HB 6546 Summary

• Allows cities and counties with accumulated operating deficits to issue bonds or obligations for funding past or current fiscal year deficits, with authority granted in addition to existing charter powers.

• Creates two separate approval pathways: Section 4 for all cities and counties with basic deficit conditions, and new Section 4a for cities with 50,000+ population and counties that can project deficits up to 5 years ahead and maintain 10% general fund reserves.

• Requires legislative body resolutions determining deficit existence per generally accepted accounting principles, board approval within 7 days of complete application, and chief executive officer statements on plans to avoid future deficits.

• Limits tax-based bonds to 3% of state equalized property valuation or maximum of $125,000,000 (or $250,000,000 for cities issuing between January 1-September 1, 2010), with exclusions for reserves, issuance costs, discounts, and refunding bonds.

• Section 4a requires multiyear fiscal transition plans including 3-year historical and projected financial data, specific expense reduction goals, structural operating surplus targets, and annual board submissions; bonds exempt from revised municipal finance act but subject to agency financing reporting act.