SANTA BARBARA COUNTY GRAND JURY 1997-1998

 

JOINT POWERS AGENCIES

 

Released May 28, 1998

BACKGROUND

 

In Santa Barbara County joint powers agencies (JPAs) have been created which do everything from studying the movement of sands along the coast, to financing facilities for the movement of vehicles throughout the county. Joint powers agencies distribute books to local libraries and distribute water from northern California to faucets in many communities in the county.

 

These JPAs are public agencies whose governing boards are composed of officials from two or more jurisdictions, such as two cities or the county and one or more cities. These public agencies share the power of each board member’s jurisdiction, thus they are "joint powers agencies." These JPAs are not merely advisory to the member’s own elected governing board, but have the authority to make binding commitments for financial obligations, and many other powers, such as eminent domain.

 

The Grand Jury set out to identify the joint powers agencies that operate in Santa Barbara County, to confirm that such agencies conduct their business in conformance with Government Code requirements, and to examine the effectiveness and public accountability of a sampling of local joint power agencies. We initiated a study of those agencies described in Article 6506 of the California Government Code, generally known as joint powers agencies. According to the Government Code, all JPAs are required to name a treasurer, have a conflict of interest code, and have periodic financial audits. The Grand Jury has the authority to examine joint powers agencies in conformance with Article 925a of the California Penal Code.

 

We found it difficult to learn about the existence of JPAs in the county. We attempted to get a list of JPAs from county departments, but received information about joint power agreements between the county and various cities for mutual aid for fire, police, or medical services. The county has no central comprehensive list of JPAs to which the county is a party. By searching through the Santa Barbara County "Roster of Boards, Commissions and Standing Committees," we found one; knowledge of Grand Jury members led to four more. A list of committee assignments of each member of the Board of Supervisors led to another. This information was augmented with records provided by the Santa Barbara County Auditor-Controller, the office of the County Administrator and the office of the California Secretary of State.

 

In addition, a survey letter was sent to each of the seven incorporated cities in the county to ask about their membership in JPAs. Again, some cities did not have readily available a list of the JPAs in which they are members. When the cities responded to our survey, we found that several cities omitted some JPAs in which every city is a member, had committee reports on agendas from JPAs that were not recognized as JPAs, and listed some that had not been known to the Grand Jury. (See Attachment A)

Members of the Grand Jury conducted an extensive series of interviews with knowledgeable public officials, including:

Grand Jury members also reviewed the agreements of the Central Coast Water Authority, Santa Barbara Association of Governments, the Black Gold Cooperative Library System, Beach Erosion Authority for Control Operations and Nourishment, and Cachuma Operation and Maintenance Board. In addition we reviewed the financial records of three of these JPAs.

Legal Authorization of Joint Powers Agencies

The California legislature established a public law (Government Code 6502) that authorizes: "…two or more public agencies by agreement (to) jointly exercise

any power common to the contracting parties…."

 

In addition to the Government Code requirements on the previous page, the legislature requires that:

 

In addition, all JPAs are required to file an initial notice of formation, and to file periodic updates of organizational changes, at the office of the California Secretary of State. At least in theory, these filings would provide an opportunity for the public to determine what JPAs operate within the County of Santa Barbara. Within these auditing and disclosure requirements, JPAs can exercise significant power as autonomous public agencies.

 

Joint Powers Agencies Studied

 

  1. Santa Barbara County Association of Governments (SBCAG)

 

SBCAG is a countywide agency with representatives from each of the seven incorporated cities in the county, and the County of Santa Barbara. There had been a county agency called the Area Planning Council (APC) from 1963 until 1990. Measure D was passed

 

by county voters in 1989, approving a one-half cent sales tax to fund specific transit projects. (See Attachment B) The SBCAG was formed to take the place of the APC to implement the Measure D projects. Bonds ($48.5 million) were sold by SBCAG to fund the projects so work could begin rather than waiting to receive sales tax revenue

 

SBCAG now serves in these capacities, among others:

 

Membership in SBCAG is optional. If a city chooses not to be a member, it is entitled to funds, but does not have a vote. If a new city is incorporated in the county, that new city may choose to join SBCAG (if its governing body chooses to become a member), and could not be excluded by existing members.

 

The SBCAG board is composed of all five county supervisors, and one representative (the mayor or a council member) from each of the seven incorporated cities. To encourage more consistent attendance, each board member is paid $100 for each meeting attended. Meetings are held monthly, and in various locations around the county. In SBCAG, each board member has one vote. Some counties use a weighted vote, based on population or funding.

 

According to the joint powers agreement, SBCAG has the power to:

 

 

Revenue sources for fiscal Year 1997-98 are $49 million. SBCAG staff members are in the county retirement system, because it is a continuation of the Area Planning Council which had been a county agency. SBCAG uses the county auditor, deposits funds into the county treasury, and uses county counsel for legal advise. Employees are not covered by civil service rules; there is no union.

 

Since all five members of the Board of Supervisors are members of SBCAG, they are all informed of the activities of this JPA. However, city representatives may or may not be instructed by their city councils about how to vote on particular issues. How to report back to the council is up to each separate entity.

 

Two members of SBCAG expressed a need to have the agenda packet delivered farther in advance of the monthly meeting to allow them to become familiar with the items to be discussed at the meeting.

 

SBCAG is in compliance with the law in giving proper notice of meetings, and conducting the meetings in public. Its financial activities have been annually audited by an independent auditor. However, these independent audits have not been consistently filed with the county auditor as required by Article 6505 of the California Government Code.

 

2. Central Coast Water Authority (CCWA)

The purpose of CCWA, (as stated on the Notice of Joint Powers Agreement filed with the Secretary of State on October 21, 1991) is to "study, plan, develop, finance, acquire, design, construct, maintain, repair, manage, operate and control the facilities," either alone or in cooperation with the U.S., the State of California, or other public or private entities.

 

The "facilities" are the water supply project known as the Extension of the Coastal Branch of the State Water Project, including the treatment plant at Polonio Pass and the pipeline.

 

According to the joint powers agreement, the powers of CCWA are to:

 

 

Total CCWA revenue for Fiscal Year 1996-97 was $4,660,911. The governing board consists of one representative from each voting member agency, which must be a public entity (city or special district, with authority to issue bonds and assess taxes). Each Director on the CCWA board is appointed or selected by the governing board of the member agency. The Director need not be an elected official. For example, the Director and alternate may be an elected city council member or the public works department head, with full voting rights.

 

Members of CCWA and their voting entitlement are as follows:

 

CCWA Voting Members Board % Voting Entitlement

City of Guadalupe 1.15%

City of Santa Maria 43.19%

City of Buellton 2.21%

Santa Ynez River Conservation District

Improvement District #1 7.64%

Goleta Water District 17.20%

City of Santa Barbara 11.47%

Montecito Water District 9.50%

Carpinteria Valley Water District 7.64%

Total 100.00%

 

CCWA meetings have consistently been properly noticed and conducted in public. Its financial activities have been annually audited by an independent auditor.

 

3. Black Gold Cooperative Library System

 

The Black Gold Library System is composed of libraries in the counties of San Luis Obispo, Santa Barbara, and Ventura. The purpose is to "provide for the exercise of the common power of each of the parties" to provide public library services in compliance with the Library Services Act. As a member of the Black Gold System, a patron can check out a book in the Paso Robles library and return it to the Santa Barbara library, no matter where the patron’s home library is located. Books and library materials are shared among all cooperating libraries.

 

The members of the system are the County of Ventura, Santa Paula Union High School Public Library District, County of San Luis Obispo, and the cities of Santa Barbara, Lompoc, Santa Maria, El Paso De Robles, and Thousand Oaks.

 

According to the JPA agreement, the Black Gold Library System has authority to:

 

The System has all the "powers, prerogatives and authority necessary to plan, operate, and administer a cooperative library system, and those powers necessary to establish, improve, and extend library services." Each party agrees to accept the system-wide programs, and to cooperate in the performance and execution of these programs.

 

The System is governed by an Administrative Council, composed of the head librarian of each member agency. The Council is authorized to:

 

The Black Gold System’s annual revenue is approximately $800,000. The Administrative Council sets the member agency contributions after reviewing the proposed expenditures and anticipated revenues. Each member agency then works within its own budget to provide for its contribution to the Black Gold System. The Council appoints a director, who must file a bond of $100,000.

 

For the past three years the independent auditor for Black Gold has found a reportable condition regarding segregation of duties. Black Gold System director states: "The auditor is concerned that the accountant performs substantially all of the accounting functions." The Black Gold JPA Agreement specifies that the Treasurer shall be the System Director. The Black Gold System response is that due to the small staff, they have separated duties whenever possible. The office manager records and endorses incoming checks. The accountant deposits the checks and records the deposits. The director reviews bank statements and cancelled checks. Payment checks from Black Gold System are prepared by the accountant, which are submitted to the director, along with purchase orders, invoices, etc. The system director signs the checks.

 

This joint powers agreement specifies that general liability insurance in the amount of at least $10 million coverage must be carried. The agreement provides for the withdrawal of members and the termination of the JPA.

 

Black Gold Library System meetings have consistently been properly noticed and conducted in public. Its financial activities have been annually audited by an independent

auditor. These independent audits have been consistently filed with the Santa Barbara County Auditor as required by Article 6505 of the California Government Code.

 

4. Beach Erosion Authority for Control Operations and Nourishment (BEACON)

 

According to the records of the California Secretary of State, BEACON was formed in 1986. However, its existence was not revealed to the Grand Jury in the records provided from either the County Auditor-Controller or the County Administrator. It was discovered in the list of committee assignments for each member of the Board of Supervisors. BEACON’s purpose is to "foster greater cooperation toward the maintenance and enhancement of the beaches" from the mouth of the Santa Ynez River to Point Mugu, which is the extent of a littoral sand cell (a shoreline area of sand). The JPA Agreement states: "The maintenance of wide, sandy beaches helps to protect against costly property damage, and further benefits the entire region economically by promoting recreation and tourism."

 

According to the JPA Agreement, BEACON has the authority to:

 

Authority is limited. Neither the JPA nor a majority of the members "has the authority to impose any plan, duty, obligation, or other responsibility" on any member agency without the consent of the agency. Recommendations, plans and programs are advisory only. However, the ability to propose and participate in projects gives BEACON wider authority than those named in the limitations, and also more exposure to liability. BEACON does not have any employees but uses independent contractors. BEACON does not carry liability insurance.

 

Members consist of the counties of Santa Barbara and Ventura and the cities of Santa Barbara, Carpinteria, Ventura, Oxnard, and Port Hueneme. The governing board is composed of one designated representative and alternate from each city member agency, and two from each county. Directors and alternates must be a mayor, council person or county supervisor.

 

BEACON is funded by member assessments, grants and entitlements, and legislative appropriations. Member assessments must be approved unanimously. The budget for 1996-97 shows that each county was assessed $6,000; each large city $4800; and each

small city $2400. Funding for its operation is not specifically disclosed in the county budget. However, page D-366 of the budget has a category "Transfers to Other

Governments and Organizations." According to records, the Auditor-Controller has not received any financial audits from BEACON for the past three years.

According to a BEACON board member, one project that BEACON hopes to accomplish is to develop a master permit process regarding sand replenishment that would simplify the need to apply to multiple agencies. This could be accomplished by having prior approval from flood control agencies in both Ventura and Santa Barbara Counties. Another BEACON project is to develop an educational component to inform the public about water quality.

 

5. Cachuma Operation and Maintenance Board (COMB)

 

The purpose of COMB is to provide water to its member agencies from the Cachuma Project, which was built by the U.S. Bureau of Reclamation. The Project consists of the Bradbury Dam, which formed Lake Cachuma, the Tecolote Tunnel, the 26-mile long South Coast Conduit, four reservoirs, and related structures, all owned by the Bureau. The Bureau operates the dam and Lake Cachuma reservoir; COMB operates and maintains the distribution system.

 

The cost to build the Project was $39 million. In 1995, the balance due was $26 million. All of the costs of operation and maintenance and the construction debt are COMB’s responsibility. However, the Bureau annually establishes the water rate necessary to cover the costs of the Project. Between 26,000 and 27,000 acre feet a year (AFY) are delivered from the Project to COMB member units.

The members of COMB, their share of the water, and vote on the Board are:

Improvement District Number One 10.31% 1

 

Each member of the board currently is an elected official from the member agency. According to the JPA Agreement, a board member shall be a member of the governing board "or body of the party represented." There is a system of checks and balances in the JPA Agreement, in that the two largest water shareholders each get two votes. This prevents the holders of one vote each from prevailing in a vote. As a safeguard to prevent the two larger members from prevailing in significant commitments,

a unanimous vote of the COMB is required to take action on any of the following:

 

The COMB has the powers authorized by Government Code 6500, including these:

 

City Memberships in Joint Powers Agencies

 

The survey sent to each city defined a Joint Powers Authority as "having a governing board composed of representatives from two or more public entities." The responses are compiled in the chart in Attachment A. The responsibility of keeping the member agency informed of JPA activities by their representative is dependent on the directives of the member agency. The city council or board of the special district may or may not instruct the representative on how to vote on particular issues. The method and frequency of reporting to each member’s governing board is up to each entity.

 

Filing Financial Audits

 

All Joint Powers Agencies are required to annually file independent financial audits with the County Auditor in the county in which the JPA operates. However, not all JPAs

consistently meet that statutory requirement As shown on Attachment C, a significant number of agencies fail to comply.

 

Public Listing of Joint Powers Agencies

 

All joint powers agencies are required by law to file a Notice of Joint Powers Agreement at the time of its initial formation, and to file periodic updates of organizational changes, at the Office of the California Secretary of State. The Secretary of State does not maintain those records by categories of county, location of operation, or function. It is therefore impossible to determine directly from the state record which JPAs operate within Santa Barbara County, or what activities are conducted by JPAs. The Secretary of

State could perform a public service by maintaining records of JPAs based on county, location of operation and function. Locally, neither the County Administrator nor the

County Auditor is required by law to maintain a log of JPAs that exist in Santa Barbara County. However, both officials partially maintain such records. The records and logs that are maintained in each office are incomplete and not consistent with each other.

 

CONCLUSIONS

 

Joint Powers Agencies have the potential ability to provide public services with greater efficiency and at lower costs than their member agencies could accomplish alone. But because Joint Powers Agencies are typically governed by directors appointed by the governing body of the member entity, rather than directly elected by the voters, there is a potential for reduced public scrutiny and accountability.

 

FINDINGS

 

  1. Given the authority and powers vested in JPAs, some governing bodies do not have a clear understanding of the JPAs in which they are a member, or do not maintain a list of those JPAs.
  2.  

  3. Members of JPA governing boards do not consistently inform the public entity which they represent (city council, special district, or Board of Supervisors) of the activities of the JPA that affect them.
  4.  

  5. Not every JPA files an annual audit with the county auditor of the county or counties in which the JPA operates, as required by Government Code 6505.
  6.  

  7. There is no central place in the county to keep track of all JPAs in which the county is a member.
  8.  

  9. For three consecutive years Black Gold Library System’s independent auditor has mentioned segregation of duties regarding handling of finances. The response from Black Gold indicates that increasing staff is not feasible.

 

RECOMMENDATIONS

 

  1. Every council and board representing agencies who are members of JPAs should clarify their membership and maintain a list of those JPAs. [Finding 1]
  2.  

  3. Each city, special district, and the county should establish procedures for JPA representatives to report back to the member governing bodies. [Finding 2]

 

  1. Each JPA should comply with Government Code 6505 and file an audit with the county auditor. [Finding 3]
  2.  

  3. The County Administrator should maintain a list of all JPAs in which the county is a member. [Finding 4]
  4.  

  5. The Black Gold System Administrative Council should consider having one of the member agencies provide some financial service functions in order to adequately segregate duties. [Finding 5]

 

AFFECTED AGENCIES (Those required to respond)

All cities in Santa Barbara County [Findings 1,2,3; Recommendations 1,2,3]

Buellton City Council

Carpinteria City Council

Guadalupe City Council

Lompoc City Council

Santa Barbara City Council

Santa Maria City Council

Solvang City Council

Santa Barbara County Board of Supervisors [Findings 1,2,3; Recommendations 1,2,3]

Santa Barbara County Administrator [Finding 4, Recommendation 4]

Black Gold Library System Administrative Council [Finding 5, Recommendation 5]

SBCAG governing board [Finding 3, Recommendation 3]

CCWA governing board [Finding 3, Recommendation 3]

COMB [Finding 3, Recommendation 3]

BEACON governing board [Finding 3, Recommendation 3]

 

Measure D Funds used for highway construction by Santa Barbara County Association of Governments. Highway 101 Overpass.

 

Affected Agencies

 

We want to advise you that California Penal Code Section 933.05 requires that responses to Grand Jury Findings and Recommendations must be made in writing to the Presiding Judge of the Superior Court and the Grand Jury Foreperson within 90 days (Governing bodies) or 60 days (Department heads) of the issuance of the report

 

Therefore the Grand Jury requires that you respond to each of the Findings and Recommendations that applies to your agency.

 

Please send your response to:

Honorable Judge Frank J. Oachoa

Presiding Judge, Santa Barbara County Superior Court

1100 Anacapa Street

Santa Barbara, CA. 93121

and

Grand Jury Foreperson at the same address.

 

Responses to the Grand Jury should be submitted on a 3 ˝ inch computer disk (preferably in Word) along with the printed response.

 

ALL EXHIBITS AND ATTACHMENTS ARE IN THE PUBLISHED FINAL REPORT