Title
a. Receive a report on Board Referral No. 2020.11 regarding the feasibility and viability of the creation of a public bank to serve local government needs.
Report
RECOMMENDATION:
It is recommended that the Board of Supervisors:
a. Receive a report on Board Referral No. 2020.11 regarding the feasibility and viability of the creation of a public bank to serve local government needs; and
b. Provide direction to staff.
SUMMARY:
On March 3, 2020, Supervisor Lopez and Supervisor Alejo submitted Board Referral No. 2020.11 "Investigate the feasibility and viability of the creation of a public bank to serve our local government need." Assembly Bill 857, adopted by the California Legislature in 2019, permits local governments to form and operate public banks. The law specifically states that any publicly owned depository would fall under the regulatory jurisdiction of the Federal Deposit Insurance Corporation (FDIC) and the California Department of Business Oversight. Cities such as San Francisco, Los Angeles, and San Diego have investigated the feasibility of forming public banks using assets held in their treasury investment pools. A Monterey County feasibility study is estimated to cost between $100,000 and $500,000. The Fiscal Year 2020-21 adopted budget currently has no allocated appropriations for the funding of a public bank feasibility study.
DISCUSSION:
On March 3, 2020, Supervisor Lopez and Supervisor Alejo submitted Board Referral No. 2020.11 for staff to investigate the feasibility and viability of creating a public bank to serve the local government needs while not competing with our local and national banking institutions. State legislators adopted AB 857 as a pilot program that allows for establishing public banks in California to address local government needs. AB 857 authorizes the lending of public credit by public banks and authorizes public ownership of public banks to achieve cost savings, strengthen local economies, support community econo...
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