City Manager’s Office September 11, 2018 Mario Gutierrez, Foreperson Contra Costa County Civil Grand Jury

“In the Direct JPA model, each member delegates to the JPA a function that each member has the legal authority to provide. This shared approach results in cost savings and better efficiency on behalf of taxpayers.” Response: The City of El Cerrito agrees with this finding.

“The Circular JPAs with a single controlling entity, such as a city council, have the potential to avoid legal debt limits and provide limited disclosures to taxpayer.” Response: The City of El Cerrito disagrees with this finding. A Joint Powers Authority (JPA) is a separate legal public entity as defined by the Government Code. As such, JPAs have the ability to incur their own debt separate from the municipality. The “single controlling entity”, even if made up of the same members as a City Council, still serves in a separate legal role. All meetings of JPAs are publicly noticed and comply with the Brown Act, and disclosures and audits of JPAs are made in accordance with state law.

“In Contra Costa County, there are 12 Circular JPAs created by cities with RDAs that no longer exist. These JPAs may no longer be valid because each is a member of another Financial JPA which may take on new debt without the prohibition (Gov. Codes Sections 6505 3416/34170 et seq,) placed on Successor Agencies.” Response: The City of El Cerrito disagrees with this finding. To the extent that this finding suggests that all JPAs between a city and successor agency are invalid, we direct you to the following provisions of the redevelopment dissolution laws. Health and Safety Code section 34173(g) expressly states that a “successor agency is a separate public entity from the public agency that provides for its governance and the two entities shall not merge.” Health and Safety Code section 34178(b)(3) expressly preserved the existence of joint exercise of powers agreements “in which the redevelopment agency is a member CITY HALL 10890 San Pablo Avenue, El Cerrito, CA 94530 Telephone (510) 215-4305 Fax (510) 215-4379 http://www.el-cerrito.org 1 CITY MANAGER’S OFFICE of the joint powers authority” and stated that such agreements “may bind the successor agency” (with some limitations not relevant here). Further, the City also does not know the structure of each agreement referred to in this report and therefore could not provide an opinion on their validity.

“Cities that have created the 12 Financial JPAs do not provide JPA-specific financial information in their budget document. As a result, the public may have difficulty evaluating JPA’s financial performance.” Response: The City of El Cerrito disagrees with this finding. The City provides, and has provided for years, information on the El Cerrito Public Financing Authority in its biennial budget document and in its Comprehensive Annual Financial Report (CAFR), each of which are presented in a public meeting and are available to the public in both written and online formats. The City does not have information on whether or not other cities provide similar information.