Special Districts: Improving Oversight & Transparency

Report239_SpecialDistricts_s

Report #239, August 2017

OVERVIEW

The Little Hoover Commission, in a report sent Wednesday to Governor Brown and the Legislature, recommended several measures to strengthen oversight of California’s 2,071 independent special districts.  The state should eliminate unnecessary hurdles for district dissolutions and consolidations to improve service delivery, expand transparency by requiring every district to have a website with basic information and standardize current reporting requirements on revenues, expenditures and reserves, according to the Commission’s report, Special Districts: Improving Oversight & Transparency.

“Special districts are the most common form of government in California, yet because there are so many performing so many different types of services, it is hard to draw conclusions on whether taxpayers would be better served if various districts merged or consolidated,” said Commission Chairman Pedro Nava.  “Current local government oversight of these districts is working in many places, but not all corners of California. To that end we are recommending some legislative changes that should lead to improved service delivery and greater efficiency.”

Special districts are the workhorses of government in California, providing vital services ranging from fire protection to water, cemeteries to sewers. Often it is special districts on the front lines of adapting to climate change and the Commission’s study focused on the important role districts can plan in both planning for change and educating their constituents. The Commission spent a year investigating whether California taxpayers are well-served by this little-understood layer of bureaucracy.  While they vary greatly in size and in services provided, some common themes emerged.

The Commission found that the 58 Local Agency Formation Commission charged with oversight are not uniformly effective at initiating dissolutions and consolidations when necessary to improve service delivery and efficiency.  The Commission recommends several legislative modifications to strengthen these local bodies as well as a small one-time funding injection to initiate the most urgent dissolutions and consolidations, something that should save taxpayer dollars in the long run.

Also in its review, the Commission found it difficult to find basic information on all special districts.  The Commission recommended requiring every special district to maintain a website outlining how to participate in decision making and an easy guide to revenue resources and expenditures, plus a published policy for financial reserves.

Additionally, the Commission focused on one type of district – healthcare districts – particularly those that no longer operate hospitals.  It found this segment needs to evolve to a modern preventative healthcare model, as some healthcare districts have.  As a start, the Commission recommends updating the outdated practice act that governs these districts.

The Little Hoover Commission is a bipartisan and independent state agency charged with recommending ways to improve the efficiency and effectiveness of state programs. The Commission’s recommendations are submitted to the Governor and the Legislature for their consideration and action.

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