City of San Juan Capistrano Agenda Memorandum

Transcription

1 City of San Juan Capistrano Agenda Memorandum 3/1/ TO: FROM: Members of the City Council Mayor Patterson DATE: March 1, 2016 SUBJECT: Consideration of a Letter of Support for Assembly Bill (AB Taxpayer Transparency and Accountability) -Assemblyman Bill Brough RECOMMENDATION : By motion, authorize the Mayor to execute a letter expressing support for Assembly Bill (AB Taxpayer Transparency and Accountability) -Assemblyman Bill Brough. SITUATION: Assemblyman Bill Brough introduced AB 1666 (Attachment 1) which would provide oversight and transparency of Mello-Roos Community Facilities Districts (CFD) taxes imposed on property owners and would hold agencies accountable to properly collect, expend and report on these funds. AB 1666 would require CFD issuers to make fiscal information available to the CFD taxpayers online after each fiscal year beginning July 1, Attachment 1 - AB Information Attachment 2 - AB Fact Sheet Attachment 2 - Draft Letter of Support

2 /04/15 02:37PM RN PAGE I An act to add Section to the Government Code, relating to local government. --..> H.. "' "'... ATTACHMENT 1

3 /04/15 02:37PM RN PAGE 2 THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section is added to the Government Code, to read: On or before July , and each year thereafter, the legislative body shall post all of the following information on its Internet Web site: (a) A copy of any audit report created pursuant to Section (b) The amount of debt incurred by the original issuance of bonded indebtedness. (c) The total amount of special taxes collected by the district. (d) The amount of other moneys collected for the year and their source, including - = = -. interest earned. (e) The amount of moneys expended for the year, including a summary of the expenses that includes, but is not limited to, the following: (1) Facilities, including property. (2) Services. (3) The costs ofbonded indebtedness. ( 4) The costs of collecting the special tax under Section (5) Other administrative and overhead costs. (f) A list of projects currently being funded by the district, and the amount the district has committed for each project. The list shall include the name and location of each project. (g) A list of the projects that may be funded by the district but that have not yet commenced and any amount committed by the district for those projects. The list shall include the name and location of each project if it is known.

4 /04/15 02:37PM RN PAGE 3 (h) For moneys expended for facilities, including property, an identification of the categories of each type of facility funded with amounts expended in each category, including the total percentage of the cost of each type of facility that was funded with bond proceeds or special taxes. (i) For moneys expended for services, an identification of the categories of each type of service funded with amounts expended in each category, including the total percentage of the cost of each type of service that was funded with bond proceeds or special taxes. (j) For moneys expended for other administrative costs, an identification of each of these costs. (k) The total amount of special taxes collected in excess of the amount needed to pay the bonded indebtedness, bad debt contingencies, interest, and fees associated with the district, if any. (!)The date on which the bonded indebtedness will mature. (m) The date on which the imposition of any special tax will end, if any is specified. SEC. 2. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because a local agency or school district has the authority to levy service charges, fees, or assessments sufficient to pay for the program or level of service mandated by this act, within the meaning of Section of the Government Code

5 AB 1666: Taxpayer Transparency & Accountability Assemblyman Bill Brough BACKGROUND Mello-Roos is a form of financing that can be used by cities, counties, and special districts (such as school districts). Mello-Roos Community Facilities Districts (CFDs) raise money through special taxes approved by 2/3rds of the voters within the district. A CFD is created by a sponsoring local government agency to finance major improvements and services within the district which might include schools, roads, libraries, police and fire protection services, or ambulance services. The taxes are secured by a continuing lien and are levied annually against property within the district. The proposed district will include all properties that will benefit from the improvements to be constructed or the services to be provided.' But there are no mechanisms in place to ensure the taxes collected are properly spent. An Orange County Grand Jury Report (June 2015) was issued titled Mello-Roos: Perpetual Debt Accumulation and Tax Assessment Obligation 2. The grand jury found that many documents and reports about the tax districts "use general, vague language that does not meet the requirements and intent." PURPOSE OF THE BILL There is little oversight of CFD's revenue, expenditures, and debt management by the public. CFD funding and usage is not readily transparent and therefore not generally understood and its consequences are not appreciated by the general public. The problem is compounded by a lack of information available to the public on how CFD funds are being used. Many CFD formation documents and reports use general, vague language that does not meet the requirements and intent of the Mello-Roos Community Facilities Act of WHAT THE BILL DOES This bill provides oversight and transparency on taxes imposed on property owners and holds agencies accountable to properly collecting, expending and reporting on those funds. AB 1666 requires CFD's to make fiscal information as delineated in California Government Code , available to the CFD taxpayers prominently online after each fiscal year, beginning July 1, Information required in the report will include: Original maximum bond amount. Amount collected annually Amount expensed annually Specific projects to be constructed and funded and the amount committed from the CFD Specified list of projects that may be funded by the CFD Amount collected in excess of what is needed to pay the bond payments, bad debt contingendes, interest, and fees associated with the CFD Date the CFD will be paid off Date the tax will be ended How the excess funds, including the required reserve will be disbursed once the CFD and tax are ended STAFF CONTACT Christina Hulick Christina.I-Julick@asm.ca.gov 1 i fo rn iataxdata.com/pd f/mello-roos2.ru!f 2 ury.org/pd fs/ GJ reportl lello -Roos Website.pdf Government ode ATTACHMENT 2

6 March 1, 2016 William P. Brough California State Assembly State Capitol Room 2174 Sacramento, CA Subject: AB 1666 (Brough) Taxpayer Transparency and Accountability- SUPPORT Dear Assemblymember Brough, The City of San Juan Capistrano is pleased to SUPPORT your AB For the purpose of accountability and transparency, this bill would require Mello-Roos Community Facilities Districts to make fiscal information available to the CFD taxpayers online after each fiscal year. There is little oversight of CFDs revenue, expenditures, and debt management by the public. CFD funding and usage is not readily transparent and therefore not generally understood and its consequences are not appreciated by the general public. An Orange County Grand Jury report in 2015 identified that many CFD formation documents and reports use general, vague language that does not meet the requirements and intent of the Mello-Roos Community Facilities Act of The problem is compounded by a lack of information available to the public on how CFD funds are being used. The requirement established by AB 1666 holds agencies accountable for properly collecting, expending and reporting on those funds. For these reasons, we SUPPORT your AB Sincerely, Pam Patterson, Esq. Mayor Cc: Assembly Committee on Local Government Assemblymember Brian Maienschein, Chair Assemblymember Lorena Gonzalez, Vice-Chair ATTACHMENT 3