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Home My WebLink About2012/10/23 Item 10CITY COUNCIL AGENDA STATEMENT ~~ CITY OF ~---- CHULA VISTA Item No.:_L~ Meeting Date: October 23, 2012 ITEM TITLE: RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA RECOGNIZING THE SAN DIEGO REGION MILITARY'S CONTRIBUTION TO THE WELL-BEING ~OF CHULA VISTA'S ECONOMY, ENDORSING LOCAL EFFORTS TO RAISE AWARENESS ABOUT THE NEGATIVE IMPACT OF AUTOMATIC REDUCTIONS IN THE DEPARTMENT OF DEFENSE'S BUDGET AND OPPOSING FURTHER CUTS TO FEDERAL PROGRAMS THAT FURTHER IMPACT CORE LOCAL GOVERNMENT PROGRAMS SUBMITTED BY: ASSISTANT CITY MANAGER/DEVELOPMENT SERVICES DIRECTOR S? B. 6 N REVIEWED BY: CITY MANAGER ASSISTANT CIT MANAGER/ DEVELOPMENT SERVICES DIIZECTOR S~ ~, 6. N 4/STNS VOTE: YES NO X SUMMARY In August 2011, bipartisan majorities in both the House and Senate voted for sequestration as a mechanism to force Congress to act on further deficit reduction. The specter of across-the-board cuts to defense and nondefense programs was intended to drive both sides to compromise. Unless a budget compromise agreement is reached, sequestration will result in $].2 trillion dollars in automatic cuts to defense and non-defense programs beginning in January 2013. Funding reductions to such locally administered programs as CDBG, HOME, COPS, and the Byrne Justice Assistance Grant would have significant impacts on City operations and residents. Reductions in defense programs will have severe impacts on Chula Vista residents that are employed by the military or military related companies, as well as military related and dependent businesses. 10-1 Item No.:~ Meeting Date:10/23/12 Page 2 of 3 The City of Chula Vista has been asked by regional economic development organizations to adopt a resolution recognizing the importance of the San Diego region's military sector to the well-being of the City and regional economy and endorsing local efforts to raise awareness about the negative impact of automatic reductions in the Department of Defense's budget In addition, the League of California Cities has asked cities to adopt a similar resolution opposing further cuts to Federal programs that further impact core local government programs. ENVIRONMENTAL REVIEW The Environmental Review Coordinator has reviewed the proposed activity for compliance with the California Environmental Quality Act (CEQA) and has determined that the activity is not a `'Project" as defined under Section 15378 of the State CEQA Guidelines, therefore, pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to CEQA. Thus, no environmental review is necessary. RECOMMENDATION Council adopt the resolution. BOARDS/COMMISSION RECOMMENDATION N/A DISCUSSION The San Diego regional economy benefits greatly from the continued presence of the Navy and Marine Corps forces, bases, and activities. The region is host to the largest Navy-Marine Corps complex in the world. The City of Chula Vista has a significant number of residents that are employed by the military or military related companies, and is home to a significant number of military related and dependent businesses. The San Diego Military Advisory Council estimated that a total of $20.6 billion of direct spending related to defense would flow into San Diego County during fiscal year 2012. The Council estimates that the military sector is responsible for 311,000 of the region's total jobs in 2012, representing one out of every four jobs in the region's economy. The Council further estimates that the automatic cuts to the Defense Department scheduled to begin in January 2013 will generate severe impacts to both Chula Vista and San Diego County businesses and residents. The Federal Budget Control Act of 2011 mandates substantial reductions in Department of Defense spending over the next ten years. In particular, there will be an automatic reduction of approximately $500 billion beginning this year and, if "sequestration" (a budget reduction mandate) occurs in January of 2013, a reduction of an additional $500 billion in Department of Defense spending over the next ten years beginning in 2013. The San Diego Regional EDC has organized "Operation San Diego," to inform the public about the potential negative effects of automatic reductions in Department of Defense spending on the 10-2 Item No.: l (7 Meeting Date:10/23/12 Page 3 of 3 San Diego region and to develop and sustain a comprehensive regional strategy to protect, retain and expand the military assets in San Diego. In addition to impacting defense and defense related businesses, sequestration will also impact non-defense programs. Reductions to City administered programs such as CDBG and HOME would reduce the City's ability to provide services and housing opportunities to its low and moderate income residents. Reductions to grant programs such as COPS and the Byrne Justice Assistance Grant will impact the City's ability to hire new police offtcers and purchase new safety equipment. The Federal Office of Management and Budget estimates that the reductions to these programs will be 8%-9% per year through Fiscal Year 2021. As part of Operation San Diego, the South County EDC has asked that the City adopt the proposed resolution recognizing the importance of the military to the health of the local economy. The resolution also endorses the efforts of local businesses and community organizations to inform and call to action the public and elected officials in Washington, D.C. about the potential negative impacts of automatic reductions in Department of Defense spending on the local economy. Further, the League of California Cities has asked cities to adopt a similar resolution opposing further cuts to Federal programs that further impact core local government programs. DECISION-MAKER CONFLICTS: Staff has reviewed the decision contemplated by this action and has determined that it is not site- specific and consequently, the 500-foot rule found in California Code of Regulations Section 18704.2(a)(1) is not applicable to this decision. Staff is not independently aware, nor has staff been informed by any City Councilmember, of any other fact that may constitute a basis for a decision-maker conflict of interest in this matter. CURRENT YEAR FISCAL IMPACT There are no anticipated direct fiscal impacts to the City in the current fiscal year. ONGOING FISCAL IMPACT Ongoing impacts are anticipated to begin ~n the City's Fiscal Year 2014 budget. The City's CDBG budget is expect to be reduced by approximately $130,000 and the HOME program by approximately $50,000. Similaz annual reductions are likely to continue through 2021 unless the federal government reaches a compromise agreement to the Budget Control Act of 20l ] . ATTACHMENTS N/A Prepared by: Craig Ruiz, Principal Economic Development Specialist, Economic DevelopmenUAdministration 10-3 COUNCIL RESOLUTION NO. RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CHULA VISTA RECOGNIZING THE IMPORTANCE OF THE SAN DIEGO REGION MILITARY'S CONTRIBUTION TO THE WELL-BEING OF CHULA VISTA'S ECONOMY, ENDORSING LOCAL EFFORTS TO RAISE AWARENESS ABOUT THE NEGATIVE IMPACT OF AUTOMATIC REDUCTIONS IN THE DEPARTMENT OF DEFENSE'S BUDGET, AND OPPOSING FURTHER CUTS TO FEDERAL PROGRAMS THAT FURTHER IMPACT CORE LOCAL GOVERNMENT PROGRAMS WHEREAS, in August 2011 Public Law ("PL") 111-25 was signed into law and was meant to effectuate an agreement to raise the Federal debt ceiling by 2.1 Trillion and to reduce federal spending by the same amount; and WHEREAS, PL 112-25 instituted annual caps on defense and non-defense discretionary spending that are designed to reduce the deficit by $2.1 trillion over the next ten years; and WHEREAS, PL 112-25 also created a 12-member congressional Joint Select Committee on Deficit Reduction (the "Super Committee") that was tasked with reviewing the entire federal budget and finding an additional $1.5 trillion in spending reductions over the next ten years by November 23, 2011; and WHEREAS, the Super Committee deadlocked; and WHEREAS, in the event of a Super Committee deadlock, PL 112-95 called for an additional $1.2 trillion in cuts to discretionary spending to be spread over the next nine years beginning in FY 2013, and split evenly between defense and non-defense discretionary spending; and WHEREAS, the additional $1.2 trillion cut is called "sequestration" and is scheduled to be implemented in January, 2013; and ' WHEREAS, recent cuts to non-defense discretionary spending have already significantly impacted core local government programs such as CDBG, HOME, infrastructure grants and local law enforcement assistance; and WHEREAS, the spending levels imposed by sequestration would lead to non-defense discretionary spending levels that would severely impact core local government programs; and WHEREAS, the City of Chula Vista, and its residents and businesses have a long history of working with the Department of Defense and the Department of the Navy; and 10-4 Resolution No. Page 2 WHEREAS, the San Diego region hosts the largest Navy-Marine Corps Complex in the world; and WHEREAS, the Navy and Marine Corps forces, bases, and activities in the San Diego region contribute greatly to the health of the Chula Vista economy; and WHEREAS, a significant number of military personnel reside in the City of Chula Vista and residents of Chula Vista work for Militazy related businesses; and WHEREAS, a significant number of military related and dependent businesses are located within the City of Chula Vista; and WHEREAS, San Diego Military Advisory Council's 2012 Economic Impact Study by the Fermanian Business and Economic Institute at Point Loma Nazarene University, states that "An estimated total of $20.6 billion of direct spending related to defense will flow into San Diego County during fiscal year 2012..." and "The military sector is responsible for 311,000 of the region's total jobs in 2012 after accounting for all of the ripple effects of defense spending," representing one out of every four jobs in the region's economy; and WHEREAS, according to the San Diego Militazy Advisory Council's 2012 Economic Impact Study, "Defense-related activities and spending will generate $32 billion of gross regional product for San Diego County in fiscal year 2012," and "Each defense-related dollar entering the San Diego region generates additional jobs, income, and output as orders feed through the supply chain and workers employed throughout that chain spend some of their resulting incomes on the region's goods and services;" and WHEREAS, the San Diego Regional Economic Development Corporation has informed the City that the Federal Budget Control Act of 2011 mandates substantial reductions in Department of Defense spending over the next ten years, in particular, an automatic reduction of approximately $500 Billion beginning this year and, if sequestration occurs in January of 2013, a reduction of an additional $500 Billion in Department of Defense spending over the next ten years beginning in 2013; and WHEREAS, San Diego Regional Economic Development Corporation estimates that 31,000 jobs in the San Diego region could be lost as a result of automatic reductions in the Department of Defense budget; and WHEREAS, a coalition of local businesses and community organizations have constituted "Operation San Diego" to inform the public about the potential negative effects of these reductions in Department of Defense spending on the San Diego community and to develop and sustain a comprehensive regional strategy to protect, retain and expand the military assets in the region. 10-5 Resolution No. Page 3 NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Chula Vista that the City Council recognizes the importance of the Navy and Mazine Corps forces, bases, and activities to the health of the local economy, endorses the efforts of local businesses and community organizations to inform and call to action the public and elected officials in Washington, D.C. about the potential negative impacts of reductions in Department of Defense spending on the local economy, and opposes further cuts to federal programs that further impact core local government programs Presented by Gary Halbert, AICP, PE Assistant City Manager/Director of Development Services Approved as to form by 1 J `-' Glen R. Googins City Attorney 10-6