BILL ANALYSIS �
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THIRD READING
Bill No: AB 1235
Author: Gordon (D)
Amended: 9/6/13 in Senate
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 4-2, 6/26/13
AYES: Wolk, Beall, DeSaulnier, Hernandez
NOES: Knight, Emmerson
NO VOTE RECORDED: Liu
SENATE APPROPRIATIONS COMMITTEE : 5-2, 8/30/13
AYES: De Le�n, Hill, Lara, Padilla, Steinberg
NOES: Walters, Gaines
ASSEMBLY FLOOR : 56-19, 5/30/13 - See last page for vote
SUBJECT : Local agencies: financial management training
SOURCE : Author
DIGEST : This bill requires a local agency official, in
service on or after January 1, 2014, to receive training in
financial management at least once per term, if the local agency
provides any type of compensation or reimbursement to a member
of its legislative body, as specified. This bill requires the
State Treasurer and the State Controller to review the training
curricula for sufficiency and accuracy, and requires a local
agency to maintain records that demonstrate satisfaction of the
training requirement for its officials.
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AB 1235
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Senate Floor Amendments of 9/6/13 clarify the process for
establishing content of required financial management training.
ANALYSIS : The California Constitution, and state law,
including the Ralph M. Brown Act and the Political Reform Act,
establishes standards for the operations of the legislative
bodies of local agencies. The Ralph M. Brown Act requires that
legislative bodies of local agencies meet, deliberate, and vote
in open session, with specified exceptions. The Political
Reform Act prohibits local officials from participating in
decisions which affect their material interests and establishes
disclosure requirements.
In 2005, the Legislature passed AB 1234 (Salinas, Chapter 700,
Statutes of 2005), requiring members of local agencies'
legislative bodies to participate in ethics training, if those
agencies offer compensation or expense reimbursement to their
board members.
This bill requires members of local agencies' legislative bodies
in service as of January 1, 2014, or thereafter, to participate
annually in financial management training, if those agencies
offer compensation or expense reimbursement to their board
members. Exempts local officials whose term expires before
January 1, 2015. This bill defines financial management
training, as including training on laws and best practices
relating to:
Revenue sources;
Debt instruments;
Budget monitoring;
Financial policies;
Financial reporting, including audit requirements;
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Long-term financial planning;
Cash management and investments;
Capital financing, and
Debt management.
This bill requires the State Treasurer and the State Controller
to work together in consultation with state agencies,
associations and outside experts, to develop standardized
criteria to meet the financial management training requirements
of this bill. Requires any curricula developed on financial
management training to meet the criteria developed through that
process.
This bill requires local agencies that require financial
management training to maintain, on file for five years, and
subject to public disclosure, records indicating the local
officials who received training, the dates, and providers of
that training.
This bill declares financial management training to be a matter
of statewide concern, and as such, the requirement of this bill
applies to charter cities and charter counties.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee
Unknown reimbursable state-mandated costs, potentially
exceeding $50,000, related to certain administrative
requirements specified in the bill (General Fund). The
mandate is not expected to apply to the provision of financial
management training, but certain other eligible expenses
incurred by local entities would be subject to
state-reimbursement. Reimbursement will be available for 44
general law counties and 610 special districts that are
subject to the tax and spend provisions of the California
Constitution and are required by state law to provide
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compensation.
Minor costs to the State Treasurer's office and the State
Controller's office to review financial management training
curricula developed by local agencies (General Fund). Since
courses are currently available, it is unlikely that many
local agencies will develop their own curricula.
SUPPORT : (Verified 9/9/13)
California Special District Association
OPPOSITION : (Verified 9/9/13)
Association of California Water Agencies
Desert Water Agency, El Dorado Irrigation District
League of California Cities
Newhall County Water District
Orchard Dale Water District
Rowland Water District
ARGUMENTS IN SUPPORT : The author's office states that, this
bill ensures that local officials receive training in general
financial management principles and financial management laws
relevant to their public service, once per term of office. For
all the oversight and audit restrictions placed on local
agencies to protect the taxpayer, there lacks what is often the
most effective form of protection - prevention. Basic financial
education and training may not prevent deliberate fraud, but it
can help against any uninformed and irresponsible management of
public funds. Several of the state associations that represent
these local officials and agencies offer extensive training
courses, including various courses in financial training. While
these courses are to the obvious benefit of their members, these
associations and their partners (Institute for Local Government,
CSAC Institute) cannot make this coursework mandatory. And yet,
those who choose not to engage in this type of continuing
education may actually be the ones who would benefit the most
from it. This bill provides for greater training of local
officials, to help ensure that they have the information needed
to make responsible financial management decisions for their
agencies and for the California taxpayer.
ARGUMENTS IN OPPOSITION : The League of California Cities
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(League) writes in opposition, "One of the fundamental roles of
the League, an organization that is 115 years old, is to offer
continuous opportunities for education for city officials. Just
this past January, 440 newly elected council members gathered in
Sacramento for an annual three-day training that included a 2.5
hour workshop titled: "Financial Responsibilities, City
Revenues Workshop." The League also hosts many conferences and
educational seminars each year. Financial topics are included
in most if not all of them because our members take their
responsibilities very seriously. The League also has long
supported the development and maintenance of a website that is
widely recognized as the best source of information on city
finance?.In short, we do not believe that it is necessary or
appropriate for the state to impose uniform, state-supervised
financial training requirements on cities."
ASSEMBLY FLOOR : 56-19, 5/30/13
AYES: Achadjian, Alejo, Ammiano, Atkins, Bloom, Blumenfield,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Chesbro, Cooley, Daly, Dickinson,
Eggman, Fong, Fox, Frazier, Garcia, Gatto, Gomez, Gonzalez,
Gordon, Gray, Hagman, Hall, Roger Hern�ndez, Jones,
Jones-Sawyer, Levine, Lowenthal, Maienschein, Medina,
Mitchell, Mullin, Muratsuchi, Nazarian, Pan, Perea, V. Manuel
P�rez, Quirk, Quirk-Silva, Salas, Skinner, Stone, Ting, Weber,
Wieckowski, Williams, Yamada, John A. P�rez
NOES: Allen, Bigelow, Ch�vez, Conway, Dahle, Donnelly, Beth
Gaines, Gorell, Grove, Harkey, Linder, Logue, Mansoor,
Melendez, Morrell, Nestande, Patterson, Wagner, Wilk
NO VOTE RECORDED: Holden, Olsen, Rendon, Waldron, Vacancy
AB:d:n 9/9/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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