BILL ANALYSIS Ó
SENATE GOVERNANCE & FINANCE COMMITTEE
Senator Lois Wolk, Chair
BILL NO: SB 246 HEARING: 4/17/13
AUTHOR: Fuller FISCAL: No
VERSION: 4/4/13 TAX LEVY: No
CONSULTANT: Weinberger
BIGHORN-DESERT VIEW WATER AGENCY
[REVISED]
Repeals and amends numerous state laws governing the
Bighorn-Desert View Water Agency.
Background and Existing Law
The Legislature created the Bighorn Mountains Water Agency
as a special act special district governed by the
uncodified "Bighorn Mountains Water Agency Law" (SB 1175,
Coombs, 1969). To allow the Agency to merge with the
Desert View Water District, which was governed by the
County Water District Law, the Legislature enacted the
Desert View Water District-Bighorn Mountains Water Agency
Consolidation Law (AB 1819, Woodruff, 1989). The merged
Bighorn-Desert View Water Agency provides retail water
service to residents within a 45-square mile area
encompassing the San Bernardino County communities of
Flamingo Heights, Landers, and Johnson Valley.
The 1989 consolidation bill required the Bighorn-Desert
View Water Agency to "separately account" for specified
funds of the two precursor agencies. After two decades
operating as a merged district, Bighorn-Desert View
officials find this requirement for segregated accounting
to be unnecessary and burdensome. They want the
Legislature to repeal the entire Desert View Water
District-Bighorn Mountains Water Agency Consolidation Law
and amend the Bighorn Mountains Water Agency Law to make it
a more modern, transparent, and functional statute.
Proposed Law
Senate Bill 246 repeals the Desert View Water
District-Bighorn Mountains Water Agency Consolidation Law
SB 246 -- 4/4/13 -- Page 2
and deletes cross-references to the law from the
Bighorn-Desert View Water Agency's special act.
SB 246 requires the Agency to separately account for and
use funds derived from the operation of the Desert View
Water District and the Bighorn Mountains Water Agency for
the purpose of bond debt service for each of the former
systems. The bill declares that its provisions must not be
construed to impair any contract
entered into prior to January 1, 2014.
SB 246 reduces, from 3 months to 30 days, the period during
which legal actions can be initiated to contest, question,
or deny the validity of the Agency's bonds, improvement
districts, annexations, or other proceedings. SB 246
allows the Agency to file legal actions, pursuant to
specified statutes in the Code of Civil Procedure, to
determine the validity of the Agency's bonds, warrants,
promissory notes, contracts, or other evidences of
indebtedness.
SB 246 deletes a 50-year limit on the length of the
Agency's contracts for selling hydroelectric energy or
selling the right to use falling water for electric energy.
The bill also deletes a requirement that the Agency only
sell hydroelectric energy at wholesale to public agencies.
SB 246 reduces, from 6 to 3, the number of public places in
which the Agency must post specified hearing notices.
SB 246 deletes current statutory language governing
compensation for the Agency's board of directors. The bill
requires the Agency's board members to receive compensation
for attending board meetings that does not exceed the
maximum amount authorized by specified statutes that govern
compensation for water districts' directors.
SB 246 deletes current statutory language relating to
vacancies on the Agency's board of directors and specifies
that the Agency must fill vacancies on its board pursuant
to specified statutes in the Government Code.
SB 246 reorganizes current statutory language allowing the
Agency's board to appoint, define the duties of, and
provide compensation for specified offices. The bill
prohibits the board from appointing a sitting member of the
SB 246 -- 4/4/13 -- Page 3
board to one of those offices. The bill deletes statutory
language authorizing the board to appoint a treasurer and
to consolidate specified offices.
SB 246 requires the Agency's board to adopt a resolution
specifying the date, time, and place of its meetings and
deletes conflicting and redundant statutory language
relating to board meetings.
SB 246 specifies that the Agency's board can act by minute
order and details specific notice, posting, and publication
procedures that the board must follow to adopt an
ordinance.
SB 246 deletes current statutory language governing the
Agency's elections and allows the Agency's voter to pass an
initiative or disapprove of an ordinance by referendum
subject to specified statutes in the Elections Code.
SB 246 specifies that the Agency's powers include the power
to:
Construct, maintain, and operate water wells.
Construct, maintain, and operate property useful or
necessary to produce water.
Enlarge any waterworks or waterworks system
acquired by the Agency.
SB 246 deletes a requirement that the Agency's board
regulate specified recreational facilities' use by adopting
an ordinance. The bill repeals language defining a
violation of those regulations as a misdemeanor. Instead,
SB 246 makes a violation of the specified regulations an
infraction, punishable by a fine of $300 or less.
SB 246 specifies that the Agency's board, to restrict the
use of water during a drought or water shortage, must
comply with specified statutes in the Water Code governing
water shortage emergencies. The bill deletes language
defining a violation of specified water restrictions as a
misdemeanor and deletes other related statutory language.
SB 246 deletes statutory language requiring the board to
adopt an ordinance to exercise specified powers related to
pensions.
SB 246 amends the current statute governing the Agency's
SB 246 -- 4/4/13 -- Page 4
power to enter into contracts. The bill deletes a
requirement that the Agency must get 2/3-voter approval for
specified contracts that incur long-term debt.
SB 246 deletes current statutory language allowing the
Agency to incur debt, issue bonds and promissory notes, and
impose assessments. The bill authorizes the Agency to:
Borrow money, incur indebtedness, and issue bonds
or other evidences of indebtedness at an annual
interest rate that must not exceed 12%, pursuant to
state law.
Refund or retire any indebtedness or lien against
the agency or its property.
Issue negotiable promissory notes that are general
obligations of the Agency payable from revenues and
taxes in the same manner as the Agency's bonds and
subject to the same 12% annual interest rate limit.
Cause taxes to be levied to pay the Agency's
obligations, subject to constitutional and statutory
requirements.
To issue improvement bonds in accordance with and
pursuant to the:
o Improvement Act of 1911
o Improvement Bond Act of 1915
o Municipal Improvement Act of 1913
o Refunding Assessment Bond Act of 1935
o Revenue Bond Law of 1941
SB 246 specifies that the maximum allowable annual interest
rate on debt issued by the Agency is 12%, pursuant to
specified statutes in the Government Code.
SB 246 allows the Agency to sell bonds through negotiated
sale or private sale subject to specified conditions. The
bill prohibits bonds from being sold for less than 94% of
par value.
SB 246 replaces the term "bonded debt" with the term "debt"
in numerous places throughout the Bighorn-Desert View Water
Agency Law and deletes outdated references to bonds'
interest coupons.
SB 246 specifies the manner in which the Agency can record
liens for unpaid water service charges.
SB 246 clarifies that bond proceeds and surplus revenues
SB 246 -- 4/4/13 -- Page 5
from water rates can be used to pay for replacement of the
Agency's works.
SB 246 renames the special act governing the Bighorn-Desert
View Water Agency as the "Bighorn-Desert View Water Agency
Law." Throughout the Law, SB 246 replaces the name
"Bighorn Mountains Water Agency" with "Bighorn-Desert View
Water Agency."
SB 246 updates the statutory metes-and-bounds description
of the Bighorn-Desert View Water Agency's boundaries.
The bill deletes statutory language relating to a potential
future consolidation of the Bighorn Mountains Water Agency
with the Desert View Water Agency.
SB 246 makes numerous technical, non-substantive amendments
to the statutes governing the Bighorn-Desert View Water
Agency to conform the statutes to other changes made by the
bill and to modernize the statutory language.
State Revenue Impact
No estimate.
Comments
1. Purpose of the bill . The statutes that govern the
Bighorn-Desert View Water Agency are outdated,
disorganized, and difficult to use. Provisions of the
Agency's special act have been rendered obsolete by changes
that Propositions 13 and 218 made to the State
Constitution. Although the District maintains separate
accounting of pre-consolidation debt, it does not operate
as two separate enterprise districts, as may be required
under its consolidation statute. The amendments SB 246
makes to the Agency's governing statutes will eliminate
legal uncertainties, reorganizes the statutes to make them
more transparent, modernize the language governing some of
the Agency's powers, and make the statutes easier to use.
2. Validations . Public officials can file validating
lawsuits, asking the courts to validate their actions,
contracts, agreements, and bonds. Successful validation
SB 246 -- 4/4/13 -- Page 6
suits reassure private investors and public agencies that
their decisions are reliable. Generally, the Code of Civil
Procedure allows public officials to initiate a validation
suit within 60 days of taking the action to be validated.
SB 246 reduces, from 3 months to 30 days, the amount of
time during which members of the public can initiate a
legal challenge against some of the Agency's actions. To
make the deadline for legal challenges consistent with the
Code of Civil Procedure's deadline for validation suits,
the Committee may wish to consider amending SB 246 to give
individuals up to 60 days to initiate a legal challenge to
specified Agency actions.
3. Electricity contracts . SB 246 deletes a 50-year limit
on the length of the Agency's hydroelectric contracts and
deletes a requirement that the Agency only sell
hydroelectric energy at wholesale to public agencies.
These deletions may raise questions about the Agency's
ability to enter into long-term retail contracts for
hydroelectricity. To eliminate uncertainty, the Committee
may wish to consider amending SB 246 to restore the
restrictions that current law places on the Agency's
hydroelectric contracts.
4. Findings and declarations . Proposition 59 (2004)
requires that new statutes which limit public access to
meetings of public bodies be adopted with findings
demonstrating the interest protected by the limitation and
the need for protecting that interest. Because SB 246
reduces the number of public locations in which the Agency
must post notices of some hearings, it could be interpreted
as limiting access to public meetings. The Committee may
wish to consider amending SB 246 to include findings and
declarations that comply with Proposition 59's
requirements.
Support and Opposition (4/11/13)
Support : Bighorn-Desert View Water Agency.
Opposition : Unknown.