BILL ANALYSIS                                                                                                                                                                                                    Ó




                     SENATE GOVERNANCE & FINANCE COMMITTEE
                            Senator Lois Wolk, Chair
          

          BILL NO:  SB 288                      HEARING:  4/6/11
          AUTHOR: Negrete McLeod                FISCAL:  No
          VERSION: 3/29/11                      TAX LEVY:  No
          CONSULTANT:  Lui                      

                           SPECIAL DISTRICTS' FUNDS 
                                        

          Expands independent special districts' authority to 
          establish revolving funds.


                           Background and Existing Law

           California's 3,294 special districts are separate local 
          governments that provide specialized services like fire, 
          water, irrigation, cemetery, and mosquito abatement and 
          vector control, in geographically defined areas.  
          Two-thirds are independent special districts that operate 
          under governing boards that are either elected by the 
          districts' voters or are appointed for fixed terms.  In 
          contrast, dependent special districts are governed by city 
          councils or county boards of supervisors ex officio.

          Each independent special district varies in size and type 
          of service it provides. Some independent special districts' 
          governing boards designate their own treasurers.  Other 
          districts use the county treasurer as the district's 
          treasurer.  For special districts that use the county 
          treasurer, the process for paying bills can be lengthy and 
          expensive.  Special districts get warrants, or checks, from 
          the county treasurer, but delayed warrants can result in 
          late payments to vendors. Further, some districts have to 
          pay the county treasurer for this service, sometimes almost 
          $5 for each county warrant. 

          In 1976, the Legislature authorized independent special 
          districts to establish a $1,000 petty cash fund to pay for 
          routine expenditures, like utility bills (AB 2997, Duffy, 
          1976).  This authority applied only to districts that used 
          the county treasury as the holding place for the districts' 
          funds.  In 1982, the Legislature authorized public cemetery 
          districts to establish revolving funds in an amount not to 
          exceed 110% of one-twelfth of the districts' adopted budget 




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          for the fiscal year (AB 2388, Kelley, 1982).  In 1990, AB 
          3179 (N. Waters, 1990) granted the same authority to 
          mosquito abatement and vector control districts.





                                   Proposed Law  

          Senate Bill 288 authorizes an independent special district 
          to establish, by resolution, a revolving fund in an amount 
          that does not exceed 110% of one-twelfth of the district's 
          adopted budget for the fiscal year.  SB 288 requires the 
          resolution establishing the revolving fund to designate:
                 The purposes for which the fund may be expended.
                 The district officer who is responsible for keeping 
               receipts and making disbursements. 
                 The necessity for the fund.
                 The maximum amount of the fund.


                               State Revenue Impact
           No estimate.


                                     Comment  

           Purpose of the bill  .  SB 288 creates consistency among the 
          enabling acts of independent special districts.  The $1,000 
          revolving fund limit has not been increased since 1976, and 
          the authority for establishing larger funds exists only for 
          public cemetery and mosquito abatement and vector control 
          districts.  Public cemetery districts and mosquito 
          abatement and vector control special districts have used 
          larger revolving funds for more than 20 years.  Authorizing 
          all independent special districts to establish larger 
          revolving funds can help them pay their routine 
          expenditures more efficiently and expediently.  The 110% of 
          the 1/12 district's adopted budget is just over one month's 
          worth of expenditures. 


                         Support and Opposition  (3/31/11)

           Support  :  California Special Districts Association, CA 





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          Association of Public Cemeteries

           Opposition  :  Unknown.