Santa Cruz County
CA

Agenda Item
DOC-2020-118

Authorize the Chairman of the Board of Supervisors to draft a letter to neighboring Central Coast counties and cities, about their interest in participating in a study for a Central Coast Public Bank, and draft a letter to the Santa Clara County Board of Supervisors requesting they consider including Santa Cruz County in their viability study, as recommended by Supervisor Friend and Supervisor Coonerty

Information

Department:Board of Supervisors: Second DistrictSponsors:Third District Supervisor Ryan Coonerty, Second District Supervisor Zach Friend
Category:BOS Second District - Board Letter

Board Letter

Recommended Action(s):

In order to gauge regional support for creation of a public bank, we are requesting that our Board:

 

1)              Authorize the Chairman to draft a letter to neighboring Central Coast counties and cities, asking them about their interest in participating in a viability study for a Central Coast Public Bank; and

 

2)              Authorize the Chairman to draft a letter to the Santa Clara County Board of Supervisors requesting they consider including Santa Cruz County in their viability study.

 

 

Background

Last year the Santa Cruz County Board of Supervisors voted to support Assembly Bill (AB) 857, to begin the process of creating one or more public banks in California. That bill has now passed in both houses of the State Legislature and been signed into law by the Governor. A public bank would provide an alternative to Wall Street for-profit banks for governmental and other large agencies with respect to the investment of funds over which they have control. It would provide a less expensive mechanism for issuing municipal bonds and other financial instruments, and would reinvest profits into local community projects such as affordable housing and other public projects rather than into the pockets of the private investors who own private banks. In addition, public banks are able to establish policies restricting their investments in fossil fuels or other enterprises that might not align with a community’s value set.

 

 

Analysis

Under the provisions of AB 857, the first step toward establishing a public bank is a viability study that would clarify the collateral and initial investment or capitalization necessary for the success of such an enterprise. A number of large local governments in California, including Oakland, Los Angeles, and San Francisco have begun taking the first steps toward the creation of public banks for their communities. Because public banks do not compete with community credit unions or local commercial banks to provide services to individual residents, but do provide the financial back up required by such local institutions, they are typically fairly large in scale. Santa Cruz County and its four cities alone do not provide enough financial support for a public bank.

 

We propose exploring the possibility of creating a Central Coast public bank that would require the support and financial buy-in of several local governmental agencies, perhaps modeled on our successful creation of Monterey Bay Community Power. As with that example, we are proposing that Santa Cruz County play a key role in the initial establishment of a public bank. The first step in this process would be having the Chairman send letters to our neighboring cities and counties regarding their interest in partnering in a viability study as well as outreach to Santa Clara County regarding their current viability study to see if our County can be added in to their analysis. While it may be preferred to have a local (Central Coast) option, it’s important to also see if joining with a larger Bay Area public bank might be more feasible.

 

 

Body

Strategic Plan Element(s)

A public bank could connect to and support all focus areas in the Strategic Plan.

 

 

Meeting History

Feb 11, 2020 9:00 AM Video Board of Supervisors Regular Meeting
RESULT:AUTHORIZED [UNANIMOUS]
MOVER:Ryan Coonerty, Third District Supervisor
SECONDER:Zach Friend, Second District Supervisor
AYES:John Leopold, Zach Friend, Ryan Coonerty, Greg Caput, Bruce McPherson

Discussion