BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 2167|
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THIRD READING
Bill No: AB 2167
Author: Hill (D)
Amended: 7/6/12 in Senate
Vote: 21
SENATE GOVERNANCE & FINANCE COMMITTEE : 7-0, 6/13/12
AYES: Wolk, Dutton, DeSaulnier, Fuller, Hernandez, Kehoe,
La Malfa
NO VOTE RECORDED: Liu
ASSEMBLY FLOOR : 74-0, 5/10/12 - See last page for vote
SUBJECT : Bay Area Water Supply and Conservation Agency:
financial
matters
SOURCE : Bay Area Water Supply and Conservation Agency
DIGEST : This bill allows the Bay Area Water Supply and
Conservation Agency to issue bonds to repay the costs of
capital facilities.
Senate Floor Amendments of 7/6/12 impose additional
conditions on San Francisco's authority to collect rates,
fees, and charges, imposed by the Bay Area Water Supply
Conservation Agency.
ANALYSIS : Although 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
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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
849, Statutes of 2002). To coordinate the suburban
purveyors' efforts, the Legislature created the Bay Area
Water Supply and Conservation Agency (BAWSCA) (AB 2058,
Papan, Chapter 844, Statutes of 2002).
State law allows BAWSCA to issue bonds by adopting an
ordinance approved by a 2/3 vote of its board members. The
agency may use bond proceeds to construct, reconstruct, or
improve any works carried out by the agency. The agency
also can make bond proceeds available to other local public
agencies on mutually satisfactory terms and conditions to
assist in the construction, reconstruction, or improvement
of works to furnish water to agency members.
This bill allows BAWSCA to prepay all or any portion of any
unpaid principal balance relating to specified capital
assets, on behalf of BAWSCA members, as provided in the
July 2009 Water Supply Agreement.
This bill allows BAWSCA to acquire from the City and County
of San Francisco, and allows the City and County of San
Francisco to sell, the right to receive amounts payable by
BAWSCA members under the July 2009 Water Supply Agreement.
If the agency acquires, and the City and County of San
Francisco sells, the rights to specified payments, this
bill requires the City and County of San Francisco, upon
request by the agency, to continue collecting the amounts
payable by BAWSCA members under the July 2009 Water Supply
Agreement in accordance with that agreement's terms. San
Francisco must transfer the amounts it collects to the
agency on a monthly basis, or on a periodic basis agreed to
by both the agency and San Francisco. This bill requires
that the amounts the agency receives from San Francisco
must be applied to pay debt service on specified bonds
issued by the agency and to satisfy all of its other
obligations related to the bonds. The agency can
distribute any amounts not needed for its bond obligations
to BAWSCA members. The agency can condition this
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distribution upon BAWSCA members' agreement to waive
specified prepayment rights that the members may have under
the July 2009 Water Supply Agreement.
This bill allows BAWSCA to use bond proceeds to:
Construct, reconstruct, or improve any works carried out
by the agency on behalf of a BAWSCA member.
Assist in the repayment of any existing capital assets,
if those assets were designed and intended, in whole or
in part, to furnish water to BAWSCA members, whether
those assets were carried out jointly by the agency and
other public agencies, or solely by those other public
agencies.
Prepay an unpaid principal balance relating to specified
capital assets, on behalf of BAWSCA members, as provided
in the July 2009 Water Supply Agreement.
Acquire from the City and County of San Francisco the
right to receive all or a portion of the amounts payable
to BAWSCA members under the July 2009 Water Supply
Agreement.
Pay the bonds' costs of issuance.
Fund reserve funds securing the bonds.
This bill allows BAWSCA, in addition to other authority
granted by state law, to:
Impose reasonable rates, fees, and charges on BAWSCA
members for any program or service provided or work
performed by the agency.
Impose rates, fees, and charges on BAWSCA members and any
entity that subsequently serves a BAWSCA member's service
area in an amount necessary, together with other funding
sources, to pay debt service on specified bonds and to
satisfy all other obligations related to those bonds,
including maintaining reserve funds and complying with
financial covenants.
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Distribute any amounts collected that are not needed for
the purposes of this article to BAWSCA members.
This bill requires, if requested by the agency, the City
and County of San Francisco to collect any rates, fees, and
charges imposed by the agency pursuant to a specified
statute as a surcharge under the July 2009 Water Supply
Agreement. This bill requires San Francisco to collect the
rates, fees, and charges, in a manner, and with remedies
for nonpayment, specified in an agreement between the
agency and San Francisco.
This bill defines "BAWSCA members" as Stanford University,
the California Water Service Company, 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.
This bill defines "July 2009 Water Supply Agreement" as the
water supply agreement by and between the City and County
of San Francisco and the BAWSCA members, as amended or
supplemented.
Comments
A 2009 agreement between San Francisco and BAWSCA's member
agencies, which are the wholesale customers of the San
Francisco Regional Water System, requires that the
wholesale customers repay their shares of the system's
existing capital assets over the term of the agreement.
The agreement also provides that the amount the wholesale
customers owe can be prepaid through BAWSCA.
BAWSCA officials want the Legislature to amend the Agency's
special act to allow it to issue bonds to repay San
Francisco for the costs of existing capital assets under
the terms of the 2009 agreement.
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FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 6/20/12)
Bay Area Water Supply and Conservation Agency (source)
San Francisco Public Utilities Commission
ASSEMBLY FLOOR : 74-0, 5/10/12
AYES: Achadjian, Alejo, Allen, Ammiano, Atkins, Beall,
Bill Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Conway, Davis, Dickinson,
Donnelly, Eng, Feuer, Fong, Fuentes, Beth Gaines,
Galgiani, Garrick, Gatto, Gordon, Gorell, Grove, Hagman,
Halderman, Hall, Harkey, Hayashi, Roger Hernández, Hill,
Huber, Hueso, Huffman, Jones, Knight, Lara, Logue, Bonnie
Lowenthal, Ma, Mansoor, Mendoza, Miller, Mitchell,
Monning, Morrell, Nestande, Nielsen, Norby, Pan, Perea,
Portantino, Silva, Skinner, Smyth, Solorio, Swanson,
Torres, Valadao, Wagner, Wieckowski, Williams, Yamada,
John A. Pérez
NO VOTE RECORDED: Cook, Fletcher, Furutani, Jeffries,
Olsen, V. Manuel Pérez
AGB:n 7/10/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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