Local government finance: budget reserves.

Existing law requires the officer of each local agency, who has charge of the financial records of the local agency, to furnish to the Controller a report of all the financial transactions of the local agency during the next preceding fiscal year within a specified amount of time of the close of each fiscal year. Existing law requires the report to include, among other things, the aggregate amount of taxes levied, as specified, and the total expenditures made by administrative departments during the preceding fiscal year. This bill would require a local government by September 1, 2020, and annually thereafter, to submit a written report to the State Controller's office on how it plans to spend any of its budget reserves, as defined, on specified priorities over a 5-year fiscal period, including, among others, mental and behavioral health services and affordable housing. The bill would provide this reporting requirement only applies to a local government if the local government's budget reserve in the immediately preceding fiscal year was in excess of 30 percent of the total expenditures of the local government in that fiscal year. By placing new reporting requirements on local governments, the bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.