CITY OF LAGUNA NIGUEL
CITY COUNCIL AGENDA ITEM
1989
To: Honorable Mayor and Council Members
FROM: Tamara S. Letourneau, City Manager
DATE: February 20, 2024
SUBJECT: Adoption of Resolution No. 2024-1462, Opposing California Proposition 1
RECOMMENDATION
Council Member Gennawey and Council Member Johns recommend that the City Council adopt Resolution No. 2024-1462, Opposing California Proposition 1.
BACKGROUND
In February 2019, the City Council adopted the City's Legislative Platform. The legislative platform is comprised of "Guiding Principles" and "Policy Statements," which provide an outline and means for summarizing the City's core legislative principles and positions on legislative matters.
In 2004, California Voters approved Proposition 63, the Mental Health Services Act (MHSA). The act taxes individuals with income over $1 million per year and requires that the money collected from the tax be used for mental health services. At least 95 percent of MHSA funds go directly to counties that use them for mental health services. The rest of the money goes to the state to support mental health programs. Counties can only spend the MHSA money on certain types of services, but have flexibility in how those services are provided. The services include treatment for people with mental illness and prevention programs for people who may develop a mental illness. While counties can spend MHSA money on treatment for drugs and alcohol, the people receiving treatment must also have a mental illness.
On March 5, 2024, California Voters will consider Proposition 1 - Authorizes $6.38 Billion in Bonds to Build Mental Health Treatment Facilities for Those With Mental Health and Substance Use Challenges; Provides Housing for the Homeless. Legislative Statute.
ANALYSIS
This item was placed on the agenda at the request of Council Member Gennawey and Council Member Johns. Proposition 1 changes the MHSA, with a focus on how the money from the act can be used and approves a $6.4 billion bond to build (1) more places for mental health care and drug or alcohol treatment and (2) more housing for people with mental health, drug, or alcohol challenges.
Mental Health Services Act
Proposition 1 increases the share of MHSA funds the state receives for mental health programs by shifting approximately 5 percent of the funds counties receive to the state.
Proposition 1 requires the state to spend a dedicated amount of its MHSA money on increasing the number of mental health care workers and preventing mental illness and drug or alcohol addiction across communities. Since Proposition 1 does not change how the MHSA tax is levied on people with incomes over $1 million per year, counties will receive less funding for existing services.
Additionally, counties would be required to spend more MHSA funds on housing and personalized support services like employment assistance and education. While counties currently can use MHSA money to pay for these types of services, they are not required under MHSA to spend a particular amount. Counties would continue to provide other mental health services under the proposition, but less MHSA money would be available to them for these other mental health services. Examples of other mental health services include treatment, responding to people in a mental health crisis, and outreach to people who may need mental health care or drug or alcohol treatment. Additionally, Proposition 1 allows counties to use MHSA money on treatment for drugs and alcohol for people without a mental illness.
Amendments to the MHSA will require counties to provide more housing and personalized support services, with less MHSA money for other mental health services. This may result in counties reducing existing programs or using other funds to keep current service levels. $6.4 Billion Bond
Proposition 1 allows the state to sell $6.4 billion in new bonds to build more places for mental health and drug or alcohol treatment and more housing. Up to $4.4 billion would be allocated to state programs that build more places for mental health care and drug or alcohol treatment, with a minimum of $1.5 billion for local governments. The state estimates that the bond would build 6,800 places for people to receive mental health care and drug or alcohol treatment at any one time.
Proposition 1 would additionally allocate $2 billion for permanent supportive housing units, building on the existing Project Homekey Program. The housing added by the measure would be for people who are experiencing homelessness or at risk of becoming homeless and have mental health, drug, or alcohol challenges. The state estimates the bond would build 4,350 housing units, reducing the statewide homelessness by only a small amount.
Additionally, Proposition 1 erodes local control and could lead to the oversaturation of licensed drug and alcohol facilities in communities. Under existing law, cities are required to treat most licensed facilities as a "residential use" of property if they serve six or fewer people. Under Prop 1, existing law would be amended for all bond-funded projects to be use "by right" outside of a residential zone, including multifamily residential use, office, retail, and without limiting the number of residents.
The estimated fiscal impact of the $6.4 billion bond is $310 million per year for 30 years, for a total estimated cost of $9.3 billion. The bond repayment would be paid out of the state's General Fund, which has a projected $68 billion budget deficit for FY 2024-2025.
ALTERNATIVE CONSIDERED
The City Council may provide additional direction to staff.
FISCAL REVIEW
There is no fiscal impact as a result of this report.
LEGAL REVIEW
The City Attorney's office has approved this report and Resolution No. 2024-1462 (Attachment A) as to form.
CONCLUSION
Council Member Gennawey and Council Member Johns recommend that the City Council adopt Resolution No. 2024-1462, Opposing California Proposition 1.
Samara & Retousneau
Tamara S. Letourneau Scott C. Smith
City Manager City Attorney
Kenn X. O'conner
Kevin X. O'Connor
Management Assistant
Attachments:
A. Resolution No. 2024-1462
ATTACHMENT - A
Resolution No. 2024-1462
RESOLUTION NO. 2024-1462
RESOLUTION OF THE CITY COUNCIL
OF THE CITY OF LAGUNA NIGUEL, CALIFORNIA,
OPPOSING CALIFORNIA PROPOSITION 1
WHEREAS, Governor Gavin Newsom and a majority of the State Legislature placed Proposition 1 on the March 2024 ballot, which will completely rewrite the Mental Health Services Act; and,
WHEREAS, Proposition 1 is a bond and zoning proposal that will erode local- control, take away the rights of cities to have separate zoning for substance use disorder facilities, and enrich housing developers; and,
WHEREAS, this change in zoning would expedite and increase substance abuse and addiction treatment facilities in residential neighborhoods; and, WHEREAS, Proposition 1 is a massive $6.38 billion taxpayer-funded bond. It will cost the taxpayers $310 million annually for 30 years to service this bond. The combined principal and interest will cost the taxpayers an estimated $9.31 billion at a time when the State of California is already running a record budget deficit of $68 billion; and, WHEREAS, this bond is expected to build up to 4,350 housing units statewide, which would reduce statewide homelessness by only a small amount; and WHEREAS, the State of California recently spent $2 billion to build more places for mental health care, and $3.7 billion in new construction and for the conversion of hotels, motels, and other buildings; and,
WHEREAS, Proposition 1 will divert funding for addiction recovery efforts that serve homeless people to cover taxpayer subsidies for developers to build large-scale welfare housing projects across the state, at a cost estimate of up to $1 million per unit; and,
WHEREAS, Proposition 1 will strip funds (approximately $140 million annually) currently going to county-based mental health, drug and alcohol treatment programs and give that funding to the state; and,
WHEREAS, Proposition 1 does nothing to reverse the disastrous effect of Prop 47, which greatly contributes to homelessness by making it easier to abuse illegal narcotics; and,
WHEREAS, the City Council now wishes to adopt a formal position in opposition to Proposition 1.
NOW THEREFORE, BE IT RESOLVED, by the City Council of the City of Laguna Niguel as follows:
Section 1. The recitals set forth above are true and correct and incorporated herein by reference.
Section 2. The City of Laguna Niguel is strongly opposed to Proposition 1 because it will significantly diminish community safety and effective county mental health services.
Section 3. The City of Laguna Niguel is strongly opposed to Proposition 1 because the City stands for local control and for fiscal responsibility and believes decisions regarding zoning should be decided by local elected officials.
Section 4. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Resolution which can be given effect without the invalld provision or application, and to this end the provisions of this Resolution are severable. The City Council hereby declares that it would have adopted this Resolution irrespective of the invalidity of any particular portion thereof.
Section 5. This Resolution shall become effective upon its adoption.
PASSED, APPROVED AND ADOPTED this 20th day of February, 2024.
Kelly Jennings, Mayor
ATTEST:
Marissa J. Asistin, City Clerk