BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 911|
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THIRD READING
Bill No: SB 911
Author: De León (D)
Amended: 5/10/11
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 9-0, 05/04/11
AYES: Wolk, Huff, DeSaulnier, Fuller, Hancock, Hernandez,
Kehoe, La Malfa, Liu
SUBJECT : Local agency bonds: reports
SOURCE : Author
DIGEST : This bill requires, after January 1, 2012, that
the annual report filed by the chief fiscal officer of a
bond-issuers local agency must be filed within 60 days of
the end of an agency's fiscal year. This bill requires a
local government that issues voter-approved bonds in excess
of $5,000 to make the specified detailed information
available to any individual who requests it.
ANALYSIS : The California Constitution requires counties,
cities, and school districts to get voter approval for
long-term debt. Many bonds commonly sold by local
governments require voter approval, including General
obligation bonds, Revenue bonds, and Mello-Roos Act bonds.
Any local bond measure that is subject to voter approval
must provide accountability measures that include:
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A statement indicating the specific purposes of the
bond.
A requirement that the proceeds be applied only to
the specific purposes.
The creation of an account into which the proceeds
must be deposited.
An annual report.
(SB 165, Alarcón, Chapter 535, Statutes of 2000)
The chief fiscal officer of a local agency that issues
voter-approved bonds must file the annual report with the
agency's governing body. The report must contain:
The amount of bond funds collected and expended.
The status of any project required or authorized to
be funded, as identified in the measure approving the
bonds.
This bill requires, after January 1, 2012, that the annual
report filed by the chief fiscal officer of a bond-issuers
local agency must be filed within 60 days of the end of an
agency's fiscal year. This bill also provides that a chief
fiscal officer's failure to file an annual report by the
deadline, results in a suspension in the expenditure of
bond proceeds until the report is submitted.
This bill requires a local government that issues
voter-approved bonds in excess of $5,000 to make the
following information available to any individual who
requests it:
The name and principal location of each recipient
of funds.
The amount of the expenditure.
The type of transaction.
The identity of the local agency or authorized
entity making the expenditure.
The funding source for the expenditure.
A brief description of any item or service
purchased pursuant to the expenditure.
Comments
Exposing government decisions and documents to public
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review is an important ingredient of an informed democracy
because scrutiny can prevent mischief and even corruption.
As the late U.S. Supreme Court Justice Brandeis wrote in
1913, Sunlight is said to be the best of disinfectants.
Recent newspaper reports allege that the Los Angeles
Community College District (LACCD) mismanaged millions of
dollars in voter-approved bond proceeds by, among other
things, paying markups to private companies that employed
staff to administer bond projects, awarding contracts that
appeared to violate conflict of interest laws, and failing
to adequately ensure the quality of the work financed by
the bonds. The citizens' oversight committee that was
supposed to ensure that the LACCD spent bond proceeds
responsibly reportedly failed to issue a report to
taxpayers for eight years. SB 911 responds by requiring
local officials to annually provide basic information about
their bond expenditures, thereby allowing the public to
assess whether their money is spent appropriately by the
governments that serve them.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 5/11/11)
American Federation of State, County and Municipal
Employees
California Association of County Treasurers and Tax
Collectors
OPPOSITION : (Verified 5/11/11)
California Association of School Business Officials
AGB:nl 5/11/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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