2004 Senate Bill text for SB0446

SENATE BILL 446

46th legislature - STATE OF NEW MEXICO - second session, 2004

INTRODUCED BY

Carlos R. Cisneros

AN ACT

RELATING TO SPECIAL DISTRICTS; PROVIDING FOR THE CREATION OF A COUNTY WATER AND SANITATION AUTHORITY; ESTABLISHING POWERS AND DUTIES; ENACTING SECTIONS OF THE NMSA 1978.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. SHORT TITLE.--This act may be cited as the "County Water and Sanitation Authority Act".

Section 2. PURPOSE OF COUNTY WATER AND SANITATION AUTHORITY.--A county water and sanitation authority may be created for the purpose of:

A. purchasing, acquiring, establishing or constructing waterworks to supply water for domestic, commercial and industrial purposes by any available means to

persons within and without the boundaries of the authority, and for this purpose an authority shall have power to extend its water lines outside of the boundaries of the authority for the purpose of securing a source of water supply or for the purpose of supplying such water to any lands of the United States, the state of New Mexico or an Indian nation, tribe or pueblo for use by any person, firm or corporation;

B. purchasing, acquiring, establishing or constructing wastewater systems for the treatment and disposal of sewage; or

C. planning, developing or coordinating the development of regional water and wastewater facilities.

Section 3. DEFINITIONS.--As used in the County Water and Sanitation Authority Act:

A. "authority" means a county water and sanitation authority that is established pursuant to the County Water and Sanitation Authority Act; and

B. "board" means the board of directors of an authority.

Section 4. COUNTY WATER AND SANITATION AUTHORITY--CREATION.--A county water and sanitation authority may be established by ordinance of a board of county commissioners of a class A county having a final, full and assessed valuation of over three billion seven hundred million dollars ($3,700,000,000) and having a population of over one hundred twenty-five thousand persons according to the last federal decennial census.

Section 5. BOARD--APPOINTMENT--ELECTION--VACANCIES--REMOVAL.--

A. The board shall consist of five directors who are residents of the county in which the authority is created. The initial board of directors shall be appointed by the board of county commissioners and shall serve until their successors are appointed or elected in accordance with the provisions of this section.

B. During the next general election following the creation of an authority, three directors shall be elected at large by the voters of the county. One director shall serve an initial two-year term, and thereafter the director elected to that position shall serve a four-year term. Selection of the director to serve an initial two-year term shall be made by lot. The other two directors shall serve a term of four years. Thereafter, directors shall serve terms of four years. Elected directors shall be limited to serving two consecutive four-year terms.

C. Elections shall be governed by the procedures of the Election Code relating to the election of county officers.

D. Following creation of an authority, two directors shall be appointed by the board of county commissioners, and shall thereafter serve four-year terms subject to reappointment. No director appointed by the board of county commissioners shall serve more than two consecutive four-year terms. One of the appointed members shall be a member of and represent an Indian nation, tribe or pueblo in the county if tribal or pueblo lands are located within the territory comprising the authority. Any director appointed by a board of county commissioners shall be eligible for election, provided that no member of a board shall serve on the board for a total of more than ten years.

E. Vacancies on the board shall be filled by appointment by the board of county commissioners for the remainder of the unexpired term or until a successor is elected to fulfill the remainder of a term when the vacancy occurs in an elected position, the remaining term for which is more than two years and four months. If the board of county commissioners fails to fill any vacancy within thirty days after it occurs, the court having jurisdiction shall fill the vacancy.

F. The district court of the county in which the authority is created may remove a director from the board for cause shown after notice and hearing.

Section 6. BOARD--ORGANIZATION--OFFICERS--DUTIES.--

A. After taking oath and filing bonds, the board shall choose one of its members as chairman of the board and shall elect a secretary and a treasurer of the board who may or may not be members of the board. The secretary and treasurer may be one person.

B. The secretary shall keep a record of all of its proceedings, minutes of all meetings, certificates, contracts, bonds given by employees and all corporate acts, which shall be open to inspection to all members of the public.

C. The treasurer shall keep strict and accurate accounts of all money received by and disbursed for and on behalf of the authority, in permanent records. The treasurer shall file with the clerk of court, at the expense of the district, a corporate fidelity bond in an amount not less than five thousand dollars ($5,000), conditioned on the faithful performance of the duties of his office.

D. Members of the board shall serve without compensation unless otherwise provided by the ordinance creating the authority. Members shall be allowed their actual and necessary expenses incurred in performance of their duties. E. The board shall meet once each month at a time and place to be designated by the board. Special meetings may be held as often as the needs of the authority require on

notice to each member of the board. A majority of the board shall constitute a quorum at any meeting.

Section 7. BOARD--POWERS--DUTIES.--

A. All powers, privileges and duties vested in or imposed upon the authority shall be exercised and performed by the board. The board may delegate its powers by resolution to an officer or agent of the board, with the exception of the following:

(1) adoption of board policies and procedures;

(2) ratification of acquisition of property;

(3) initiation or continuation of legal action;

(4) establishment of policies regarding fees, tolls, rates or charges; and

(5) issuance of bonds.

B. The board shall promulgate and adhere to policies and procedures that govern its conduct and provide meaningful opportunities for public input. These policies shall include standards and procedures for calling emergency meetings.

C. A director of the board shall not vote on an issue when the director has a conflict of interest. A person who is a director of the board, officer of the board or employee of the board shall not:

(1) acquire a financial interest in a new or existing business venture or business property of any kind when the new financial interest will be directly affected by the person's official act;

(2) use confidential information acquired by virtue of the person's office or employment for his or another's private gain; or

(3) contract with the authority without public notice and competitive bidding and full disclosure of the person's financial or other interest in the business that is party to the contract.

D. The attorney general shall investigate and prosecute, when appropriate, a complaint involving a violation of Subsection C of this section. Violation of the provisions of Subsection C of this section by a director of the board, officer of the board or employee of the board is grounds for removal or suspension of the director or officer and dismissal, demotion or suspension of the employee.

E. In addition to all other powers conferred by the County Water and Sanitation Authority Act, the board may:

(1) adopt bylaws;

(2) fix the time and place of meetings and the method of providing notice of the meetings;

(3) make and pass orders and resolutions necessary for the government and management of the affairs of the authority and the execution of the powers vested in the authority;

(4) adopt and use a seal;

(5) maintain offices at a place as the board may designate;

(6) appoint, hire and retain employees, agents, engineers, attorneys, accountants, financial advisors, investment bankers and other consultants; and

(7) prescribe, in accordance with the Procurement Code, methods for auditing and allowing or rejecting claims and demands for:

(a) the awarding of contracts for the construction of improvements, works or structures;

(b) the acquisition of equipment; or

(c) the performance or furnishing of labor, materials or supplies as may be required for carrying out the purposes of the County Water and Sanitation Authority Act.

Section 8. POWERS OF AUTHORITY.--An authority is a body politic and corporate, and a political subdivision of the state. In addition to other powers granted to the authority pursuant to the County Water and Sanitation Authority Act, the authority may:

A. have perpetual existence;

B. sue and be sued;

C. enter into contracts and agreements affecting the affairs of the authority;

D. establish, collect and increase or decrease fees, tolls, rates or charges for the use of water and wastewater systems financed, constructed, operated or maintained by the authority; provided that fees, tolls, rates or charges imposed for the use of water and wastewater systems shall be fixed and adjusted to pay for bonds issued by the authority;

E. borrow money and issue bonds in accordance with the provisions of that act;

F. refund any bonded indebtedness or revenue bonds of the authority;

G. acquire, dispose of or encumber real and personal property and any interest in them, including leases and easements;

H. design, develop, construct, operate, maintain or contract for water and wastewater facilities and design, develop, construct, operate, maintain or contract for pipelines to interconnect authority sources and facilities and customers;

I. collect, treat and recover wastewater and to apply for and receive return flow credits for such activity;

J. engage in local water distribution;

K. design, develop, construct, operate, maintain or contract for alternative sources of potable water, including desalinized water, and pipelines to interconnect authority sources and facilities;

L. undertake regional water and wastewater planning;

M. receive from any state agency, municipality, political subdivision of the state, public corporation or person, a title, easements or licenses to property within this state for use by the authority in furthering the purposes set forth in the County Water and Sanitation Authority Act;

N. enter into agreements pursuant to the Joint Powers Agreements Act with municipalities, counties, Indian nations, tribes or pueblos, political subdivisions of the state or other parties to further the purposes of the authority or to provide such party preferential rights to receive water or dispose of wastewater;

O. design, construct, operate and maintain facilities in the locations and at the times necessary to ensure that an adequate water supply will be available to all citizens within the territory of the authority;

P. receive revenue from a county within the territory of the authority or a county having a contract for service with the authority. Such revenue may be derived from any source, including revenue derived from a county gross receipts tax or the county property tax, county bonding, general obligation bond or other source;

Q. apply for and receive federal, state and local grants, loans or other forms of assistance;

R. finance, construct, operate or maintain water and wastewater systems within the boundaries of the authority;

S. have and exercise the power of eminent domain and, in the manner provided by law for the condemnation of private property for public use, take any property necessary for the exercise of the powers granted in that act within the territory of an authority;

T. construct and maintain works and establish and maintain facilities across or along any public street or highway and through any vacant public lands which are now or may become the property of the state, and to construct works and establish and maintain facilities across any stream of water or watercourse; provided, however, that the district or authority shall promptly restore any such street or highway to its former state of usefulness as nearly as may be possible and shall not use the street or highway in such manner as to completely or unnecessarily impair its usefulness;

U. set rates and impose fees on water deliveries and wastewater disposal, which will apportion to parties and nonparties an equitable share of the capital cost and operating expense of the authority's work to the purchaser;

V. fix and from time to time to increase or decrease water and sewer rates, tolls or charges for services or facilities furnished or made available by the authority, including standby charges for both water and sewers, and to pledge that revenue for the payment of any indebtedness of the authority. Until paid, all rates, tolls or charges constitute a perpetual lien on and against the property served, and any such lien may be foreclosed in the same manner as provided by the laws of New Mexico for the foreclosure of real estate mortgages. The board shall shut off or discontinue service for delinquencies in the payment of the rates, tolls or charges imposed pursuant to the County Water and Sanitation Authority Act and prescribe and enforce rules for the connection with, and the disconnection from, properties of the facilities of the authority. For health and sanitary purposes, the board shall have the power to compel the owners of inhabited property within the territory of an authority to connect their property with the sewer system of the authority, and, upon a failure so to connect within sixty days after written notice by the board, the board may cause the connection to be made and a lien to be filed against the property for the expense incurred in making the connection; provided, however, that no owner shall be compelled to connect his property with such system unless a service line is brought by the district or authority to a point within four hundred feet of his dwelling place; and

W. have and exercise all rights and powers necessary or incidental to or implied from the specific powers granted in this section. Such specific powers shall not be considered as a limitation upon any power necessary or appropriate to carry out the purposes and intent of the County Water and Sanitation Authority Act.

Section 9. COUNTY WATER AND SANITATION AUTHORITY--TERRITORY AND EXCLUSIVE RIGHT TO PROVIDE SERVICE--JOINING AN AUTHORITY--COOPERATION WITH ADJOINING COUNTIES.--

A. The initial service area of a county water and sanitation authority shall be established by ordinance of the board of county commissioners and may consist of the territorial limits of the county in which an authority is established except the territory encompassed within a municipality, an existing water and sanitation district or the territory actually served on the effective date of the County Water and Sanitation Authority Act by an existing mutual domestic consumer water association. A county water and sanitation authority shall have the exclusive right to provide water and sanitation services within the territory served by that authority.

B. Counties, municipalities, water and sanitation districts and mutual domestic consumer associations may contract with or join and be part of the service area of a county water and sanitation authority if approved by resolution of the governing boards of the authority and by the party requesting to contract with or join the authority.

C. An authority may cooperate with an adjoining county in regional water planning and in providing water and wastewater services and facilities to the territory of that county by contract.

Section 10. REVENUE BONDS--AUTHORITY TO ISSUE--PLEDGE OF REVENUES--LIMITATION ON TIME OF ISSUANCE.--

A. Revenue bonds may be issued by the authority for acquiring real and personal property needed for an authority project, including the purchase of water rights, for extending, enlarging, bettering, repairing or otherwise improving a water or wastewater project or for any combination of those purposes. The authority may pledge irrevocably any or all of the net revenues from the operation of the water or wastewater system for payment of the interest on and principal of the revenue bonds.

B. Except for the purpose of refunding previous revenue bond issues, the authority may not sell revenue bonds payable from pledged revenues after the expiration of two years from the date of the resolution authorizing the issuance of the bonds. However, any period of time during which a particular revenue bond issue is in litigation shall not be counted in determining the expiration date of that issue.

C. The authority shall not impair the rights of any holders of bonds or other obligations payable from the net revenues of the water or wastewater system previously issued or incurred by the authority.

D. If required by the terms, covenants and provisions of revenue bonds or other obligations previously issued by the authority, all additional bonds or other obligations issued or incurred by the authority pursuant to the County Water and Sanitation Authority Act shall contain any required terms, covenants or provisions required to avoid impairment of the previously issued or incurred bonds or other obligations.

Section 11. USE OF PROCEEDS OF REVENUE BOND ISSUE.--It is unlawful to divert, use or expend any money received from the issuance of revenue bonds for any purpose other than the purpose for which the revenue bonds were issued.

Section 12. REVENUE BONDS--TERMS.--Revenue bonds:

A. may have interest, appreciated principal value or any part thereof payable at intervals or at maturity as may be determined by the authority;

B. may be subject to prior redemption at the authority's option at such time or times and upon such terms and conditions with or without the payment of such premium or premiums as may be determined by the authority;

C. may mature at any time or times not exceeding forty years after the date of issuance;

D. may be serial in form and maturity or may consist of one bond payable at one time or in installments or may be in such other form as may be determined by the authority;

E. shall be sold for cash at above or below par and at a price that results in a net effective interest rate that does not exceed the maximum permitted by the Public Securities Act; and

F. may be sold at public or negotiated sale.

Section 13. EXEMPTION FROM TAXATION.--The bonds authorized by the County Water and Sanitation Authority Act and the income from the bonds shall be exempt from all taxation by the state or any political subdivision of the state.

Section 14. RESOLUTION AUTHORIZING REVENUE BONDS.--

A. At a regular or special meeting called for the purpose of issuing revenue bonds, the authority may adopt a resolution that:

(1) declares the necessity for issuing revenue bonds; and

(2) authorizes the issuance of revenue bonds by an affirmative vote of two-thirds of all members of the authority.

B. Revenue bonds and the resolution authorizing their issuance shall be subject to approval by the state board of finance.

Section 15. REVENUE BONDS NOT GENERAL OBLIGATIONS--AUTHENTICATION.--

A. Revenue bonds or refunding revenue bonds issued as authorized in the County Water and Sanitation Authority Act are:

(1) not general obligations of the state or other political subdivision of the state; and

(2) collectible only from the pledged revenues of the water or wastewater system, and each bond shall state that it is payable solely from the pledged revenues of the water or wastewater system and that the bondholders may not look to any other fund of the state or political subdivision of the state for the payment of the interest and principal of the bond.

B. The bonds shall be executed by the chairman of the board and may be authenticated by the secretary of the board or any public or private transfer agent or registrar or its successor, which shall be named or otherwise designated by the board. The bonds may be executed as provided under the Uniform Facsimile Signature of Public Officials Act.

Section 16. REVENUE BONDS--MANDATORY RATES FOR THE WATER OR WASTEWATER SYSTEM--MANDAMUS--IMPAIRMENT OF PAYMENT.--

A. The authority shall establish rates for services rendered by the water or wastewater system to provide revenue sufficient to meet the following requirements, and such rates shall remain in effect until the bond issue is liquidated. Revenue shall be sufficient to:

(1) pay all reasonable expenses of operation of the water or wastewater system;

(2) pay all interest on the water or wastewater system revenue bonds as it comes due; and

(3) provide a sinking fund adequate to discharge the revenue bonds as they mature.

B. In the event the authority fails or refuses to establish rates for the water or wastewater system as required in this section, any bondholder may apply to the district court for a mandatory order requiring the authority to establish rates that will provide revenues adequate to meet the requirements of this section.

C. Any law that authorizes the pledge of any or all of the pledged water or wastewater system revenues to the payment of any revenue bonds issued pursuant to the County Water and Sanitation Authority Act or that affects the pledged revenues of the water or wastewater system, or any law supplemental to or otherwise appertaining to that act, shall not be repealed or amended or otherwise directly or indirectly modified in such a manner as to impair adversely any such outstanding revenue bonds, unless the outstanding revenue bonds have been discharged in full or provision has been fully made for payment of the bonds.

Section 17. REVENUE BONDS--REFUNDING AUTHORIZATION.--

A. The authority may issue refunding revenue bonds for the purpose of refinancing, paying and discharging all or any part of outstanding bonds or other obligations payable from the net revenues of the water or wastewater system previously issued or incurred by the authority.

B. The authority may pledge irrevocably for the payment of interest and principal on refunding bonds the pledged revenues of the water or wastewater system.

C. Bonds for refunding and bonds for any purpose permitted by the County Water and Sanitation Authority Act may be issued separately or issued in combination in one series or more.

Section 18. REFUNDING BONDS--ESCROW--DETAIL.--

A. Refunding bonds issued pursuant to the County Water and Sanitation Authority Act shall be authorized by resolution. Any bonds that are refunded pursuant to the provisions of this section shall be paid at maturity or on any permitted prior redemption date in the amounts, at the times and places and, if called prior to maturity, in accordance with any applicable notice provisions, all as provided in the proceedings authorizing the issuance of the refunded bonds or otherwise appertaining to the bonds, except for any such bond that is voluntarily surrendered for exchange or payment by the holder or owner.

B. Provision shall be made for paying the bonds refunded at the time or times provided in Subsection A of this section. The principal amount of the refunding bonds may exceed the principal amount of the refunded bonds and may also be less than or the same as the principal amount of the bonds being refunded so long as provision is duly and sufficiently made for the payment of the refunded bonds.

C. The proceeds of refunding bonds, including any accrued interest and premium appertaining to the sale of refunding bonds, shall either be immediately applied to the retirement of the bonds being refunded or be placed in escrow in a commercial bank or trust company, which possesses and is exercising trust powers and which is a member of the federal deposit insurance corporation, to be applied to the payment of the principal of, interest on and any prior redemption premium due in connection with the bonds being refunded; provided that such refunding bond proceeds, including any accrued interest and any premium appertaining to a sale of refunding bonds, may be applied to the establishment and maintenance of a reserve fund and to the payment of expenses incidental to the refunding and the issuance of the refunding bonds, the interest on the bonds and the principal of the bonds or both interest and principal as the authority may determine. Nothing in this section requires the establishment of an escrow if the refunded bonds become due and payable within one year from the date of the refunding bonds and if the amounts necessary to retire the refunded bonds within that time are deposited with the paying agent for the refunded bonds. Any such escrow shall not necessarily be limited to proceeds of refunding bonds but may include other money available for its purpose. Any proceeds in escrow pending such use may be invested or reinvested in bills, certificates of indebtedness, notes or bonds that are direct obligations of or the principal and interest of which obligations are unconditionally guaranteed by the United States of America or in certificates of deposit of banks that are members of the federal deposit insurance corporation, the par value of which certificates of deposit is collateralized by a pledge of obligations of or the payment of which is unconditionally guaranteed by the United States of America, the par value of which obligations is at least seventy-five percent of the par value of the certificates of deposit. Such proceeds and investments in escrow together with any interest or other income to be derived from any such investment shall be in an amount at all times sufficient as to principal, interest, any prior redemption premium due and any charges of the escrow agent payable therefrom to pay the bonds being refunded as they become due at their respective maturities or due at any designated prior redemption date or dates in connection with which the authority shall exercise a prior redemption option. Any purchaser of any refunding bond is in no manner responsible for the application of the proceeds thereof by the authority or any of its officers, agents or employees.

D. Refunding bonds may bear such additional terms and provisions as may be determined by the authority and the refunding bonds are not subject to the provisions of any other statute except as may be incorporated by reference in the County Water and Sanitation Authority Act.

Section 19. REFUNDING REVENUE BONDS--TERMS.--Refunding revenue bonds:

A. may have interest, appreciated principal value or any part thereof payable at intervals or at maturity as may be determined by the authority;

B. may be subject to prior redemption at the authority's option at such time or times and upon such terms and conditions with or without the payment of premium or premiums as may be determined by the authority;

C. may mature at any time or times not exceeding forty years after the date of issuance;

D. may be serial in form and maturity or may consist of a single bond payable in one or more installments or may be in such other form as may be determined by the authority; and

E. shall be exchanged for the bonds and any matured unpaid interest being refunded at not less than par or sold at public or negotiated sale at, above or below par and at a price that results in a net effective interest rate that does not exceed the maximum permitted by the Public Securities Act.

Section 20. REFUNDING REVENUE BONDS--RESOLUTION.--At any regular or special meeting called for the purpose of issuing refunding revenue bonds, the board by a two-thirds vote of all the members of the authority may adopt a resolution authorizing the issuance of the refunding revenue bonds.

Section 21. PUBLIC REGULATION COMMISSION JURISDICTION.--

A. An authority organized under the provisions of the County Water and Sanitation District Act is not subject to the jurisdiction of the public regulation commission or the terms and provisions of the Public Utility Act except as provided in Subsections B and C of this section.

B. The authority may elect by resolution adopted by its board to become subject to the jurisdiction of the public regulation commission and to the terms and provisions of the Public Utility Act; provided, however, that in no event shall Sections 62-9-1 through 62-9-7 NMSA 1978 apply to any authority making such an election.

C. If the board has not elected to become subject to the jurisdiction of the public regulation commission, the authority shall nevertheless file with the commission any rates, tolls and charges proposed by the board, which shall be subject to approval by the commission if twenty-five qualified electors or five percent of the qualified electors of the county, whichever is less, file a petition protesting the rates, tolls or charges with the commission within thirty days after the board proposes the rates. Upon the filing of such a petition, the commission shall hold a hearing pursuant to rules that it shall promulgate to implement this subsection.

Section 22. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2004.

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