Little Hoover Commission Recommendations

We are committed to carrying out the recommendation of the California Little Hoover Commission.

2017 Recommendations for Local Bond Oversight, Little Hoover Commission Report 236. In this update, the Commission found progress in improving bond oversight, but that progress has not been consistent for all statewide bond measures. The Commission sees an opportunity for improving bond oversight by establishing a consistent framework of accountability for all statewide bonds. It has been nearly eight years since the Commission noted the shortcomings in finding online information on bond expenditures and yet this challenge remains. The Commission looks forward to the implementation of SB 1029, which provides a much needed opportunity to gain greater clarity on state and local bond expenditures.

Recommendation 1: The Governor and the Legislature should adopt a consistent system to improve transparency and oversight of all statewide bonds, particularly the 2008 high-speed rail and the 2016 school facility construction bonds, which currently lack such requirements, as well as all future statewide bond measures. This oversight system should link bond expenditures to results that can be seen and measured by the public in an easy-to-understand online format.

Recommendation 2: The Governor and Legislature should ensure adequate resources are available for the California Debt Limit Allocation Committee’s implementation of SB 1029.

Recommendation 3: The California Debt and Investment Advisory Committee is encouraged to expedite the development of training materials for locally-elected officials on bond issuance. Specifically, in addition to webinars, online training and other written materials, this should include a one- or two-page guide for local officials including key questions that should be answered by staff and consultants on the terms of any bond authorization, including total cost of the bond, including interest and fees and the effect of a bond issuance on debt ratio.

Recommendation 4: Policymakers should enact legislation requiring a truth in bonding statement be provided for review by elected officials prior to authorizing a bond issuance.

Recommendation 5: Policymakers should enact legislation requiring the county treasurer to review and comment on bond issuance proposals prior to authorization. The county treasurer also should advise policymakers on maintaining a prudent debt ratio.

Recommendation 6: Develop easy-to-access online training materials for members of Citizens’ Bond Oversight Committees.
Specifically, the Governor and Legislature should direct and authorize one-time funding to the Fiscal Crisis and Management Assistance Team to develop online training for local Citizens’ Bond Oversight Committee members, with input and assistance from the California Debt and Investment Advisory Committee and theCalifornia League of Bond Oversight Committees.

Recommendation 7: The Governor and Legislature should update and overhaul the education code related to the Strict Accountability in Local School Construction Bonds Act of 2000.
Specifically,

  • Amend statuary code on performance audits to include the effectiveness and results of the bond
  • Amend statutory code on performance audits to include the effectiveness and results of the bond
  • Expand the role of Citizens’ Bond Oversight Committees in selecting and interacting with bond program
  • Require bond measures proposed to voters under the reduced threshold to include specific projectChange the appointment authority for members of Citizens’ Bond Oversight Committees.
  • Require districts to provide a minimal budget for the oversight committees, including a budget to hire independent counsel with municipal bond
  • Require districts to provide a Web presence for Citizens’ Bond Oversight Committees to prominently display meeting agendas and reports.

 Recommendation 8:  Impose sanctions for school and community college districts that fail to adhere to constitutional and statutory requirements of Proposition 39, including preventing the district from adopting future bond measures under the reduced voter threshold.

Full Report 2017 #236:
https://lhc.ca.gov/sites/lhc.ca.gov/files/Reports/236/Report236.pdf

LHC 2009 #197
Bond Spending: Expanding and Enhancing Oversight:
https://lhc.ca.gov/sites/lhc.ca.gov/files/Reports/197/Report197.pdf