenged in court and has not yet been issued. (In the
meantime, the carryover 2002-03 deficit is being financed through short-term borrowing, which
is due to be repaid in June 2004.)
Projected Shortfall in 2004-05. The state is facing another large budget shortfall in 2004-05,
which we estimate will be in the general range of $15 billion. This estimate assumes that the
currently authorized $10.7 billion deficit -financing bond is sold and that the carryover 2002-03
deficit is thereby taken off the books. Absent the bond proceeds from this sale, the budget
shortfall would be much larger.
Proposal
This proposition puts before the voters authorization for the state to issue a bond of up to
$15 billion to deal with its budget deficit. The bond authorized by this measure would be used
in place of the deficit -financing bond authorized last year by the Legislature.
Repayment of Proposed Bond. The repayment of the bond would result in annual General
Fund costs equivalent to one-quarter cent of California's sales tax revenues, compared to
costs equivalent to one-half cent of sales tax revenues for the currently authorized bond. In
addition, certain funds transferred to the state's Budget Stabilization Account (created in
Proposition 58 on this ballot, if approved) would be used to accelerate the repayment of the
bond. The measure includes a backup guarantee that if the sales tax revenues dedicated to
the bond are insufficient to pay bond principal and interest in any year, the General Fund will
make up the difference.
This measure would become effective only if Proposition 58 on this ballot is also approved by
the voters.
Fiscal Effects
The fiscal effects of the proposed bond are summarized in Figure 1, and compared to the
currently authorized deficit -financing bond. The proposed bond would result in near-term
budgetary savings compared to the bond authorized in current law, but added annual costs
over the longer term. Specifically:
http://www.lao.ca.gov/initiatives/2004/57_03_2004.htm 1/29/2004
Proposition 57: The Economic Recovery Bond Act
Figure 1
Comparison of Bond Authorized in Proposition 57
With Previouslv Authorized Bond
Page 3 of 3
Previously
Authorized
Deficit -Financing
Proposition 57 Bond Bond
Bond Amount $15 billion a $10.7 billion
Annual General Fund Costs:
• Annual costs related to sales tax diversion.
• Potential annual payments from Proposition 58 reserve.
Years to Pay Off Bond:
• Using only sales tax revenues.
• Assuming maximum $5 billion contribution from Proposition 58
$1.2 billion b $2.4 billion b
$425 million in 2006-07 —
$900 million in 2007-08 —
$1.45 billion in 2008-09d
14
a Net proceeds to the General Fund would likely be less, depending on reserve requirements and other factors.
b Costs are for 2004-05. Amounts would increase moderately annually thereafter.
0 Based on LAO out -year revenue projections and assumes no suspensions of transfer to reserve.
d These amounts would increase moderately annually thereafter until cumulative total from reserve equals $5 billion.
Near -Term Savings. The proceeds from the proposed bond would be up to $4 billion more
than from the currently authorized bond. This would provide the state with up to $4 billion in
additional one-time funds to address its budget shortfall. The state would also realize near-
term savings related to debt service on the bond. This is because the payments would be
based on one-quarter cent of annual sales taxes instead of one-half cent. As a result, annual
General Fund costs would be one-half of the currently authorized bond for the next few years.
Longer -Term Costs. The near-term savings would be offset by higher costs in the longer
term. This is because the proposed bond would be larger ($15 billion versus $10.7 billion) and
it would take longer to repay. As indicated in Figure 1, the proposed bond would likely take
between 9 and 14 years to pay back, compared to a 5 -year period for the currently authorized
bond.
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http://www.lao.ca.gov/initiatives/2004/57_03_2004.htm 1/29/2004
Agenda # 6.8 (b)
Meeting Date: Feb. 3, 0 4
CITY COUNCIL AGENDA REPORT
rN�<)RPORA,��
r9S9
TO: Honorable Mayor and Members the City Council
VIA: Linda C. Lowry, City Manage
TITLE: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DIAMOND BAR
SUPPORTING PROPOSITION 58: THE CALIFORNIA BALANCED BUDGET ACT
RECOMMENDATIONS:
It is recommended that the City Council adopt the Resolution.
FISCAL IMPACT:
The impact of the measure on the City of Diamond Bar is undeterminable at this time.
However, California cities would most certainly face increased reduction in State subventions if the
State is unable to balance its budget. A detailed summary of the fiscal impact on the State is
attached in the Legislative Analyst Office report (see Fiscal Impact).
BACKGROUND / DISCUSSION:
California has experienced major budget difficulties in recent years. After a period of high growth in
revenues and expenditures in the late 1990s, state tax revenues plunged in 2001 and the budget fell
badly out of balance. Although policymakers reduced program spending and increased revenues to
deal with part of the shortfalls, the State has also carried over large deficits and engaged in a
significant amount of borrowing from funds such as those for local government. The State budget
faces another major shortfall in 2004-05, and it has a variety of other obligations—such as deferrals
and loans from special funds—that are outstanding at this time.
There are four main portions to this initiative
Balanced Budget Requirement: The initiative will change the State constitution to require the budget
ultimately passed by the Legislature or signed by the Governor to be balanced.
Mid -Year Budget Adjustments: Proposition 58 will create a formal process in the Constitution to
require that mid -year corrective actions be taken when the budget falls out of balance.
Reserve Requirement. Reserve funds are typically used to cushion against unexpected budget
shortfalls. The Constitution requires that the Legislature establish a prudent State Reserve Fund. It
does not, however, specify the size of the Reserve, or the conditions under which funds are placed
into the Reserve. Proposition 58 will do this. More information regarding the Reserve requirement
can be found in the attached LAO report.
Debt Related Provisions: The Constitution generally requires voter approval for debt backed by the
State's general taxing authority. Over the years, courts have ruled that certain types of borrowing
(including short-term borrowing to cover cash shortfalls and some bonds repaid from specific revenue
sources) can occur without voter approval. The Constitution also requires that bonds submitted to the
voters for approval be for a "single object or work" as specified in the respective bond act. For
example, in past years, voters have been asked to authorize bonds for such single objects as
education facilities, water projects, or prison construction. This portion of the initiative provides an
exemption with regard to the "single object or work" bond criteria and thus, accommodates the $15
billion bond proposal in Proposition 57: The Economic Recovery Bond Act.
Prepared with information from the State Legislative Analyst's Office.
Prepared by:
Ji larke, Legislative Analyst
Proposition 58: The California Balanced Budget Act
60 FEARS OF SERVICE
December, 2003
Background
legislative
analysts
office
Proposition 58
The California Balanced Budget Act
California's Budget Situation
Page 1 of 4
California has experienced major budget difficulties in recent years. After a period of high
growth in revenues and expenditures in the late 1990s, state tax revenues plunged in 2001
and the budget fell badly out of balance. Although policymakers reduced program spending
and increased revenues to deal with part of the shortfalls, the state has also carried over large
deficits and engaged in a significant amount of borrowing. The state budget faces another
major shortfall in 2004-05 and it has a variety of other obligations—such as deferrals and loans
from special funds—that are outstanding at this time.
Constitutional Provisions Relating to Budgeting and Debt
There are several budget- and debt -related provisions in California's Constitution that are
affected by this proposition.
Balanced Budget Requirement. The Constitution requires the Governor to submit by
January 10 of each year a state budget proposal for the upcoming fiscal year (beginning
on July 1) which is balanced—meaning that estimated revenues must meet or exceed
proposed expenditures. While this balanced budget requirement applies to the
Governor's January budget submission, it does not apply to the budget ultimately passed
by the Legislature or signed by the Governor.
• Mid -Year Budget Adjustments. The Legislature has met in special session during the
past three years to consider mid -year proposals to address budget shortfalls. However,
there is no formal process in the Constitution to require that mid -year corrective actions
be taken when the budget falls out of balance.
• Reserve Requirement. Reserve funds are typically used to cushion against unexpected
budget shortfalls. The Constitution requires that the Legislature establish a prudent state
reserve fund. It does not, however, specify the size of the reserve, or the conditions
under which funds are placed into the reserve.
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Proposition 58: The California Balanced Budget Act
Page 2 of 4
Debt -Related Provisions. The Constitution generally requires voter approval for debt
backed by the state's general taxing authority. Over the years, courts have ruled that
certain types of borrowing (including short-term borrowing to cover cash shortfalls and
some bonds repaid from specific revenue sources) can occur without voter approval. The
Constitution also requires that bonds submitted to the voters for approval be for a "single
object or work" as specified in the respective bond act. For example, in past years, voters
have been asked to authorize bonds for such single objects as education facilities, water
projects, or prison construction.
Proposal
This proposition amends the Constitution, making changes related to (1) the enactment and
maintenance of a balanced state budget, (2) the establishment of specific reserve
requirements, and (3) a restriction on future deficit -related borrowing. The provisions are
discussed in more detail below.
Balanced Budget Provisions
This proposition requires that the state adopt a balanced budget and provides for mid -year
adjustments in the event that the budget falls out of balance.
Balanced Budget. In addition to the existing requirement that the Governor propose a
balanced budget, this measure requires that the state enact a budget that is balanced.
Specifically, estimated revenues would have to meet or exceed estimated expenditures in
each year.
Mid -Year Adjustments. Under this measure, if the Governor determines that the state is
facing substantial revenue shortfalls or spending deficiencies, the Governor may declare a
fiscal emergency. He or she would then be required to propose legislation to address the
problem, and call the Legislature into special session for that purpose. If the Legislature fails to
pass and send to the Governor legislation to address the budget problem within 45 days, it
would be prohibited from (1) acting on any other bills or (2) adjourning in joint recess until such
legislation is passed.
Reserve Requirement
The proposal requires that a special reserve—called the Budget Stabilization Account (BSA)—
be established in the state's General Fund.
Annual Transfers. A portion of estimated annual General Fund revenues would be transferred
by the State Controller into the account no later than September 30 of each fiscal year. The
specific transfers are 1 percent (about $850 million) in 2006-07, 2 percent (about $1.8 billion)
in 2007-08, and 3 percent (about $2.9 billion) in 2008-09 and thereafter. These transfers would
continue until the balance in the account reaches $8 billion or 5 percent of General Fund
revenues, whichever is greater. The annual transfer requirement would be in effect whenever
the balance falls below the $8 billion or 5 percent target. (Given the current level of General
Fund revenues—approximately $75 billion—the required reserve level would likely be $8 billion
for at least the next decade.)
Suspension of Transfers. The annual transfers could be suspended or reduced for a fiscal
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Proposition 58: The California Balanced Budget Act Page 3 of 4
year by an executive order issued by the Governor no later than June 1 of the preceding fiscal
year.
Allocation of Funds. Each year, 50 percent of the annual transfers into the BSA would be
allocated to a subaccount that is dedicated to repayment of the deficit -recovery bond
authorized by Proposition 57. These transfers would be made until they reach a cumulative
total of $5 billion. Funds from this subaccount would be automatically spent for debt service on
that bond. The remaining funds in the BSA would be available for transfer to the General Fund.
Spending From the Account. Funds in the BSA could be transferred from this account to the
General Fund through a majority vote of the Legislature and approval of the Governor.
Spending of these monies from the General Fund could be made for various purposes—
including to cover budget shortfalls—generally with a two-thirds vote of the Legislature (same
as current law).
Related Provisions in Proposition 56. Proposition 56 on this ballot also contains new, but
different, requirements related to a state reserve fund.
Prohibition Against Future Deficit Borrowing
Subsequent to the issuance of the bonds authorized in Proposition 57, this proposal would
prohibit most future borrowing to cover budget deficits. This restriction applies to general
obligation bonds, revenue bonds, and certain other forms of long-term borrowing. The
restriction does not apply to certain other types of borrowing, such as (1) short-term borrowing
to cover cash shortfalls in the General Fund (including revenue anticipation notes or revenue
anticipation warrants currently used by the state), or (2) borrowing between state funds.
Other Provisions
This measure also states that:
. With regard to the bond authorized by Proposition 57, the "single object or work" for
which the Legislature may create debt includes—for that measure only—the one-time
funding of the accumulated state budget deficit and other obligations, as determined by
the Director of Finance.
. Its provisions take effect only if Proposition 57 on this ballot is also approved by the
voters.
Fiscal Effects
This measure could have a variety of fiscal effects, depending on future budget circumstances
and future actions taken by Governors and Legislatures. Possible fiscal effects include:
Balanced Budget and Debt Provisions. In recent years, as well as during difficult
budget periods in the past, the Governor and Legislature have at times allowed
accumulated budget deficits to carry over from one year to the next. This meant that
spending reductions and/or revenue increases were less than what they otherwise would
have been in those years. The provisions of this measure requiring a balanced budget
and restricting borrowing would limit the state's future use of this option. As a result, the
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Proposition 58: The California Balanced Budget Act
Page 4 of 4
state would in some cases have to take more immediate actions to correct budgetary
shortfalls.
Reserve Requirement. The $8 billion reserve target established by this proposition is
much larger than the amounts included in past budget plans. This larger reserve could be
used to smooth state spending over the course of an economic cycle. That is, spending
could be less during economic expansions (as a portion of the annual revenues are
transferred into the reserve), and more during downturns (as the funds available in the
reserve are used to "cushion" spending reductions that would otherwise be necessary).
• Other Possible Impacts. The proposition could have a variety of other impacts on state
finances. For example, to the extent that the measure resulted in more balanced budgets
and less borrowing over time, the state would benefit financially from higher credit ratings
and lower debt -service costs.
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http://www.lao.ca.gov/initiatives/2004/58_03_2004.htm 1/29/2004
RESOLUTION NO. 2004-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DIAMOND BAR
SUPPORTING PROPOSITION 58: THE CALIFORNIA BALANCED BUDGET
ACT
WHEREAS, California's General Fund budget supports a variety of programs,
including public schools, higher education, health, social services, and prisons;
and
WHEREAS, the State General Fund has experienced chronic shortfalls between
revenues and expenditures since 2001-02; and
WHEREAS, policymakers have reduced program expenditures, raised revenues,
and taken a variety of other measures including borrowing from local
governments; and
WHEREAS, Proposition 58: The California Balanced Budget Act will amend the
Constitution in order to enact and maintain a balanced State budget; and
WHEREAS, Proposition 58 establishes specific State budget reserve
requirements; and
WHEREAS, Proposition 58 will establish a restriction on future deficit -related
borrowing; and
WHEREAS, Proposition 58 provides an exemption to the "single object or work"
bond criteria and thus, accommodates the $15 billion bond proposal in
Proposition 57: The Economic Recovery Bond Act
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of
Diamond Bar SUPPORTS Proposition 58: The California Balanced Budget Act
and directs the following:
SECTION 1. That the City Council of the City of Diamond Bar shall adopt the
Resolution and the City Clerk shall certify to the adoption
SECTION 2. That the City Council of the City of Diamond Bar asks all elected
officials and Diamond Bar voters to support Proposition 58.
PASSED, APPROVED AND ADOPTED this 3rd of February 2004.
Bob Zirbes, Mayor
I, LYNDA BURGESS, City Clerk of the City of Diamond Bar, California do hereby
certify that the foregoing Resolution passed, approved and adopted at a regular
meeting held on the 3rd day of February—, 2004, by the following vote:
AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:
ABSTAINED: COUNCIL MEMBERS:
LYNDA BURGESS, CITY CLERK
CITY OF DIAMOND BAR