Contra Costa County Grand Jury Not Happy With JPAs

A mission of the Nine-County Coalition is to look with an extremely jaundiced eye at all types of agencies staffed by non-elected officials.  Joint Powers Authorities (JPAs), as the Contra Costa County Civil Grand Jury says in its 2017-2018 report,  are “a flexible, easy to form, cost-effective means to carry out specific functions.”  But they are also not in voters’ radar screen.  Therefore, until we all miraculously come up with a more accountable way to deal with inter-agency, inter-city, inter-county functions (think BART or water systems), we can try to ensure that our JPAs abide by their intended purposes and observe fiscally responsible ways.  

Joint Powers Authorities

JPAs were created by the California legislature way back in the 1940s.  Cities and counties in need joint action can form JPAs for a wide range of functions, such as transportation or construction projects.  Inter-county, inter-city, and inter-agency projects have proliferated since the 1940s, and so have JPAs.  Here are a couple of examples of recently-formed Joint Powers Authorities.

In May 2018, participating public water agencies formed The Delta Conveyance Design and Construction Authority (DCA) as a Joint Powers Authority.  This JPA will be responsible for final design and construction of facilities that are part of the California plan to upgrade its water systems.  The JPA will be empowered to incur debt and acquire real and personal property.

In April 2018 The California State Association of Counties Finance Corporation (CSAC Finance Corporation) established the California Cannabis Authority (CCA) as a Joint Powers Authority to help cities and counties deal with regulations and taxes in the cannabis industry.  One objective of the CCA is to gather data on regulatory and tax compliance in order to provide detailed information to financial institutions interested in working with the cannabis industry.

We are talking about a lot of JPAs serving innumerable functions, and in some cases having the power to accumulate substantial liability for which ultimately taxpayers are responsible.  The Contra Costa County Civil Grand Jury Report Joint Powers Authorities:  Transparency and Accountability lists the findings and provides recommendations.

Findings

The Contra Costa Grand Jury focused its study on Financial JPAs, and addressed transparency and accountability.  Here is a brief summary of the findings.

*  Certain JPAs with a single controlling entity, such as a city council, can avoid legal debt limits and provide limited disclosure to taxpayers.

*  In Contra Costa County there are 12 JPAs created by Redevelopment Agencies that no longer exist, and these JPAs are also attached to the new Successor Agencies.  Thus these JPAs can take on new debt while still servicing the debt incurred under the now defunct Redevelopment Agencies.

*  Cities that created the 12 JPAs referred to above, do not provide JPA-specific information, making it difficult for voters and other interested residents to evaluate JPA performance.

*   The Contra Costs County Auditor maintains  information only on JPAs in which the County is a member, and nothing on JPAs in which the county is not a member.

*   LAFCOs (Local Agency Formation Commission) are not responsible for oversight of JPAs.  They act only as a repository of information that JPAs voluntarily choose to file.

Recommendations

Grand Jury reports explain issues, enumerate findings, offer recommendations, and ask for responses from those the Grand Jury deems responsible for the difficulties described in the reports.  Grand Juries are not responsible for directly implementing changes. 

In this report, the Grand Jury makes several specific recommendations, requesting evidence that JPAs are complying with California codes governing JPAs (Gov Codes Sections 6505), suggesting that the Auditor-Controller review JPAs especially in regard to their connection with Redevelopment Agencies and Successor Agencies, indicating that the Auditor-Controller should post on its website financial and organizational data received from JPAs, and indicating that cities with JPAs should communicate JPA debt decisions and audit reports to the public.

Such recommendations are just that.  However, they are useful in raising public awareness and hopefully eliciting corrective action.

                                                                  A sample of Bay Area JPAs

                                                                 A sample of Bay Area JPAs