New City Projects Disincorporation Date without Restoration of VLF Funds Taken by SB 89
We’ve relayed previously that when the state snatched up millions in revenues from Vehicle License Fees under SB 89, cities were irate, and new cities were left in a particularly precarious financial position. Take Jurupa Valley: it’s the only city that has actually projected a disincorporation date (September 30, 2013) due to the crippling effects of the state’s legislation on its funding. Newly incorporated cities have traditionally relied upon the funding stream from VLF receipts for up to five years to help them gain their footing, but SB 89 put at risk the very livelihood of California’s youngest cities when it dried up that revenue source.
Officials in Jurupa Valley certainly don’t want to hold the record for being one of the shortest- lived municipalities in California history by being forced to dissolve in around a year. So they pushed for legislators to fix the funding crisis by approving Senate Bill 1566, which would have restored funds to the four cities that incorporated after 2004. However, the bill died last month in the Senate Appropriations Committee.
Mayor Laura Roughton commented that “We played by the rules and met all the requirements, and now, through no fault of our own, we face what I call the 'D Word' – disincorporation. [...] Our budget is bare bones. The only employees we have are the city council members. Everyone else is contracted ... We haven't even had time to make any bad fiscal decisions.”
City News Service reports that “funding loss from SB 89 represented a nearly 50 percent hit to the nascent city's budget.” Jurupa expected to have a balanced budget for 2012-13 and the years ahead if it had not been for SB 89. Read more here.