BILL ANALYSIS Ó
AB 2167
Page 1
ASSEMBLY THIRD READING
AB 2167 (Hill)
As Amended April 23, 2012
Majority vote
LOCAL GOVERNMENT 8-0
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|Ayes:|Smyth, Alejo, Bradford, | | |
| |Campos, Davis, Gordon, | | |
| |Hueso, Knight | | |
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SUMMARY : Modifies the Bay Area Water Supply and Conservation
Agency's (BAWSCA) enabling act to allow BAWSCA to issue bonds
under special circumstances. Specifically, this bill :
1)Revises provisions in BAWSCA's enabling act which allow BAWSCA
to make bond proceeds available to other local public agencies
to require that the bonds be for the purpose of assisting in
the repayment of any existing capital assets, or in the
construction, reconstruction, or improvement of works, if
those assets were, or the works are, designed and intended in
whole or in part to furnish water to members of BAWSCA,
whether those assets were, or works are, carried out jointly
by the agency and other local public agencies, or solely by
those other public agencies.
2)Authorizes BAWSCA, with regard to rates, fees and charges, to
impose those rates, fees, or charges, as a surcharge collected
by the City and County of San Francisco and transferred to
BAWSCA.
EXISTING LAW :
1)Establishes BAWSCA, the membership of the Board of Directors
of BAWSCA (Board), board member terms and compensation, and
subjects meetings of BAWSCA to the Ralph M. Brown Act.
2)Defines, as "eligible entities" for purposes of BAWSCA's
membership, the 24 public entities in San Mateo County,
Alameda County, and Santa Clara County that purchase water
from San Francisco pursuant to the July 2009 Water Supply
Agreement, or any subsequent water supply contract, that
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include Alameda County Water District, City of Brisbane, City
of Burlingame, Coastside County Water District, City of Daly
City, City of East Palo Alto, Estero Municipal Improvement
District, Guadalupe Valley Municipal Improvement District,
City of Hayward, Town of Hillsborough, City of Menlo Park,
Mid-Peninsula Water District, City of Millbrae, City of
Milpitas, City of Mountain View, North Coast County Water
District, City of Palo Alto, Purissima Hills Water District,
City of Redwood City, City of San Bruno, City of San Jose,
City of Santa Clara, City of Sunnyvale, and Westborough Water
District.
3)Establishes the powers and duties of BAWSCA.
4)Requires the Board to adopt an annual budget and requires
BAWSCA's accounts to be audited annually.
5)Allows BAWSCA to borrow money, incur indebtedness, and issue
notes and bonds.
6)Allows BAWSCA to issue revenue bonds upon the adoption of an
ordinance by a two-thirds vote of all of the members of the
Board, as specified, and does not require BAWSCA to conduct an
election or otherwise secure approval of the voters within the
boundaries of the agency.
7)Requires BAWSCA to publish a notice in a newspaper of general
circulation at least 15 days before the meeting at which
issuance of revenue bonds is to be considered, and requires
BAWSCA to provide an opportunity for public comments during
that meeting prior to the vote on the issuance of the bonds.
8)Allows BAWSCA to issue bonds for the purpose of refunding any
revenue bonds of BAWSCA, whether due or not due.
9)Allows BAWSCA to use proceeds of bonds for the construction,
reconstruction, or improvement of any works BAWSCA carries
out.
10)Allows BAWSCA to make proceeds of bonds available to other
local public agencies on mutually satisfactory terms and
conditions to assist in the construction, reconstruction, or
improvement of works designed or intended in whole or in part
to furnish water to the members of BAWSCA, whether those works
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are carried out jointly by BAWSCA and other local public
agencies, or solely by those other public agencies.
11)Allows an action to determine the validity of any contract,
or any bond, note, or other evidence of indebtedness to be
brought pursuant to Validating Proceedings, as specified in
Chapter 9 of the Code of Civil Procedure.
FISCAL EFFECT : None
COMMENTS : Owned and operated by the City and County of San
Francisco, the Hetch Hetchy system is a regional asset that
delivers water to millions of Bay Area residents. When the
suburban water purveyors wanted to help finance improvements to
the Hetch Hetchy system, the Legislature created the San
Francisco Bay Area Regional Water System Financing Authority (SB
1870 (Speier), Chapter 846, Statutes of 2002). To coordinate
the suburban purveyors' efforts, the Legislature created BAWSCA
in AB 2058 (Papan), Chapter 844, Statutes of 2002.
BAWSCA is a regional water district and was designed by the
State Legislature to help protect the health, safety and
economic well-being of 1.7 million residents, businesses and
community organizations in Alameda, San Mateo and Santa Clara
counties who depend on the San Francisco Bay Area regional water
system. BAWSCA is currently governed by a 26-member Board of
Directors comprised of members representing the 24 cities and
water districts that are member agencies of BAWSCA, and two
private utilities that also have appointees to the Board,
Stanford University and California Water Service Company.
BAWSCA is currently authorized to issue bonds for specific
purposes and according to the author, those purposes need to be
amended in order for the agency to carry out its functions. The
existing authority to issue bonds does not specifically cite
authority to repay existing capital assets for which BAWSCA's
26-member agencies have contractually agreed to pay.
According to BAWSCA, the sponsor of the bill, there was an
agreement in 2009 between San Francisco and its wholesale
customers (BAWSCA's member agencies) that required that the
wholesale customers repay their share of the cost of existing
capital assets over the term of the agreement.
This bill expands BAWSCA's bonding authority to include issuing
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bonds for the purpose
of repaying San Francisco for the costs of existing capital
assets. BAWSCA notes that current market conditions would
enable BAWSCA's member agencies and their water companies to
save millions of dollars over the next 25 years if BAWSCA were
to issue for that purpose.
Additionally, the bill allows BAWSCA to impose rates, fees, and
charges as a surcharge collected by the City and County of San
Francisco and would then be transferred to BAWSCA. This would
create efficiency because San Francisco already charges a water
management line item.
Support arguments: The sponsor writes that this bill will allow
BAWSCA to increase San Francisco's reserves and also allow it to
reduce its future rate increases for customers in San Francisco.
Opposition arguments: None on file.
Analysis Prepared by : Debbie Michel / L. GOV. / (916)
319-3958
FN: 0003479