October 25, 2005 |
2005-R-0772 Revised | |
QUASI-PUBLIC AGENCIES | ||
By: Sandra Norman-Eady, Chief Attorney | ||
You asked several questions about Connecticut quasi-public agencies. Primarily, you are interested in why they were established, their roles, to whom they are accountable, what oversight is built into state law, and how they are funded. We address each question separately below. Most of the information in this report is an update of information from two Legislative Program Review and Investigations Committee (LPRIC) studies: Quasi-Public Agencies in Connecticut (1988) and Connecticut Resources Recovery Authority and other Quasi-Public Agencies (2002).
How Many Quasi-Public Agencies Are There in Connecticut?
Connecticut has 11 quasi-public agencies:
1. Connecticut Development Authority (CDA);
2. Connecticut Innovations, Incorporated (CII);
3. Connecticut Health and Educational Facilities Authority (CHEFA);
4. Connecticut Higher Education Supplemental Loan Authority (CHESLA);
5. Connecticut Housing Finance Authority (CHFA);
6. State Housing Authority (CHA);
7. Connecticut Resources Recovery Authority (CRRA);
8. Connecticut Hazardous Waste Management Service (CHWMS);
9. Capital City Economic Development Authority (CCEDA);
10. Connecticut Lottery Corporation (CLC); and
11. Lower Fairfield County Conference or Exhibition Authority (LFCCEA).
The oldest of these, CHEFA, was established in 1965.
Generally Why Were They Created?
The major reason for establishing quasi-public agencies here was their organizational location outside the structure of state government, which meant they could avoid many of the requirements and controls imposed on governmental agencies. Thus, they could respond to problems and opportunities faster and more efficiently than a comparable state agency.
What Is The Purpose, Governing Body, Bonding Authority, and Funding Source Of Each Agency?
Quasi-PublicAgencies |
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CDA CGS § 32-11a et seq. |
Purpose: Governing Body: Bonding Authority: Funding: |
Provides and guarantees business loans for developing new facilities, acquiring machinery and equipment, and meeting working capital needs. It mainly targets manufacturers and other businesses that bring wealth into the state by selling their goods and services to customers outside the state (i. e. , economic base industries). 11-member board of directors Under the Umbrella Bond Program, CDA issues bonds to provide loans to private entities. Loan payments from the borrowers provide the funds to pay debt service on the bonds. Under the General Obligation Bond Program, CDA issues bonds to finance eligible economic development and information technology projects. CDA’s unpledged general revenue pays for debt service on the bonds. Bonding, interest on loans, income from investment of funds and grants, and application fees. |
CII CGS § 32-32 et seq. |
Purpose: Governing Body: Bonding Authority: Funding: |
Provides the capital entrepreneurs need to research, develop, and market new technologies.
15-member board of directors. Commissioners of economic and community development and higher education and the Office of Policy and Management (OPM) secretary are ex officio members None. CII’s programs were initially funded with General Obligation bonds and subsequent loan repayments were used to establish self-sustaining revolving loan funds. Interest on loans, income from investment of funds and grants, and application fees. |
CHEFA CGS § 10a- 179 et seq. CHEFA (cont. ) |
Purpose: Governing Body: Bonding Authority: Funding: |
Provides financing to nonprofit colleges and health care institutions to support construction of facilities such as dormitories, academic buildings, athletic facilities, clinics, hospitals, and laboratories. 10-member board. The state treasurer and the OPM secretary are ex officio members. CHEFA can issue its own bonds and other obligations. It also issues tax-exempt and taxable revenue bonds secured by a special capital reserve fund (SCRF) to finance projects for “participating nursing homes” or for housing, student centers, food service facilities and other auxiliary service facilities at public institutions of higher education, including the CSU system. In addition, PA 04-1 (MSS) authorized CHEFA to issue up to $ 100 million in special obligation funds secured by a special capital reserve fund to finance equipment acquisitions by hospitals. Fees and loan repayments (CHEFA charges a premium above the interest rate at which bonds are issued) |
CHELSA CGS § 10a-224 et seq. |
Purpose: Governing Body: Bonding Authority: Funding: |
Makes direct loans to college students and their parents to help finance the costs of undergraduate and graduate education. Eight-member board of directors. The state treasurer, OPM secretary, and commissioner of Higher Education are ex officio members. CHESLA is authorized to issue its own bonds. Fees and loan repayments |
CHFA CGS § 8-244 et seq. |
Purpose: Governing Body: Bonding Authority: Funding: |
To alleviate the shortage of housing for low- and moderate-income individuals and families. 15-member board of directors Issues its own bonds to finance the Housing Mortgage Finance Program, which is secured by a SCRF. The Special Needs Housing Mortgage Finance Program (for group homes) is funded by General Fund appropriations and secured with a SCRF. Fees, loan repayments, and state appropriations. |
SHA CGS § 8-244b et seq. |
Purpose: Governing Body: Bonding Authority: Funding: |
As a subsidiary of CHFA and a successor to the Connecticut Housing Authority (CHA), SHA manages state housing projects that CHA initiated or acquired. Since CHA stopped taking new projects after May 25, 1994, SHA’s sole function is to oversee the only CHA loan still ongoing.
Three-member board of directors None. Loan repayments. |
CRRA CGS § 22a-261 et seq. |
Purpose: Governing Body: Bonding Authority: Funding: |
Plans, designs, builds, and operates solid waste disposal, volume reduction, recycling, intermediate processing, and resources recovery facilities. 11-member board of directors Generally none. However, to recover from losses created by Enron’s bankruptcy, CRRA issued bonds secured by a SCRF, of which approximately $ 153 million was outstanding on January 1, 2005. Tipping fees from participating municipalities and sale of energy generated from waste recycling. |
CHWMS CGS § 22a-134aa et seq. |
Purpose: Governing Body: Bonding Authority: Funding: |
promotes the appropriate management of hazardous waste in the state, with particular attention to the investigation of the management of metal hydroxide sludge and provides technical and financial assistance to hazardous waste generators. 11-member board of directors. The OPM secretary and the commissioners of public health, transportation, and environmental protection are ex officio members. According to the Department of Environmental Protection (DEP), the service and its board have been inactive and not staffed for almost 10 years. The last time the governor submitted an appointment was 1997. DEP has been performing its functions. None Grants, loans, and guarantees on contractual obligations. |
CCEDA CGS § 32-600 et seq. |
Purpose: Governing Body: Bonding Authority Funding: |
Stimulate new investments in the state; attract and service conventions, shows, exhibitions, and events; encourage the diversification of the state economy; strengthen Hartford’s role as the region’s major business and industry employment center and seat of government; encourage residential housing development in downtown Hartford; and broaden state tourism efforts. Seven-member board of directors CCEDA has authority to issue revenue bonds, notes, and other obligations in any principal amount necessary to provide sufficient funds for carrying out its purpose. Revenue from parking fees and utility (electricity & steam) sales are used to pay debt service on revenue bonds. Operating expenses are funded from a General Fund appropriation (through OPM). |
CLC CGS § 12-802 et seq. |
Purpose: Governing Body: Bonding Authority: Funding: |
Operates the state lottery 13-member board of directors. The state treasurer and the secretary of the Office of Policy and Management are ex-officio members None Prize payouts and lottery ticket sales. |
LFCCEA CGS § 32-200 et seq. |
Purpose: Governing Body: Bonding Authority: Funding: |
Plan, build, and operate a conference or exhibition center in Stamford. Nine-member board of directors. According to a 1997 Auditors of Public Accounts report, the authority “put itself on hold” in 1997. The last time the governor submitted a nomination was 1992. LFCCEA has statutory authority to issue bonds, notes, and other obligations in any principal amount necessary to provide sufficient funds for carrying out its purpose. Bonding, interest on loans, income from investment of funds and grants, and application fees. |
Source: OLR and OFA
What Control Does The State Have Over Quasi-Public Agencies?
Certain controls that the state has over state agencies also apply to quasi-public agencies. Table 1 shows these areas of control for each quasi-public agency. In instances where the controls do not apply, each quasi-public agency’s board is required to develop its own procedures, or in some cases, such as issuing bonds, an agency must follow special requirements included in its enabling statute.
In addition to these controls, the state exercises controls that are specific to quasi-pubic agencies. The law requires each quasi-public agency to submit an annual report to the governor, auditors of public accounts, and LPRIC. The report must, at a minimum, include:
1. a list of all bonds issued for the prior fiscal year, including their cumulative value, value of outstanding bonds, and the state’s contingent liability;
2. a list of all projects, other than those pertaining to owner-occupied housing or student loans, receiving financial assistance during the preceding fiscal year, including each one’s purpose, location, and funding amount;
3. a list of all outside individuals and firms receiving more than $ 5,000 in loans, grants, or payments for services;
4. a balance sheet showing all revenues and expenditures;
5. the affirmative action policy statement, a description of the agency’s workforce composition, and a description of its affirmative action efforts; and
6. a description of planned activities for the current fiscal year (CGS § 1-123).
The law also prohibits quasi-public agencies from contracting with the same financial auditor or auditing firm for more than six consecutive fiscal years (CGS § 1-127). Lastly, quasi-public agencies must get the state treasurer’s approval before borrowing any money or issuing any bonds or notes that are guaranteed by the state or for which there is a capital reserve fund that the state contributes to or guarantees (CGS § 1-124).
TABLE 1: Applicability of State Government Controls to Quasi-Public Authorities
Control |
CDA |
CII |
CHEFA |
CHESLA |
CHFA |
CHA |
CRRA |
CHWMS |
CCEDA |
CLC |
LFCCEA |
Budget |
No |
No |
No |
No |
No |
No |
No |
No |
No |
No |
No |
Bonding |
No * |
Yes |
No |
No |
No |
Yes |
No |
Yes |
Yes |
Yes |
No |
Personnel |
No |
No |
No |
No |
No |
No |
No |
No |
No |
No |
No |
Purchasing |
No |
No |
No |
No |
No |
No |
No |
No |
No |
No |
No |
Contracting |
No |
No |
No |
No |
No |
No |
No |
No |
No |
No |
No |
Affirmative Action |
No |
No |
No |
No |
No |
No |
No |
No |
No |
No |
No |
UAPA ** |
No |
No |
No |
No |
No |
No |
No |
No |
No |
No |
No |
Code of Ethics |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
FOI |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
State Auditors |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Yes |
Source: LPRIC’s report entitled Connecticut Resources Recovery Authority and other Quasi-Public Agencies
UAPA= Uniform Administrative Procedure Act
FOI= Freedom of Information
*Under insurance mortgage program the State Bond Commission issues bonds, the proceeds of which are funneled through the Department of Economic and Community Development to CDA.
**The law requires all quasi-public agencies to follow certain guidelines when adopting its procedures (similar to the UAPA’s notice, publication, and approval requirements but without the need for legislative approval) (CGS § 1-121)
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