BILL ANALYSIS                                                                                                                                                                                                    



                                                                SB 246
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        SENATE THIRD READING
        SB 246 (Fuller)
        As Amended  August 7, 2013
        Majority vote 

         SENATE VOTE  :37-0  
         
         LOCAL GOVERNMENT    9-0                                         
         
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        |Ayes:|Achadjian, Levine, Alejo, |     |                          |
        |     |Bradford, Gordon,         |     |                          |
        |     |Melendez, Mullin, Rendon, |     |                          |
        |     |Waldron                   |     |                          |
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         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 three 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  








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          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 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  
          million, 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  








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          Act of 1935, the Improvement Act of 1911, the Improvement Bond Act  
          of 1915, and the Revenue Bond Law of 1941.  

        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  








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          exceed $100 per day for each day's attendance at 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)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 notices.  

        32)Makes numerous technical and non-substantive changes. 









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         EXISTING LAW  establishes the Bighorn Mountains Water Agency  
        Consolidation Law to authorize a consolidation between the Desert  
        View Water District and the Bighorn Mountains Water agency.  

         FISCAL EFFECT  :  None

         COMMENTS  :  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), Chapter 570,  
        Statutes of 1989) merged the Bighorn Mountains Water Agency with the  
        Desert View Water District that was governed by the County Water  
        District Law.  

        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 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.  

        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."  
         








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        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 Agency 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.  

        Support arguments:  Supporters argue that this bill removes the  
        requirement that the consolidated agency operate financially as two  
        separate enterprises which negated financial efficiencies expected  
        from the consolidation and modernizes the enabling act so that it is  
        a more transparent and functional statute.  

        Opposition arguments:  None.


         Analysis Prepared by  :    Misa Yokoi-Shelton / L. GOV. / (916)  
        319-3958                                                    


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