BILL ANALYSIS
AB 1757
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Date of Hearing: April 28, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1757 (Monning) - As Amended: April 6, 2010
Policy Committee: Veterans
AffairVote: 7-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires the California Department of Veterans Affairs
(DVA) to design and develop the Central Coast Veterans Cemetery
at Fort Ord (Monterey County), upon appropriation of funds by
the Legislature. Specifically, this bill:
1)Expands the eligible uses of an endowment fund-previously
established for purposes of generating income to cover the
annual operations and maintenance costs of the proposed
cemetery-to also cover the costs of project design and
development of all documents necessary for construction.
2)Requires the State Controller, upon appropriation by the
Legislature, to transfer sufficient moneys from the cemetery
Endowment Fund to the cemetery Operations Fund for each phase
of the cemetery design and development. Transfers are to be
made only when sufficient funds exist to accomplish each
phase.
3)Authorizes DVA, upon approval certification of a grant award
for the cemetery development from the federal Department of
Veterans Affairs, to proceed with construction and equipping
of the cemetery.
4)Requires federal grant funds received for cemetery development
to reimburse the Endowment Fund for transfers made from the
Operations Fund.
FISCAL EFFECT
The DVA's current cost estimate to complete preliminary plans
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and working drawings, using endowment funds, is about $800,000.
Because revenue sources for endowment funding may include the
General Fund, by expanding the eligible uses of the endowment
fund, this bill creates General Fund pressure. Any costs to the
endowment fund for design activities would subsequently be
reimbursed by the federal grant, which would be awarded prior to
the start of construction.
COMMENTS
1)Background . In 1991, Fort Ord was announced for closure by
the U.S. Base Realignment Commission. Prior to its closure,
the Fort Ord Reuse Authority set aside 204 acres for
development of a Central Coast Veterans Cemetery. Attempts to
develop a national veterans cemetery at the site have been
unsuccessful because the site lies within 75 miles of the San
Joaquin Valley National Cemetery in Gustine.
As an alternative, local agencies are seeking establishment of
a state veterans cemetery, whereby the federal government
funds 100% of development costs and the state is responsible
for ongoing operations and maintenance costs-estimated at
about $500,000 annually. (The federal funds are typically not
received until project construction bids have been submitted.
The federal grant is sufficient to provide reimbursement for
all pre-construction costs.) In order to relieve the state
General Fund of the operations and maintenance burden, AB 3055
(Laird)/Chapter 291 of 2006, established an Endowment Fund for
the receipt of donations of cash or other gifts to be used for
this purpose. Moneys received in the fund were to first be
invested with the goal of achieving ongoing earnings to cover
annual oversight and maintenance costs. Upon determination
that the Endowment Fund has adequate principal to annually
yield sufficient investment earnings to cover operating costs
of a new veterans' cemetery for 10 years, the DVA is required
to submit an application to the federal government for
development of the cemetery. According to the State
Controller's Office, no moneys have yet been deposited into
the Endowment Fund.
2)Purpose . The author is seeking to jump-start the cemetery
project by allowing the endowment fund to front the costs of
project design. According to staff at the DVA, though the
endowment fund currently has no balance, local interests have
identified sufficient resources that could be deposited into
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the endowment fund to pay for the design costs, which, as
mentioned above, would be reimbursed following receipt of
federal grant monies.
3)Recommendation . Section 5 of the bill should be amended to
clarify (a) the allowable uses of the endowment fund and (b)
that upon completion of project design, advertisement for
construction bids shall not proceed until it is determined
that the endowment fund has sufficient principal to adequately
cover expected operations and maintenance costs.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081