Senate Bill No. 517
(By Senators Ross, Wiedebusch and Miller)
____________
[Introduced February 19, 1996; referred to the Committee
on Natural Resources; and then to the Committee on Finance
.]
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A BILL to amend chapter sixteen of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, by adding
thereto a new article, designated article thirteen-c,
relating to the establishment of the regional water
authority act; setting forth the purpose of the Legislature
to enable public agencies to join together to secure and
provide water for resale and other purposes or to join
together for the transportation and treatment of wastewater;
providing definitions; setting forth requirements for
agreements between public agencies; authorizing public
agencies to provide funds, personnel and services to
regional water authorities, regional wastewater authorities
and regional water and wastewater authorities and
authorizing agreements between public agencies and such
authorities; establishment of the authority as a
quasi-public corporation; establishing requirements for the governing board of such authority; requiring meetings and an
audit of the authority; establishing powers of the
authority; authorizing the sale of bonds for constructing or
acquiring water supply systems or for constructing or
acquiring wastewater transportation and treatment
facilities; authorizing items to be included as costs of
properties; providing that the bonds may be secured by trust
indenture; requiring the establishment of a sinking fund;
establishing enforcement provisions for bondholders;
establishing a statutory mortgage lien in favor of
bondholders; providing for the requirement that the
authority establish appropriate rates and charges for the
use of services rendered; and providing for partial
invalidity.
Be it enacted by the Legislature of West Virginia:
That chapter sixteen of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, be amended by
adding thereto a new article, designated article thirteen-c, to
read as follows:
ARTICLE 13C. REGIONAL WATER AND WASTEWATER AUTHORITY ACT.
§16-13C-1. Statement of purpose.
It is the purpose of this article, to permit certain public
agencies to make the most efficient use of their powers relating
to public water supplies and the transportation and treatment of
wastewater by enabling them to cooperate with other public agencies on a basis of mutual advantage and thereby to provide
services and facilities to participating public agencies and to
provide for the establishment for such purpose of a quasi-
governmental public corporation which shall be known as a
regional water authority, or where appropriate, a regional
wastewater authority, or regional water and wastewater authority.
The function of the regional water authority shall be to secure
a source of water on a scale larger than is feasible for
individual public agencies acting alone, and to sell such water
to public service districts, municipalities, publicly and
privately owned water utilities and others. The function of the
regional wastewater authority shall be to enable public agencies
to join together to provide the most economical method of
transportation and treatment of wastewater and to provide such
transportation and treatment services to public service
districts, municipalities, publicly and privately owned
wastewater utilities and others. The function of the regional
water and wastewater authority shall be to enable public agencies
to join together to carry out the joint functions of both
regional water authority and a regional wastewater authority.
§16-13C-2. Definitions.
For the purpose of this article:
(a) The term "authority" shall mean any regional water
authority, regional wastewater authority, or regional water and
wastewater authority organized pursuant to the provisions of this article; and
(b) The term "public agency" shall mean any municipality,
county, public service district or other political subdivision
of this state.
§16-13C-3. Joint exercise of powers by certain public agencies;
agreements among agencies, contents; submission to
public service commission; filing of agreement.
(a) Any powers, privileges or authority of a public agency
of this state relating to public water supplies, or the
transportation or treatment of wastewater, may be exercised
jointly with any other public agency of this state, or with any
agency of the United States to the extent that the laws of the
United States permit. Any agency of the state government when
acting jointly with any public or private agency may exercise all
of the powers, privileges and authority conferred by this article
upon a public agency.
(b) Any public agency may enter into agreements with one or
more other public agencies for the purpose of organizing a
regional water authority, regional wastewater authority, or
regional water and wastewater authority. Appropriate action by
ordinance, resolution or otherwise pursuant to law of the
governing bodies of the participating public agencies shall be
necessary before any such agreement may enter into force.
(c) Any such agreement shall specify the following:
(1) Its duration;
(2) The precise organization, composition and nature of the
authority created thereby together with the powers delegated
thereto;
(3) Its purpose or purposes;
(4) The manner of financing the authority and of
establishing and maintaining a budget therefor;
(5) The permissible methods for partial or complete
termination of the agreement and for disposing of property upon
such partial or complete termination;
(6) The manner of acquiring, holding and disposing of real
and personal property of the authority;
(7) Any other necessary and proper matters.
(d) Any such agreement may be amended to include additional
public agencies by consent of two-thirds of the signatories to
the agreement, if no terms of agreement are changed, otherwise a
new agreement with the new public agency shall be drawn. Where
fewer than three public agencies come together to form an
authority, both parties must consent to the amendment of the
agreement to include additional public agencies.
(e) Prior to taking effect, every agreement made hereunder
shall be submitted to the public service commission for its
approval as to form and as to compliance with the provisions of
this article. The public service commissioner's authority
hereunder is limited to the review stated in this paragraph and
it shall approve any agreement submitted hereunder unless it shall find that the agreement does not meet the conditions set
forth herein, in which case it shall detail in writing addressed
to the governing bodies of the public agencies concerned the
specific respects in which the proposed agreement fails to meet
the requirements of law. Failure to disapprove an agreement
submitted hereunder within thirty days of its submission shall
constitute approval thereof.
(f) Prior to taking effect, an agreement made hereunder
shall be filed with the clerk of the county commission of that
county, or counties, wherein the office, or offices, of the
authority is to be located and such agreement then also shall be
filed with the secretary of state, accompanied by a certificate
from the clerk of the county commission of the county, or
counties, where filed, stating that such agreement has been filed
in such county.
§16-13C-4. Furnishing of funds, personnel or services by certain
public agencies; agreements for purchase, sale,
distribution, transmission, transportation and
treatment of water or wastewater; terms and
conditions.
Any public agency entering into an agreement pursuant to
this article may appropriate funds and may sell, lease, give, or
otherwise supply to the authority created such personnel or
services for the operation of such authority as may be within its
legal power to furnish.
Any public agency, whether or not a party to an agreement
pursuant to this article and any publicly or privately owned
water distribution company may enter into contracts with any
regional water authority or regional water and wastewater
authority created pursuant to this article for the purchase of
water from such authority or the sale of water to the authority,
the treatment of water by either party and the distribution or
transmission of water by either party and any such authority may
enter into such contracts, subject to the prior approval of the
public service commission pursuant to the provisions of section
twelve, article two, chapter twenty-four of this code. Any
public agency, whether or not a party to an agreement pursuant to
this article, and any publicly or privately owned wastewater
transportation or treatment system may enter into contracts with
any regional wastewater authority or regional water and
wastewater authority created pursuant to this article for the
transportation or treatment of wastewater by either party and any
such authority may enter into such contracts, subject to the
prior approval of the public service commission pursuant to the
provisions of section twelve, article two of chapter twenty-four
of this code: Provided, That if the public service commission
has not acted on any such proposed contract within sixty days
of its filing, such approval shall be deemed to have been
granted. Any such contract may include an agreement for the
purchase of water not actually received or the treatment of wastewater not actually treated. No such contract shall be made
for a period in excess of forty years, but renewal options may be
included therein. The obligations of any public agency under any
such contract shall be payable solely from the revenues produced
from such public agency's water or wastewater system and the
public service commission, in the case of a public agency whose
rates are subject to its jurisdiction, shall permit the public
agency to recover through its rates revenues sufficient to meet
its obligations under such agreement.
§16-13C-5. Declaration of authority organization, when quasi-
governmental public corporation.
Upon the approval of the public service commission and
filing with the secretary of state, the secretary of state shall
declare the authority organized and give it the corporate name of
regional water authority number ______, regional wastewater
authority number ______ or regional water and wastewater
authority number ______, whichever is appropriate. Thereupon the
authority shall be a quasi-governmental public corporation.
§16-13C-6. Governing body; appointments; terms of members.
The governing body of the authority shall consist of:
(a) At least one and not more than two members appointed by
each participating public agency and each such representative's
full term shall be not less than one year nor more than four
years and initial terms shall be staggered in accordance with
procedures set forth in the agreement provided for in section three of this article and amendments thereto; or
(b) Not less than three persons selected by the
participating public agencies and the manner of selection of such
governing body and terms of office shall be set forth in the
agreement provided for in section three of this article and
amendments thereto. The governing body of the authority shall
elect one of its members as president, one as treasurer and one
as secretary.
§16-13C-7. Meetings of governing body; annual audit.
The governing body of the authority shall meet as often as
the needs of the authority require. The governing body shall
cause to be made an annual audit of the financial records of the
authority, the cost of said audit to be paid by the authority.
§16-13C-8. Powers of governing body.
For the purpose of providing a water supply, transportation
facilities or treatment system to the participating public
agencies, and others, the governing body of the authority shall
have the following powers, authorities and privileges.
(1) To accept by gift or grant from any person, firm,
corporation, trust or foundation, or from this state or any other
state or any political subdivision or municipality thereof, or
from the United States, any funds or property or any interest
therein for the uses and purposes of the authority and to hold
title thereto in trust or otherwise and to bind the authority to
apply the same according to the terms of such gift or grant;
(2) To sue and be sued;
(3) To enter into franchises, contracts and agreements with
this or any other state or the United States or any municipality,
political subdivision or authority thereof, or any of their
agencies or instrumentalities or any public or private person,
partnership, association or corporation of this state or of any
other state or the United States and this state and any such
municipality, political subdivision, authority or any of their
agencies or instrumentalities and any such public or private
person, partnership, association or corporation is hereby
authorized to enter into contracts and agreements with such
authority for any term not exceeding forty years for the
planning, development, construction, acquisition or operation of
any facility or for any service rendered to, for, or by said
authority;
(4) To borrow money and evidence the same by warrants, notes
or bonds as hereinafter provided in this article and to refund
the same by the issuance of refunding obligations;
(5) To acquire land and interests in land by gift, purchase,
exchange or eminent domain, such power of eminent domain to be
exercised within or without the boundaries of the authority in
accordance with provisions of article two, chapter fifty-four of
this code;
(6) To acquire by purchase or lease, construct, install and
operate reservoirs, pipelines, wells, check dams, pumping stations, water purification plants and other facilities for the
production, distribution and utilization of water and
transportation facilities, pump stations, lift stations,
treatment facilities and other facilities for the transportation
and treatment of wastewater and to own and hold such real and
personal property as may be necessary to carry out the
purposes of its organization, subject to the advance approval
of the public service commission for any proposed acquisition,
construction, installation or operation: Provided, That the
public service commission shall act on all proposals submitted
under this paragraph within one hundred and twenty days of filing
with the commission: Provided, however, That if the public
service commission has not acted within such period of time,
approval of such proposal shall be deemed granted;
(7) To have the general management, control and supervision
of all the business, affairs, property and facilities of the
authority and of the construction, installation, operation and
maintenance of authority improvements and to establish
regulations relating thereto;
(8) To hire and retain agents, employees, engineers and
attorneys and to determine their compensation. The governing
body shall select and appoint a general manager of the authority
who shall serve at the pleasure of said governing body. The
general manager shall have training and experience in the
supervision and administration of the system or systems operated by the authority and shall manage and control the system under
the general supervision of said governing body. All employees,
servants and agents of the authority shall be under the immediate
control and management of said general manager. The general
manager shall perform all such other duties as may be prescribed
by said governing body and shall give the governing body a good
and sufficient surety company bond in a sum to be set and
approved by the governing body conditioned upon the satisfactory
performance of the general manager's duties. The governing body
may also require that any other employees be bonded in such
amount as it shall determine. The cost of said bonds shall be
paid out of the funds of the authority;
(9) To adopt and amend rules not in conflict with the
constitution and laws of this state, necessary for the carrying
on of the business, objects and affairs of the governing body and
of the authority;
(10) To have and exercise all rights and powers necessary
or incidental to or implied from the specific powers granted
herein. Such specific powers shall not be considered as a
limitation upon any power necessary or appropriate to carry out
the purposes of this article.
§16-13C-9. Revenue bonds.
For constructing or acquiring any water supply, wastewater
transportation, or treatment system for the authorized purposes
of the authority, or necessary or incidental thereto, and for constructing improvements and extensions thereto, and also for
reimbursing or paying the costs and expenses of creating the
authority, the governing body of any such authority is hereby
authorized to borrow money from time to time and in evidence
thereof issue the revenue bonds of such authority. Such revenue
bonds are hereby made a lien on the revenues produced from the
operation of such supply system, but shall not be general
obligations of the public agencies participating in the
agreement. All revenue bonds issued under this article shall be
signed by the president of the governing body of the authority
and attested by the secretary of the governing body of the
authority and shall contain recitals stating the authority under
which such bonds are issued and that they are to be paid by the
authority from the net revenue derived from the operation of the
authority's system and not from any other fund or source and that
said bonds are negotiable and payable solely from the revenues
derived from the operation of the system under control of the
authority: Provided, That in the case of a regional water and
wastewater authority, the statutory lien created hereby shall
only be a lien on the revenues of that service funded by the
proceeds of the sale of the bonds, it being understood that such
combined authority shall maintain separate books and records for
its water and wastewater operations. Such bonds may be issued in
one or more series, may bear such date or dates, may mature at
such time or times not exceeding forty years from their respective dates, may bear interest at such rate or rates not
exceeding eighteen percent per annum payable at such times, may
be in such form, may carry such registration privileges, may be
executed in such manner, may be payable at such place or places,
may be subject to such terms to redemption with or without
premium, may be declared or become due before maturity date
thereof, may be authenticated in any manner, and upon compliance
with such conditions, and may contain such terms and covenants as
may be provided by resolution or resolutions of the governing
body of such authority. Notwithstanding the form or tenor
thereof, and in the absence of any express recital on the face
thereof, that the bond is nonnegotiable, all such bonds shall be,
and shall be treated as, negotiable instruments for all purposes.
Bonds bearing the signatures of officers in office on the date of
the signing thereof shall be valid and binding for all purposes
notwithstanding that before the delivery thereof any or all of
the persons whose signatures appear thereon shall have ceased to
be such officers. Notwithstanding the requirements or provisions
of any other law, any such bonds may be negotiated or sold in
such manner and at such time or times as is found by the
governing body to be most advantageous, and all such bonds may be
sold at such price that the interest cost of the proceeds
therefrom does not exceed nineteen percent per annum, based on
the average maturity of such bonds and computed according to
standard tables of bond values. Any resolution or resolutions providing for the issuance of such bonds may contain such
covenants and restrictions upon the issuance of additional bonds
thereafter as may be deemed necessary or advisable for the
assurance of the payment of the bonds thereby authorized.
§16-13C-10. Items included in cost of properties.
The cost of any water supply, wastewater transportation or
treatment system acquired or constructed under the provisions of
this article shall be deemed to include the cost of the
acquisition or construction thereof, the cost of all property
rights, easements and franchises deemed necessary or convenient
therefor and for the improvements and extensions thereto;
interest upon bonds prior to and during construction or
acquisition and for six months after completion of construction
or of acquisition of the improvements and extensions;
engineering, fiscal agents and legal expenses; expenses for
estimates of cost and of revenues, expenses for plans,
specifications and survey; other expenses necessary or incident
to determining the feasibility or practicability of the
enterprise, administrative expense, and such other expenses as
may be necessary or incident to the financing herein authorized,
and the construction or acquisition of the properties and the
placing of same in operation, and the performance of the things
herein required or permitted, in connection with any thereof.
§16-13C-11. Bonds may be secured by trust indenture.
In the discretion and at the option of the governing body of the authority, such bonds may be secured by a trust indenture by
and between the authority and a corporate trustee, which may be
a trust company or bank having powers of a trust company within
or without the state of West Virginia, but no such trust
indenture shall convey, mortgage or create any lien upon the
water supply, wastewater transportation or treatment system or
any part thereof of the authority or its member public agencies.
The resolution authorizing the bonds and fixing the details
thereof may provide that such trust indenture may contain such
provisions for protecting and enforcing the rights and remedies
of bondholders as may be reasonable and proper, not in violation
of law, including covenants setting forth the duties of the
authority and the members of its governing body and officers in
relation to the construction or acquisition of the water supply,
wastewater transportation or treatment system and the
improvement, extension, operation, repair, maintenance and
insurance thereof, and the custody, safeguarding and application
of all moneys, and may provide that all or any part of the
construction work shall be contracted for, constructed and paid
for, under the supervision and approval of consulting engineers
employed or designated by the governing body and satisfactory to
the original bond purchaser, their successors, assignees or
nominees, who may be given the right to require the security
given by contractors and by any depository of the proceeds of
bonds or revenues of the water supply, wastewater transportation or treatment system or other money pertaining thereto be
satisfactory to such purchaser, their successors, assignees or
nominees. Such indenture may set forth the rights and remedies
of the bondholders and such trustee.
§16-13C-12. Sinking fund for revenue bonds.
At or before the time of the issuance of any bonds under
this article the governing body of the authority shall by
resolution or in the trust indenture provide for the creation of
a sinking fund and for monthly payments into such fund from the
revenues of the water supply, wastewater transportation or
treatment system operated by the authority such sums in excess of
the cost of maintenance and operation of such properties as will
be sufficient to pay the accruing interest and retire the bonds
at or before the time each will respectively become due and to
establish and maintain reserves therefor. All sums which are or
should be, in accordance with such provisions, paid into such
sinking fund shall be used solely for payment of interest and for
the retirement of such bonds at or prior to maturity as may be
provided or required by such resolutions.
§16-13C-13. Collection, etc., of revenues and enforcement of
covenants; default; suit, etc., by bondholder or
trustee to compel performance of duties;
appointment and powers of receiver.
The governing body of any such authority shall have power to
insert enforceable provisions in any resolution authorizing the issuance of bonds relating to the collection, custody and
application of revenues of the authority from the operation of
the water supply, wastewater transportation or treatment system
under its control and to the enforcement of the covenants and
undertakings of the authority. In the event there shall be
default in the sinking fund provisions aforesaid or in the
payment of the principal or interest on any of such bonds or, in
the event the authority or its governing body or any of its
officers, agents or employees, shall fail or refuse to comply
with the provisions of this article, or shall default in any
covenant or agreement made with respect to the issuance of such
bonds or offered as security therefor, then any holder or holders
of such bonds and any such trustee under the trust indenture, if
there be one, shall have the right by suit, action, mandamus or
other proceeding instituted in the circuit court for the county
or any of the counties wherein the authority extends, or in any
other court of competent jurisdiction, to enforce and compel
performance of all duties required by this article or undertaken
by the authority in connection with the issuance of such bonds,
and upon application of any such holder or holders, or such
trustee, such court shall, upon proof of such defaults, appoint
a receiver for the affairs of the authority and its properties,
which receiver so appointed shall forthwith directly, or by his
or her agents and attorneys, enter into and upon and take
possession of the affairs of the authority and each and every part thereof, and hold, use, operate, manage and control the
same, and in the name of the authority exercise all of the rights
and powers of such authority as shall be deemed expedient, and
such receiver shall have power and authority to collect and
receive all revenues and apply same in such manner as the court
shall direct. Whenever the default causing the appointment of
such receiver shall have been cleared and fully discharged and
all other defaults shall have been cured, the court may in its
discretion and after such notice and hearing as it deems
reasonable and proper direct the receiver to surrender possession
of the affairs of the authority to its governing body. Such
receiver so appointed shall have no power to sell, assign,
mortgage, or otherwise dispose of any assets of the authority
except as hereinbefore provided.
§16-13C-14. Statutory mortgage lien created; foreclosure
thereof.
There shall be and is hereby created a statutory mortgage
lien upon such water supply, wastewater transportation or
treatment system of the authority, which shall exist in favor of
the holders of bonds hereby authorized to be issued, and each of
them, and the coupons attached to said bonds, and such water
supply system shall remain subject to such statutory mortgage
lien until payment in full of all principal of and interest on
such bonds. Any holder of such bonds, of any coupons attached
thereto, may either at law or in equity, enforce said statutory mortgage lien conferred hereby and upon default in the payment of
the principal of or interest on said bonds, may foreclose such
statutory mortgage lien in the manner now provided by the laws of
the state of West Virginia for the foreclosure of mortgages on
real property.
§16-13C-15. Rates and charges.
The governing body shall by appropriate resolution make
provisions for the payment of said bonds by fixing rates, fees
and charges, for the use of all services rendered by such
authority, which rates, fees and charges shall be sufficient to
pay the costs of operation, improvement and maintenance of the
authority's water supply or wastewater transportation and
treatment system, to provide an adequate depreciation fund,
provide an adequate sinking fund to retire said bonds and pay
interest thereon when due, and to create reasonable reserves for
such purposes. Said fees, rates or charges shall be sufficient
to allow for miscellaneous and emergency or unforeseen expenses.
The resolution of the governing body authorizing the issuance of
revenue bonds may include agreements, covenants or restrictions
deemed necessary or advisable by the governing body to effect the
efficient operation of the system and to safeguard the interests
of the holders of the revenue bonds and to secure the payment of
the bonds and the interest thereon.
§16-13C-16. Invalidity of part.
If any section or sections of this article be declared unconstitutional or invalid, this shall not invalidate any other
section of this article.
§16-13C-17. Citation of act.
This act may be known and cited as the "Regional Water
Authority Act."
NOTE: The purpose of this bill is to create the Regional
Water Authority Act, to authorize public agencies to join
together to construct and acquire water sources for the sale of
water and for the construction and acquisition of wastewater
transportation and treatment systems and authorizing the issuance
of bonds by such authority to fund the projects of the authority.
This article is new; therefore, strike-throughs and
underscoring have been omitted.