BILL ANALYSIS �
SB 288
Page 1
Date of Hearing: June 15, 2011
ASSEMBLY COMMITTEE ON LOCAL GOVERNMENT
Cameron Smyth, Chair
SB 288 (Negrete McLeod) - As Amended: March 29, 2011
SENATE VOTE : 36-0
SUBJECT : Local government: independent special districts.
SUMMARY : Authorizes the governing board of an independent
special district (district) to provide, by resolution, for the
establishment of a revolving fund in an amount not to exceed
110% of one-twelfth of the district's adopted budget for that
fiscal year. Specifically, this bill :
1)Authorizes the governing board of a district to provide, by
resolution, for the establishment of a revolving fund in an
amount not to exceed 110% of 1/12 of the district's adopted
budget for that fiscal year.
2)Requires the resolution establishing the fund to make
specified designations relating to the purposes for which the
fund may be expended, the district officer with authority and
responsibility over the fund, the necessity for the fund, and
the maximum amount of the fund.
EXISTING LAW :
1)Authorizes the governing board of the district, by resolution,
to provide for the establishment of a revolving fund, in an
amount not to exceed $1,000, to be used to make change and pay
small bills directly.
2)Requires the resolution establishing the fund to make
specified designations relating to the purposes for which the
fund may be expended, the district officer with authority and
responsibility over the fund, the necessity for the fund, and
the maximum amount of the fund.
3)Authorizes the governing board of a district to at any time
increase, reduce or discontinue any revolving fund established
by its order. If the revolving fund is ordered reduced, the
officer entrusted with the fund shall immediately return to
SB 288
Page 2
the county treasurer the amount necessary to reduce the fund
as ordered by the board. If the fund is discontinued, the
officer shall immediately pay over the balance of the fund on
hand as well as all outstanding receipts to the county
treasurer.
FISCAL EFFECT : None
COMMENTS :
1)California's 3,294 special districts are separate local
governments that provide specialized services like fire,
water, irrigation, cemetery, and mosquito abatement and vector
control, in geographically defined areas. Two-thirds are
independent special districts that operate under governing
boards that are either elected by the districts' voters or are
appointed for fixed terms. The remainder of the districts
have a dependent board that is either a city council or county
board of supervisors serving in an ex officio capacity.
2)In 1976, the Legislature authorized independent special
districts to establish a $1,000 petty cash fund to pay for
routine expenditures, like utility bills (AB 2997, Duffy,
1976). This authority applied only to districts that used the
county treasury as the holding place for the districts' funds.
In 1982, the Legislature authorized public cemetery districts
to establish revolving funds in an amount not to exceed 110%
of one-twelfth of the districts' adopted budget for the fiscal
year (AB 2388, Kelley, 1982). In 1990, AB 3179 (N. Waters,
1990) granted the same authority to mosquito abatement and
vector control districts.
3)Most independent special districts are authorized to designate
their own treasury. However, some choose to utilize the
county treasurer of the principal county as the treasurer of
the district. In the event that the county treasurer serves
in this role for the district, it remains critical that the
duly elected or appointed members of the district board
maintain the ability to finance the district's continuing
operations efficiently and effectively. According to the
sponsor, the California Special Districts Association, the
current $1,000 revolving fund limit for many districts is
inadequate and inconsistent with other district principal
acts.
SB 288
Page 3
4)SB 288 creates consistency among the enabling acts of
independent special districts. The $1,000 revolving fund
limit has not been increased since 1976, and the authority for
establishing larger funds exists only for public cemetery and
mosquito abatement and vector control districts. Public
cemetery districts and mosquito abatement and vector control
special districts have used larger revolving funds for more
than 20 years. Authorizing all independent special districts
to establish larger revolving funds can help them pay their
routine expenditures more efficiently and expediently. 110%
of one-twelfth of the district's adopted budget is just over
one month's worth of expenditures.
5)Support arguments: Supporters argue that SB 288 will provide
the appropriate level of flexibility to locally governed
entities that will facilitate decisions that represent the
best interest of the district.
Opposition arguments: None at this time.
REGISTERED SUPPORT / OPPOSITION :
Support
California Special Districts Association �SPONSOR]
Opposition
None on file
Analysis Prepared by : Katie Kolitsos / L. GOV. / (916)
319-3958