HomeMy WebLinkAboutMINUTES - 09191989 - IO.10 I.O. 10
TO: Board of Supervisors ;
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FROM: INTERNAL OPERATIONS COMMITTEE —__
43AB;:
DATE: September 11, 1.989 -=
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SUBJECT: PROPOSED RESPONSE TO THE REPORT OF THE 1988-89 GRAND JURY
ENTITLED "RESERVES OF SPECIAL DISTRICTS"
Specific Request(s) or Recommendations(s) & Background & Justification
RECOMMENDATIONS:
1. Adopt the following report of our Committee as the Board of Supervisors' response to the Report of the 1988-
89 Grand Jury entitled "Reserves of Special Districts".
2. Remove this item as a referral to our Committee.
BACKGROUND:
On June lb, 1989 the 1988-89 Grand Jury approved the attached report on "Reserves of Special Districts". On
September 11, 1989 our Committee met with staff from the County Administrator's Office,Jarred Miyamoto-Mills
from the Central Sanitary District and members of the 1988-89and 1989-90 Grand Juries. We reviewed the proposed
response suggested by the County Administrator's Office and discussed the Grand Jury's recommendations with
the members of the Grand Jury, staff from the County Administrator's Office and Mr. Miyamoto-Mills from the
Central Sanitary District. At the conclusion of these discussions we formulated the following response, utilizing
a format suggested by the Grand Jury in their final report,in which the Grand Jury requested that written responses
to Grand Jury recommendations clearly specify:
A. Whether the recommendation is accepted or adopted.
B. If the recommendation is accepted, a statement as to who will be responsible for implementation and a definite
target date.
C. A delineation of constraints, if a recommendation is accepted but cannot be implemented within the calendar
year.
Continued on attachment: YES Signature:
Recgmmen tion County dministrator Recommendation of Board Committee
App I ov Other:
_Si nature(s . M ERS ANNE WRIGHT�MC PEAK
Action of B and on: September 19, 1989 Approved as Recommended x Other
Vote of Supervisors I HEREBY CERTIFY THAT THIS IS A TRUE
AND CORRECT COPY OF AN ACTION TAKEN
x Unanimous (Absent -- ) AND ENTERED ON THE MINUTES OF THE
Ayes: Noes: BOARD OF SUPERVISORS ON DATE SHOWN.
Absent: Abstain: Q
cc: County Administrator Attested)C!C®6 / /9 AW
Auditor-Controller Phil Batchelor, Clerk of the Board
County Counsel of Supervisors and County Administrator
Foreman, 1988-89 Grand Jury
Foreman, 1989-90 Grand Jury y�
Judge Wayne Westover,Grand Jury Judge By (2 (o , Deputy Clerk
clvm:eh(io-10bo)
D. The reason for not adopting a recommendation.
This and all future responses to Grand Jury recommendations coming from our Committee will follow this format
as closely as possible.
RECOMMENDATION# 1:
That autonomous special districts listed in Exhibit 1 communicate at least annually to taxpayers and
ratepayers explaining the projected use of reserve and/or surplus funds. This disclosure should be a clear
and concise communication directed to each taxpayer and ratepayer.
RESPONSE:
A. Our Committee wholeheartedly agrees with this recommendation. It is our feeling that many special districts
have enormous reserves which have not been adequately explained to the taxpayers who have contributed to these
reserves. The representative from the Central Sanitary District explained that their substantial reserves are for
long-term capital improvements. He also agreed that the Central Sanitary District needs to do a better job of
explaining the District's finances to its ratepayers.
B. Since the Board of Supervisors has no jurisdiction over these independent special districts there is little the Board
of Supervisors can do other than to concur with the Grand Jury and ask all independent special districts to comply
with the Grand Jury's recommendation.
RECOMMENDATION#2:
The County Administrator compile and maintain a complete list of all special districts within Contra Costa
County.
RESPONSE:
A. The County Administrator's Office indicated that the Local Agency Formation Commission maintains such
a directory and keeps it up to date and that this recommendation has, therefore, been complied with.
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A REPORT BY
THE 1988-89 CONTRA COSTA COUNTY GRAND JURY
-P. O. Box 1110
Martinez, CA 94553
( 415) 646-2345
RESERVES OF SPECIAL DISTRICTS
Large reserves might be perceived by some . . . as a
prudent prepayment of anticipated expenditures . . .
others might perceive them as gross overcharges.
Contra Costa Co��,,ty
RECEIVED
JUN 16 1989
0 of
COUnty ArciminlStrator
APPROVED BY THE GRAND JURY:
DATE:
/! PHILIP E. SITZMAN, SR.
GRAND JURY FOREMAN
ACCEPTED FOR FILING:
DATE:
4fA'lrlTE-X'Z WESTOVER
JUDGE OF THE SUPERIOR COURT
RESERVES OF SPECIAL DISTRICTS
SUMMY
During a review of special districts, several autonomous dis-
tricts (those not governed by the County Board of Supervisors)
were found to have what might .appear to be excessive reserves
and/or surplus funds.-
The
unds:The existence, amount and purpose of these funds may not be known
to the Districts' taxpayers and ratepayers.
The grand jury recommends that all autonomous special districts
clearly .disclose to their taxpayers and ratepayers the amounts
and projected use of reserves and/or surplus funds. Only with
this information can taxpayers and ratepayers determine if their
special district boards of - directors are prudently preparing for
future needs or are overcharging.
FINDINGS
1. In Contra Costa County numerousspecial districts such as
fire, water, sanitary, school and hospital have been formed
to provide specific services.
2. There are two types of special districts: those governed by
the County Board of Supervisors through boards or
commissions it appoints, and those governed by autonomous
boards of directors elected by the voters within each
special district. Exhibit 1 is a listing of known autono-
mous special districts.
The grand jury was unable to locate a complete. list of
autonomous special districts from any County source.
Autonomous special districts establish their own budgets,
special tax levies and service charges through their boards
of directors. Budgets for the districts governed by the
County Board of Supervisors are authorized and controlled by
the Supervisors..
3 . Some autonomous special districts have sizeable reserves
and/or surpluses. An example is a special district with
annual operating expenditures of approximately $25 million
and reserve funds totaling over $80 million.
This does not occur when the special district is governed by
the County Board of Supervisors because its policy precludes
accumulation of large reserves.
4 . No attempt has been made by any of the special districts
examined to hide the existence of reserve funds. There also
-1-
is no clear disclosure to district taxpayers and ratepayers
of the existence or purpose of reserve funds.
5. The reserves of most autonomous districts are committed for
specific purposes such as expansion or equipment replace-
ment. However, a simple action by the board of directors
can change the designated. use of reserve funds.
6. In no . case did the grand jury find any evidence of misuse of
these funds.
CONCLUSIONS
The 1988-89 Contra Costa County grand jury concludes that:
1. A proper role of the board of directors of each autonomous
district is to determine the amount and purposeof reserve
funds.
2. Taxpayers and ratepayers have no reasonable way to become
informed as to the amount, purpose and actual use of reserve
funds.
3 . Large- reserves might be perceived by some taxpayers or
ratepayers as a prudentprepayment of anticipated
expenditures., whereas others might perceive them as _gross
overcharges.
4. Taxpayers and ratepayers in. autonomous special districts
should be regularly informed of the amount and purpose of
any reserves.
RECOMMENDATIONS
The 1988-89 Contra Costa County grand jury recommends:
1. That autonomous special districts listed in Exhibit 1
communicate at least annually to taxpayers and ratepayers
explaining the projected use of reserve and/or surplus
funds. This disclosure should be a clear and concise
communication directed to each taxpayer and ratepayer.
2. The County Administrator compile and maintain a complete
list of all special districts within Contra Costa County.
COMMENTS
The grand jury found all special districts contacted to have
professional and cooperative staffs and appreciates the
substantial amount of .time they spent assisting in this investi-
gation.
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