September 13, 2006 |
2006-R-0473 | |
GRANTING BONDING POWERS TO REGIONAL PLANNING ORGANIZATIONS | ||
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By: John Rappa, Principal Analyst | ||
You asked about the kinds of issues that could arise if the legislature considered granting regional planning organizations (RPOs) bonding powers.
The legislature would have to address at least two issues if it considered granting RPOs bonding powers. First, it would have to consider why RPOs should have these powers. The legislature usually grants bonding powers as a part of a larger package that authorizes a body to plan, implement, and finance physical development projects, such as building roads and sewers, constructing parks and schools, and redeveloping economically distressed areas. Currently, RPOs do not have this authority.
As Table 1 shows, RPOs are creatures of the towns and depend on them for their funding. They mostly help towns identify and address common needs and concerns. In some cases, they prepare plans recommending how land should be used for different purposes. They have no authority to independently plan and implement physical development projects and raise the revenue needed to finance them.
If the legislature decided to give RPOs bonding powers and allow them to undertake or finance physical development projects, it would have to address how RPOs must repay the bonds. Agencies that issue bonds to fund a project must have the ability to create or tap an existing revenue source to repay them. A parking authority, for example can issue bonds to construct a parking garage and use the revenue the garage generates to repay them. A town can issue bonds to build a school and repay them with property taxes it collects. RPOs can neither create nor tap revenue sources.
The ability to raise revenue or tap a revenue stream to repay a bond determines whether investors will buy it. The revenue source allows investors to determine if it can generate enough money to repay the bond's principal and interest. As Table 1 shows, RPOs cannot raise their own revenues but must rely mainly on town appropriations and state and federal grants to cover their costs. A bill granting them bonding powers has little, if any, practical effect unless it identifies how the RPO must repay its bonds.
Table 1: RPO Duties and Powers and Funding Sources
Variable |
Type of RPOs | ||
Regional Council of Elected Officials |
Regional Councils of Governments |
Regional Planning Agencies | |
Purpose |
• Consider matters common to two or more towns, including health, safety, welfare, education, and economy • Promote cooperative arrangements • Recommend and coordinate actions among towns • Perform functions within region (CGS § 4-129d) |
Same as regional councils of elected officials ((CGS § 4-129m) |
• Prepare 10-year regional plans of conservation and development (CGS § 8-35a) • Recommend metropolitan, regional, or intermunicipal arrangements for economic development, operating public facilities, or providing services CGS § 8-35b) • Upon request from a member town, study if it's feasible to build a facility or deliver a service • Recommend contractual arrangements for such studies (CGS § 8-35a) |
Funding Sources |
• Receive funds from any source, including state and federal agencies • Accept bequests, gifts, or contributions people, corporations, and associations • Member towns must annually appropriate funds according to dues formula, which they must establish (CGS § 4-129f) |
Same as regional councils of elected officials (CGS § 4-129p) |
• Same as regional councils of elected officials (CGS § 8-34a) |
JR: ro