BILL ANALYSIS Ó
SB 246
Page 1
Date of Hearing: August 14, 2013
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
K.H. "Katcho" Achadjian, Chair
SB 246 (Fuller) - As Amended: August 7, 2013
SENATE VOTE : 37-0
SUBJECT : Bighorn-Desert View Water Agency.
SUMMARY : Revises the special act governing the Bighorn-Desert
View Water Agency, and makes other changes to existing law that
governs the Bighorn-Desert View Water Agency. Specifically,
this bill :
1)Repeals the Desert View Water District-Bighorn Mountains Water
Agency Consolidation Law that required the Desert View Water
District and the Bighorn Mountains Water Agency to separately
account and use funds, and deletes cross-references to the
consolidation law from the Bighorn-Desert View Water Agency's
special act.
2)Requires the Bighorn-Desert View Water Agency (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, and declares that its
provisions must not be construed to impair any contract
entered into prior to January 1, 2014.
3)Decreases, from 3 months to 60 days, the period that any legal
action may contest, question, or deny the validity of the
Agency's bonds, improvement districts, annexations, or other
proceedings.
4)Decreases, from six to three, the number of public places that
the Agency must post specified hearing notices.
5)Makes changes to existing law that governs the Agency's power
to enter into contracts, and deletes a requirement that the
Agency must get two-thirds voter approval for specified
contracts that incur long-term debt.
6)Allows the Agency to file legal actions, pursuant to specified
statutes in the Code of Civil Procedure, to determine the
SB 246
Page 2
validity of the Agency's bonds, warrants, promissory notes,
contracts, or other evidences of indebtedness.
7)Specifies in addition to defined powers in existing law, the
Agency may do the following:
a) To take by condemnation or to lease, with or without the
privilege of purchase, or sell real and personal property
useful or necessary to produce water;
b) To construct, maintain, and operate water wells; and,
c) To enlarge any waterworks or waterworks system acquired
by the Agency.
8)Deletes the requirement in existing law that the Agency's
board shall regulate the use of recreational facilities by
ordinance and repeals the violation of those regulations as a
misdemeanor, and makes a violation of the specified
regulations an infraction, punishable by a fine not to exceed
$300.
9)Increases annual interest rate not to exceed 12%, establishes
a total aggregate amount of notes outstanding not to exceed
$5,000,000, and requires the maturity of the notes shall not
be later than five years for the Agency to issue negotiable
promissory notes.
10)Increases the annual interest rate to not exceed 12%,
pursuant to existing law, for the Agency to incur debt and
issue bonds.
11)Clarifies that the Agency's power to levy taxes, fees,
charges, assessments, and incur debt are subject to
constitutional and statutory requirements.
12)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.
13)Authorizes the Agency to issue bonds in accordance with the
Municipal Improvement Act of 1913, the Refunding Assessment
Bond Act of 1935, the Improvement Act of 1911, the Improvement
Bond Act of 1915, and the Revenue Bond Law of 1941.
SB 246
Page 3
14)Allows the Agency to sell bonds through negotiated sale or
private sale subject to specified conditions, and prohibits
bonds from being sold for less than 94% of par value.
15)Specifies the manner in which the Agency can record liens for
unpaid water service charges.
16)Clarifies that bond proceeds and surplus revenues from water
rates can be used to pay for replacement of the Agency's
works.
17)Repeals the Agency's right of eminent domain to take any
property necessary to supply the agency with water, which is
currently authorized.
18)Deletes provisions in existing law 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.
19)Requires the Agency's board to adopt a resolution specifying
the date, time, and place of its meetings and deletes
redundant provisions in existing law that relate to board
meetings.
20)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.
21)Removes the requirement that the board of directors must
include in a resolution to incur bonded indebtedness the
designation of precincts, the location of polling places, and
the names of the officers selected to conduct the election, as
specified. Deletes the seven-day timeframe following the
election to incur bonded indebtedness that the returns of the
election must be made, and the votes canvassed by the board of
directors.
22)Deletes the provision in existing law that requires the board
to adopt an ordinance to exercise specified powers related to
pensions.
23)Deletes compensation provisions in existing law for
directors, and instead, provides that directors may receive an
amount not to exceed $100 per day for each day's attendance at
SB 246
Page 4
meetings of the board, if established by an adopted ordinance
by the governing board.
24)Requires the board to appoint, define duties, and establish
compensation, by a majority vote, for an attorney, chief
engineer, general manager, and auditor. Provides each of
these positions serve at the pleasure of the board. Prohibits
a member of the board of directors from serving as any of the
positions above. Deletes existing law that authorizes the
board to appoint a treasurer and to consolidate specified
offices.
25)Requires the board of directors at the first meeting in
January in each even numbered year to choose a vice president
and secretary from among its members.
26)Requires the board to adopt an annual appropriations limit
and budget.
27)Authorizes the voters in the Agency to pass an initiative or
disapprove of an ordinance by referendum subject to specified
statutes in the Elections Code, and deletes current statutory
language governing the Agency's elections.
28)Clarifies that the Agency shall not dissolve until all
indebtedness is fully satisfied.
29)Specifies that the Agency is subject to the California Public
Records Act.
30)Updates the statutory metes-and-bounds description of the
Agency's boundaries.
31)Replaces 'bonded debt' with 'debt' in numerous places
throughout the Bighorn-Desert View Water Agency Law and
deletes references to bonds' interest coupons.
32)Makes findings and declarations relative to provisions that
impose a limitation on the public's right of access to the
meeting of public bodies or the writing of public officials
and agencies in order for the Agency to reduces costs and
staff burdens associated with posting notices of specified
hearings, while still providing adequate notice of public
hearings, it is necessary to reduce the number of public
locations in which the agency must post specified hearing
SB 246
Page 5
notices.
33)Makes numerous technical and non-substantive changes.
EXISTING LAW :
1)Establishes the Bighorn Mountains Water Agency Consolidation
Law to authorize a consolidation between the Desert View Water
District and the Bighorn Mountains Water agency.
2)Requires all funds derived from the operation of the former
county water district consolidated with the Bighorn Mountains
Water Agency to be separately accounted for and used
exclusively for the purposes of maintenance, operation,
betterments, and bond debt service, and prohibits funds
derived from the former district to be used for any other
purpose until all debt of that former district has been paid
in full or until a majority vote of the electorate of the area
served by the former district has authorized other
expenditures.
3)Establishes the Bighorn Mountains Water Agency Law and defines
its powers and duties.
FISCAL EFFECT : None
COMMENTS :
1)In 1969, SB 1175 (Coombs) established the Bighorn Mountains
Water Agency Law, a special act in the Water Code Appendix.
In 1989, the Desert View Water District-Bighorn Mountains
Water Agency Consolidation Law (AB 1819, Woodruff) merged the
Bighorn Mountains Water Agency with the Desert View Water
District that was governed by the County Water District Law.
2)This bill repeals the Desert View Water District-Bighorn
Mountains Water Agency Consolidation law and rewrites the
existing Bighorn Mountains Water Agency Law in the Water Code
Appendix to rename the law the Bighorn-Desert View Water
Agency Law to govern the Bighorn-Desert View Water Agency
(Agency). This bill repeals references from the consolidation
law and updates the governing statute.
The 1989 consolidation bill required the Agency to separately
account for the funds of the two precursor agencies. This
SB 246
Page 6
bill maintains the separate accounting of debt acquired by the
precursor agencies prior to consolidation, but no longer
requires the Agency to financially operate as separate
entities. This bill decreases, from three months to 60 days,
the amount of time public officials may initiate a validating
lawsuit in order to get the court to validate their actions,
contract, agreements, and bonds. This bill makes several
changes to the requirements of the board in existing law
including noticing requirements, compensation, and appointing
authority. This bill is sponsored by the Agency.
3)According to the author, "The current Water Agency Law is
outdated because if does not reflect important additions to
the California Constitution, such as Articles XIII A, B, C,
and D, which affect the Board of Director's authority to enact
taxes and adopt water rates. Moreover, the original Act is
not well organized, thereby reducing its usefulness as a
reference for Agency staff, public officials and the general
public. Additionally, the requirement to keep the two water
systems financially separate works against the economic
savings that consolidation was expected to bring to the
ratepayers."
4)The 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 Agency is also authorized to develop hydroelectric energy,
use falling water for electric energy, and to exercise all
powers granted in the County Water District Law. The Agency
has several improvement districts, which are geographical
subdivisions through which water districts can fund capital
improvements that benefit those specific geographic areas.
Current law allows the District to raise revenue by charging
service fees, standby charges, and benefit assessments. To
raise capital, the Agency can use general obligation bonds,
revenue bonds, and benefit assessment bonds. Existing law
also allows the Agency to borrow money with promissory notes.
This bill clarifies that the Agency's ability to raise revenue
and capital are subject to the California Constitution and
state law.
5)Support arguments : Supporters argue that this bill removes
the requirement that the consolidated agency operate
financially as two separate enterprises which negated
SB 246
Page 7
financial efficiencies expected from the consolidation and
modernizes the enabling act so that it is a more transparent
and functional statute.
Opposition arguments : None
REGISTERED SUPPORT / OPPOSITION :
Support
Bighorn-Desert View Water Agency [SPONSOR]
Association of California Water Agencies
Hi Desert Water District
Mojave Water Agency
San Bernardino County Local Agency Formation Commission
Special Districts Association
Twentynine Palms Water district
Opposition
None on file
Analysis Prepared by : Misa Yokoi-Shelton / L. GOV. / (916)
319-3958