BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 813|
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THIRD READING
Bill No: SB 813
Author: Kehoe (D)
Amended: 5/12/09
Vote: 21
SENATE LOCAL GOVERNMENT COMMITTEE : 4-0, 5/6/09
AYES: Wiggins, Cox, Kehoe, Wolk
NO VOTE RECORDED: Aanestad
SUBJECT : Local agencies: redevelopment: annual report
SOURCE : Author
DIGEST : This bill extends the deadline for a legislative
body to review its redevelopment agencys annual report from
21 days to 30 days. This bill requires local officials to
report an audit response to the grand jury, highlighting
how they will respond if an annual audit of the
redevelopment agency uncovers major violations.
ANALYSIS : Every redevelopment agency must give its
legislative body, the city council or county board of
supervisors an annual report within six months of the end
of the fiscal year. This annual report must contain eight
types of information, including an independent financial
audit report.
A certified public accountant or public accountant must
conduct the independent financial audit report following
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the federal Government Accounting Standards and the State
Controller's audit guidelines. The audit must also report
on "the agency's compliance with laws, regulations, and
administrative requirements." If the annual report
identifies any of nine defined major audit violations, the
agency must tell its legislative body. The legislative
body has 21 days to review the annual report and take any
appropriate action.
This bill extends the deadline for a legislative body to
review its redevelopment agency's annual report from 21
days to 30 days. This bill requires the legislative body
to adopt a written response that indicates what action, if
any, the agency intends to take to correct the major audit
violation. The bill requires the legislative body to send
a copy of its written response to the grand jury
Comments
Redevelopment agencies also send copies of their annual
reports to the State Controller's Office (SCO) which
compiles and publishes the data. The SCO must compile a
list of the redevelopment agencies that reported major
audit violations. In 2006-07, redevelopment officials
reported 62 major audit violations. The SCO must then
determine if the agencies corrected their major audit
violations. If not, the SCO sends the list to the Attorney
General and tells local officials about the referral.
State law spells out the procedures for the Attorney
General to sue an agency for failing to correct a major
audit violation.
Although the Attorney General has never sued a
redevelopment agency for failing to correct a major audit
violation, some observers believe that more local oversight
can avoid future lawsuits.
City councils and county boards of supervisors usually
govern their own redevelopment agencies. Less than five
percent of the 425 redevelopment agencies have a governing
body that is different than the city council or county
board of supervisors. Despite the legal distinction
between redevelopment agencies and their underlying cities
and counties, there is little political distance because
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most of the time the same individuals govern both
institutions. When a redevelopment agency tells its
legislative body about a major audit violation, it's
usually talking to itself. Although the State Controller
and the Attorney General make and check the lists of
agencies with major audit violations, no one at the local
level regularly pays attention to this annual
self-examination. By requiring cities and counties to
share their audit responses with the grand jury, this bill
increases local dialogue about redevelopment problems and
possible solutions before state officials get involved.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 5/12/09)
California Rural Legal Assistance Foundation
Western Center on Law and Poverty
OPPOSITION : (Verified 5/12/09)
California Redevelopment Association
City of Palm Desert
AGB:do 5/13/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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