1.3.2 Joint Powers Authorities

A joint exercise of powers agency or authority (JPA) is a separate governmental entity formed by two or more governmental entities. A JPA is created by an agreement (generally called a “Joint Exercise of Powers Agreement” and referred to as a “JPA agreement”) among the governmental entities forming the JPA (generally referred to as “JPA members”). Once established, the JPA is an independent governmental entity separate from the JPA members. JPAs are not subject to the constitutional debt limit. JPAs are frequently used as the issuer of bonds in lease revenue bond transactions or as the issuer of other bonds secured by local agency obligations. Although the JPA bonds are not subject to the constitutional debt limit, a local agency obligation securing the JPA bonds may be. For example, in a JPA lease revenue bond transaction for a city, the lease between the JPA and the city must satisfy the requirements of the Lease Exception to the debt limit. See Section 3.6.4, Joint Powers Agency or Authority (JPA) Bonds and Other Issuances and Section 3.8, Joint Exercise of Powers Agencies discusses JPAs in greater detail.