Florida Senate - 2015 COMMITTEE AMENDMENT Bill No. SB 1102 Ì663596UÎ663596 LEGISLATIVE ACTION Senate . House Comm: RCS . 03/24/2015 . . . . ————————————————————————————————————————————————————————————————— ————————————————————————————————————————————————————————————————— The Committee on Communications, Energy, and Public Utilities (Hukill) recommended the following: 1 Senate Amendment 2 3 Delete lines 101 - 367 4 and insert: 5 (c) “Customer” means a person receiving water or wastewater 6 service from a publicly owned utility. 7 (d) “Finance” or “financing” includes refinancing. 8 (e) “Financing cost” means: 9 1. Interest and redemption premiums that are payable on 10 utility cost containment bonds; 11 2. The cost of retiring the principal of utility cost 12 containment bonds, whether at maturity, including acceleration 13 of maturity upon an event of default, or upon redemption, 14 including sinking fund redemption; 15 3. The cost related to issuing or servicing utility cost 16 containment bonds, including any payment under an interest rate 17 swap agreement and any type of fee; 18 4. A payment or expense associated with a bond insurance 19 policy; financial guaranty; contract, agreement, or other credit 20 or liquidity enhancement for bonds; or contract, agreement, or 21 other financial agreement entered into in connection with 22 utility cost containment bonds; 23 5. Any coverage charges; or 24 6. The funding of one or more reserve accounts relating to 25 utility cost containment bonds. 26 (f) “Financing resolution” means a resolution adopted by 27 the governing body of an authority that provides for the 28 financing or refinancing of a utility project with utility cost 29 containment bonds and that imposes a utility project charge in 30 connection with the utility cost containment bonds in accordance 31 with subsection (4). A financing resolution may be separate from 32 a resolution authorizing the issuance of the bonds. 33 (g) “Governing body” means the body that governs a local 34 agency. 35 (h) “Local agency” means a member of the authority, or an 36 agency or subdivision of that member, that is sponsoring or 37 refinancing a utility project, or any municipality, county, 38 authority, special district, public corporation, regional water 39 authority, or other governmental entity of the state that is 40 sponsoring or refinancing a utility project. 41 (i) “Public utility services” means water or wastewater 42 services provided by a publicly owned utility. The term does not 43 include communications services, as defined in s. 202.11, 44 Florida Statutes, Internet access services, or information 45 services. 46 (j) “Publicly owned utility” means a utility providing 47 retail or wholesale water or wastewater services that is owned 48 and operated by a local agency. The term includes any successor 49 to the powers and functions of such a utility. 50 (k) “Revenue” means income and receipts of the authority 51 related to the financing of utility projects and issuance of 52 utility cost containment bonds, including any of the following: 53 1. Bond purchase agreements; 54 2. Bonds acquired by the authority; 55 3. Installment sales agreements and other revenue-producing 56 agreements entered into by the authority; 57 4. Utility projects financed or refinanced by the 58 authority; 59 5. Grants and other sources of income; 60 6. Moneys paid by a local agency; 61 7. Interlocal agreements with a local agency, including all 62 service agreements; or 63 8. Interest or other income from any investment of money in 64 any fund or account established for the payment of principal, 65 interest, or premiums on utility cost containment bonds, or the 66 deposit of proceeds of utility cost containment bonds. 67 (l) “Utility cost containment bonds” means bonds, notes, 68 commercial paper, variable rate securities, and any other 69 evidence of indebtedness issued by an authority the proceeds of 70 which are used directly or indirectly to pay or reimburse a 71 local agency or its publicly owned utility for the costs of a 72 utility project and which are secured by a pledge of, and are 73 payable from, utility project property. 74 (m) “Utility project” means the acquisition, construction, 75 installation, retrofitting, rebuilding, or other addition to or 76 improvement of any equipment, device, structure, process, 77 facility, technology, rights, or property located within or 78 outside this state which is used in connection with the 79 operations of a publicly owned utility. 80 (n) “Utility project charge” means a charge levied on 81 customers of a publicly owned utility to pay the financing costs 82 of utility cost containment bonds issued under subsection (4). 83 The term includes any adjustments to the utility project charge 84 under subsection (5). 85 (o) “Utility project property” means the property right 86 created pursuant to subsection (6). The term does not include 87 any interest in a customer’s real or personal property but 88 includes the right, title, and interest of an authority in any 89 of the following: 90 1. The financing resolution, the utility project charge, 91 and any adjustment to the utility project charge established in 92 accordance with subsection (5); 93 2. The financing costs of the utility cost containment 94 bonds and all revenues, and all collections, claims, payments, 95 moneys, or proceeds for, or arising from, the utility project 96 charge; or 97 3. All rights to obtain adjustments to the utility project 98 charge pursuant to subsection (5). 99 (3) UTILITY PROJECTS.— 100 (a) A local agency that owns and operates a publicly owned 101 utility may apply to an authority to finance the costs of a 102 utility project using the proceeds of utility cost containment 103 bonds. In its application to the authority, the local agency 104 shall specify the utility project to be financed by the utility 105 cost containment bonds and the maximum principal amount, the 106 maximum interest rate, and the maximum stated terms of the 107 utility cost containment bonds. 108 (b) A local agency may not apply to an authority for the 109 financing of a utility project under this section unless the 110 governing body has determined, in a duly noticed public meeting, 111 all of the following: 112 1. The project to be financed is a utility project. 113 2. The local agency will finance costs of the utility 114 project, and the costs associated with the financing will be 115 paid from utility project property, including the utility 116 project charge for the utility cost containment bonds. 117 3. Based on the best information available to the governing 118 body, the rates charged to the local agency’s retail customers 119 by the publicly owned utility, including the utility project 120 charge resulting from the financing of the utility project with 121 utility cost containment bonds, are expected to be lower than 122 the rates that would be charged if the project were financed 123 with bonds payable from revenues of the publicly owned utility. 124 (c) A determination by the governing body that a project to 125 be financed with utility cost containment bonds is a utility 126 project is final and conclusive, and the utility cost 127 containment bonds issued to finance the utility project and the 128 utility project charge shall be valid and enforceable as set 129 forth in the financing resolution and the documents relating to 130 the utility cost containment bonds. 131 (d) If a local agency that has outstanding utility cost 132 containment bonds ceases to operate a water or wastewater 133 utility, directly or through its publicly owned utility, 134 references in this section to the local agency or to its 135 publicly owned utility shall be to the successor entity. The 136 successor entity shall assume and perform all obligations of the 137 local agency and its publicly owned utility required by this 138 section and shall assume the servicing agreement required under 139 subsection (4) while the utility cost containment bonds remain 140 outstanding. 141 (4) FINANCING UTILITY PROJECTS.— 142 (a) An authority may issue utility cost containment bonds 143 to finance or refinance utility projects; refinance debt of a 144 local agency incurred in financing or refinancing utility 145 projects, provided such refinancing results in present value 146 savings to the local agency; or, with the approval of the local 147 agency, refinance previously issued utility cost containment 148 bonds. 149 1. To finance a utility project, the authority may: 150 a. Form a single-purpose limited liability company and 151 authorize the company to adopt the financing resolution of such 152 utility project; or 153 b. Create a new single-purpose entity by interlocal 154 agreement under s. 163.01, Florida Statutes, the membership of 155 which shall consist of the authority and two or more of its 156 members or other public agencies. 157 2. A single-purpose limited liability company or a single 158 purpose entity may be created by the authority solely for the 159 purpose of performing the duties and responsibilities of the 160 authority specified in this section and shall constitute an 161 authority for all purposes of this section. Reference to the 162 authority includes a company or entity created under this 163 paragraph. 164 (b) The governing body of an authority that is financing 165 the costs of a utility project shall adopt a financing 166 resolution and shall impose a utility project charge as 167 described in subsection (5). All provisions of a financing 168 resolution adopted pursuant to this section are binding on the 169 authority. 170 1. The financing resolution must: 171 a. Provide a brief description of the financial calculation 172 method the authority will use in determining the utility project 173 charge. The calculation method shall include a periodic 174 adjustment methodology to be applied at least annually to the 175 utility project charge. The authority shall establish the 176 allocation of the utility project charge among classes of 177 customers of the publicly owned utility. The decision of the 178 authority shall be final and conclusive, and the method of 179 calculating the utility project charge and the periodic 180 adjustment may not be changed; 181 b. Require each customer in the class or classes of 182 customers specified in the financing resolution who receives 183 water or wastewater service through the publicly owned utility 184 to pay the utility project charge regardless of whether the 185 customer has an agreement to receive water or wastewater service 186 from a person other than the publicly owned utility; 187 c. Require that the utility project charge be charged 188 separately from other charges on the bill of customers of the 189 publicly owned utility in the class or classes of customers 190 specified in the financing resolution; and 191 d. Require that the authority enter into a servicing 192 agreement with the local agency or its publicly owned utility to 193 collect the utility project charge. 194 2. The authority may require in the financing resolution 195 that, in the event of a default by the local agency or its 196 publicly owned utility with respect to revenues from the utility 197 project property, the authority, upon application by the 198 beneficiaries of the statutory lien as set forth in subsection 199 (6), shall order the sequestration and payment to the 200 beneficiaries of revenues arising from utility project property. 201 This subparagraph does not limit any other remedies available to 202 the beneficiaries by reason of default. 203 (c) An authority has all the powers provided in this 204 section and s. 163.01(7)(g), Florida Statutes. 205 (d) Each authority shall work with local agencies that 206 request assistance to determine the most cost-effective manner 207 of financing regional water projects. If the entities determine 208 that the issuance of utility cost containment bonds will result 209 in lower financing costs for a project, the authority shall 210 cooperate with such local agencies and, if requested by the 211 local agencies, issue utility cost containment bonds as provided 212 in this section. 213 (5) UTILITY PROJECT CHARGE.— 214 (a) The authority shall impose a sufficient utility project 215 charge, based on estimates of water or wastewater service usage, 216 to ensure timely payment of all financing costs with respect to 217 utility cost containment bonds. The local agency or its publicly 218 owned utility shall provide the authority with information 219 concerning the publicly owned utility which may be required by 220 the authority in establishing the utility project charge. 221 (b) The utility project charge is a nonbypassable charge to 222 all present and future customers of the publicly owned utility 223 in the class or classes of customers specified in the financing 224 resolution upon its adoption. If a customer of a publicly owned 225 utility that is subject to a utility project charge enters into 226 an agreement to purchase water or wastewater service from a 227 supplier other than the publicly owned utility, the customer 228 remains liable for the payment of the utility project charge if 229 the customer has received any service or benefit from the 230 publicly owned utility after the date the utility project charge 231 was imposed. 232 (c) The authority shall determine at least annually and at 233 such additional intervals as provided in the financing 234 resolution and documents related to the applicable utility cost 235 containment bonds whether adjustments to the utility project 236 charge are required. The authority shall use the adjustment to 237 correct for any overcollection or undercollection of financing 238 costs from the utility project charge or to make any other 239 adjustment necessary to ensure the timely payment of the 240 financing costs of the utility cost containment bonds, including 241 adjustment of the utility project charge to pay any debt service 242 coverage requirement for the utility cost containment bonds. The 243 local agency or its publicly owned utility shall provide the 244 authority with information concerning the publicly owned utility 245 which may be required by the authority in adjusting the utility 246 project charge. 247 1. If the authority determines that an adjustment to the 248 utility project charge is required, the adjustment shall be made 249 using the methodology specified in the financing resolution. 250 2. The adjustment may not impose the utility project charge 251 on a class of customers that was not subject to the utility 252 project charge pursuant to the financing resolution imposing the 253 utility project charge. 254 (d) Revenues from a utility project charge are special 255 revenues of the authority and do not constitute revenue of the 256 local agency or its publicly owned utility for any purpose, 257 including any dedication, commitment, or pledge of revenue, 258 receipts, or other income that the local agency or its publicly 259 owned utility has made or will make for the security of any of 260 its obligations. 261 (e) The local agency or its publicly owned utility shall 262 act as a servicing agent for collecting the utility project 263 charge throughout the duration of the servicing agreement 264 required by the financing resolution. The local agency or its 265 publicly owned utility shall hold the money collected in trust 266 for the exclusive benefit of the persons entitled to have the 267 financing costs paid from the utility project charge, and the 268 money does not lose its designation as revenues of the authority 269 by virtue of possession by the local agency or its publicly 270 owned utility. 271 (f) The customer must make timely and complete payment of 272 all utility project charges as a condition of receiving water or 273 wastewater service from the publicly owned