A&A: Governing Boards with Public Funds

Governing Boards with Public Funds

Q: I would like to know if governing Boards for co-ops that use public funds fall into the jurisdiction of the Brown Act or the Bagley-Keen open meeting act?  If so how the Brown Act applies to these governing bodies?

A: The California Brown Act generally requires “legislative bodies” of “local agencies” (for example, cities, counties, and school districts) to hold their meetings open to the public unless a specific statutory exception allows a meeting to be conducted in closed session.  The Act also imposes certain notice and agenda requirements and provides for remedies for violations. Note that the mere receipt of public funds by a co-op or other typically private entity, without more, does not subject the entity to the Brown Act.  California Government Code section 54952(c) sets forth two sets of circumstances under which such an organization might be subject to the Brown Act’s open meetings requirements:

First, a governing board (or other multimember body) that governs a co-op could be subject to the Brown Act if the board was created by an elected legislative body in order to exercise authority that can be lawfully delegated to it. Cal. Gov’t Code section 54952(c)(1)(A). Typically, entities subject to the Act under this section will be nonprofit corporations established by government entities for the purpose of constructing, operating, or maintaining a public works project or public facility. Int’l Longshoremen’s & Warehousemen’s Union v. Los Angeles Expert Terminal, Inc., 69 Cal. App. 4th 287, 294 (1999). Whether an entity is “created by” an elected legislative body, can be difficult to determine.  California case law indicates that, for example, if a city creates a special local assessment district, collects assessments from local property owners, and provides by ordinance that the programs paid for with those funds will be governed by a non-profit association, the non-profit corporation set up to govern those programs will be subject to the Brown Act.  See Epstein v. Hollywood Entertainment District II Business Improvement Dist., 87 Cal. App. 4th 862 (2001).

Second, the Brown Act may also apply to the governing board of a co-op if the co-op receives funds from a local agency and the legislative body of that agency also appoints one of its own members to the co-op’s governing board as a full voting member.  See Cal Gov Code 54952(c)(1)(B).   If both of those conditions exist, the co-op should be subject to the Brown Act.

Like the Brown Act, the meetings of bodies covered by the Bagley-Keene Act are presumptively public.  However, whereas the Brown Act applies to legislative bodies of local agencies, the Bagley-Keene Act applies to multimember “state bodies.”  Again, receipt of public funds does not necessarily dictate whether the Bagley-Keene Act applies.   Under California Government Code 11121, a “state body” includes any of the

(a) Every state board, or commission, or similar multimember body of the state that is created by statute or required by law to conduct official meetings and every commission created by executive order.

(b) A board, commission, committee, or similar multimember body that exercises any authority of a state body delegated to it by that state body.

(c) An advisory board, advisory commission, advisory committee, advisory subcommittee, or similar multimember advisory body of a state body, if created by formal action of the state body or of any member of the state body, and if the advisory body so created consists of three or more persons.

(d) A board, commission, committee, or similar multimember body on which a member of a [state] body . . . serves in his or her official capacity as a representative of that state body and that is supported, in whole or in part, by funds provided by the state body, whether the multimember body is organized and operated by the state body or by a private corporation.

Subsection (d) contemplates that a private entity receiving funds from a state body could itself be considered a “state body” under the jurisdiction of the Bagley-Keene Act provided that a member of the state body providing the funds also serves, in his or her official capacity, as a representative of the private entity.