Ron Kaye: Where are the questions?

The finance authority was founded as a joint powers agency in 2004 and now has more than 150 cities that have joined to provide cover for tax-exempt financing for all kinds of capital investments: Chevron USA got $250 million for pollution controls, Christian universities Biola and Azusa Pacific each got more than $100 million, while smaller Westmont College got $65 million and Catholic Mater Dei High School $25 million.

The list goes on and on into billions of dollars in tax-exempt bonds for private corporations, hospitals, schools, affordable housing and not-so-affordable housing — all carried out by a non-government agency accountable to no one, an agency that is free to pick and choose which projects to support by its own values as long as it can find a city or county to provide cover.

That's why Assemblyman Mike Feuer (D-Los Angeles) demanded a full and complete state audit of the California Municipal Finance Authority and the much larger California Statewide Communities Development Authority, which has facilitated more than $40 billion in tax-exempt bonds since it was set up in 1988 by the League of California Cities and the California State Assn. of Counties. The audit is due next month.

State Treasurer Bill Lockyer said they amount to “a private business being run out of a government agency” and need “a thorough scrubbing of their books and their operations.”

More and more cities like Burbank are jumping aboard now because they no longer have access to tax-increment financing since redevelopment agencies were abolished.

How little scrutiny the Lycee International deal got from city officials was clear in the City Council discussion on May 22 when City Atty. Amy Albano offered assurance that this scheme “can't be [used] for a for-profit” business — which isn't true — and that it was just like the city recently approving a bond sale by Bob Hope Airport, which Burbank owns with Glendale and Pasadena.

Yet, only Councilman David Gordon had qualms, noting the IRS offers three pages of risks about this kind of tax-free financing. He wondered what the public benefit is and worried that it “opens up a whole new world” for developers and others to seek the same deal.