BILL ANALYSIS �
AB 2167
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CONCURRENCE IN SENATE AMENDMENTS
AB 2167 (Hill)
As Amended July 6, 2012
Majority vote
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|ASSEMBLY: |74-0 |(May 10, 2012) |SENATE: |37-0 |(August 13, |
| | | | | |2012) |
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Original Committee Reference: L. GOV.
SUMMARY : Allows the Bay Area Water Supply and Conservation
Agency (BAWSCA) to issue bonds to repay the costs of capital
facilities.
The Senate amendments revise the contents of the bill, as
follows:
1)Allow BAWSCA to prepay all or a portion of any unpaid
principal balance relating to the existing capital assets as
of June 30, 2009, on behalf of BAWSCA members, as provided in
the July 2009 Water Supply Agreement.
2)Allow BAWSCA to acquire from the City and County of San
Francisco the right to receive all or a portion of the amounts
payable by BAWSCA members under the July 2009 Water Supply
Agreement.
3)Allow the City and County of San Francisco to sell to BAWSCA
its right to receive amounts payable by BAWSCA members under
the July 2009 Water Supply Agreement.
4)Provide that, if BAWSCA acquires, and the City and County of
San Francisco sells, the right to receive amounts payable, as
specified, if requested by BAWSCA, the City and County of San
Francisco shall continue to collect amounts payable by BAWSCA
members under the July 2009 Water Supply Agreement in
accordance with the terms of that agreement and the City and
County of San Francisco shall transfer amounts so collected to
BAWSCA on a monthly basis or on a periodic bases agreed to by
BAWSCA and the City and County of San Francisco.
5)Provide that BAWSCA apply amounts received pursuant to the
bill's provisions to pay debt service on any bonds issued by
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the agency for an authorized use, as specified, and to satisfy
all other obligations of the agency related to these bonds.
6)Allow BAWSCA to distribute any amounts received pursuant to
the bill's provisions not needed to BAWSCA members, and
provide that BAWSCA may condition any distribution upon BAWSCA
members' agreement to waive any right of prepayment respecting
any amounts purchased that the member may have under the July
2009 Water Supply Agreement.
7)Allow BAWSCA to use bond proceeds as follows:
a) For the construction, reconstruction, or improvement of
any works carried out by the agency on behalf of a BAWSCA
member;
b) For the purpose of assisting 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 local public agencies, or solely by
those other public agencies;
c) To make a prepayment, or acquisition, as specified; and,
d) To pay the costs of issuance of the bonds and to fund
reserve funds securing the bonds.
8)Allow, in addition to existing authority, BAWSCA to do all of
the following:
a) Impose reasonable rates, fees and charges on BAWSCA
members for any program or service provided or work
performed by the agency;
b) Impose rates, fees, and charges on BAWSCA members and
any entity that subsequently serves a BAWSCA member's
service area in an amount as shall be necessary, together
with the other available sources of funds, to pay debt
service on any bonds issued by the agency for a specified
use, and to satisfy all other obligations of the agency
related to these bonds, including, but not limited to,
funding and maintaining reserve funds and complying with
financial covenants; and,
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c) Distribute any amounts collected that are not needed for
the purposes of this article to BAWSCA members.
9)Require the City and County of San Francisco, if requested by
BAWSCA, to collect any rates, fees, and charges imposed by
BAWSCA pursuant to the bill's provisions as a surcharge under
the July 2009 Water Supply Agreement.
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)Establishes the powers and duties of BAWSCA.
3)Requires the Board to adopt an annual budget and requires
BAWSCA's accounts to be audited annually.
4)Allows BAWSCA to borrow money, incur indebtedness, and issue
notes and bonds.
5)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.
6)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.
7)Allows BAWSCA to issue bonds for the purpose of refunding any
revenue bonds of BAWSCA, whether due or not due.
8)Allows BAWSCA to use proceeds of bonds for the construction,
reconstruction, or improvement of any works BAWSCA carries
out.
9)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
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to furnish water to the members of BAWSCA, whether those works
are carried out jointly by BAWSCA and other local public
agencies, or solely by those other public agencies.
AS PASSED BY THE ASSEMBLY , this bill:
1)Revised 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)Authorized BAWSCA to impose rates, fees, or charges, as a
surcharge collected by the City and County of San Francisco
and transferred to BAWSCA.
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
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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 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 BAWSCA 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 BAWSCA, 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 BAWSCA on a monthly basis, or on a periodic basis
agreed to by both BAWSCA and San Francisco. This bill requires
that the amounts BAWSCA receives from San Francisco must be
applied to pay debt service on specified bonds issued by BAWSCA
and to satisfy all of its other obligations related to the
bonds. BAWSCA can distribute any amounts not needed for its
bond obligations to BAWSCA members. BAWSCA can condition this
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:
1)Construct, reconstruct, or improve any works carried out by
the agency on behalf of a BAWSCA member.
2)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 BAWSCA and other public agencies, or
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solely by those other public agencies.
3)Prepay an unpaid principal balance relating to specified
capital assets, on behalf of BAWSCA members, as provided in
the July 2009 Water Supply Agreement.
4)Pay the bonds' costs of issuance.
5)Fund reserve funds securing the bonds.
This bill allows BAWSCA, in addition to other authority granted
by state law, to:
1)Impose reasonable rates, fees, and charges on BAWSCA members
for any program or service provided or work performed by
BAWSCA.
2)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.
3)Distribute any amounts collected that are not needed for the
purposes of the bill's provisions to BAWSCA members.
This bill requires the City and County of San Francisco to
collect any rates, fees, and charges imposed by BAWSCA pursuant
to a specified statute as a surcharge under the July 2009 Water
Supply Agreement, if requested by BAWSCA.
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: 0004476
AB 2167
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