82R21659 SLB-F
By: Uresti S.B. No. 1898
A BILL TO BE ENTITLED
AN ACT
relating to the appointment of a conservator for and authorizing
the dissolution of the Bexar Metropolitan Water District; providing
a penalty.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
ARTICLE 1. CONSERVATORSHIP ESTABLISHED
SECTION 1.01. Section 1, Chapter 306, Acts of the 49th
Legislature, Regular Session, 1945, is amended to read as follows:
Sec. 1. In obedience to the provisions of Article 16,
Section 59 of the Constitution of Texas, there is hereby created
Bexar Metropolitan Water District.[, hereinafter in this Act
sometimes called the "District."]
SECTION 1.02. Chapter 306, Acts of the 49th Legislature,
Regular Session, 1945, is amended by adding Sections 1A, 34, 35, 36,
37, 38, and 39 to read as follows:
Sec. 1A. In this Act:
(1) "Board" means the District's Board of Directors.
(2) "Commission" means the Texas Commission on
Environmental Quality.
(3) "Committee" means the Bexar Metropolitan Water
District Oversight Committee.
(4) "Director" means a Board member.
(5) "District" means the Bexar Metropolitan Water
District.
(6) "System" means a water utility owned by a
municipality with a population of more than one million in the area
served by the District.
Sec. 34. (a) The Commission shall appoint as conservator
for the District an individual who, at the time of the individual's
appointment:
(1) has demonstrated a high level of expertise in
water utility management;
(2) is not a Director; and
(3) has no financial interest in the District or any
entity that has a contract with the District or that is likely to
develop a contractual relationship with the District.
(b) The conservator's term expires on the date the
Commission determines that the duties of the conservator under this
Act have been discharged.
Sec. 35. (a) The conservator shall use District staff to
carry out the duties assigned to the conservator. The conservator
may hire up to three additional persons who will report to and
assist the conservator if:
(1) assistance from District staff is not provided; or
(2) the conservator needs special expertise from one
or more of the persons.
(b) A conservator appointed under Section 34 of this Act and
any additional persons hired by the conservator under this section
are entitled to receive a salary determined by the executive
director of the Commission for performing those duties.
(c) The District shall pay the compensation of the
conservator and any additional persons hired by the conservator
under this section.
(d) The executive director of the Commission shall set the
compensation of the conservator after considering the
conservator's:
(1) level of expertise in water utility management;
and
(2) certifications and education.
Sec. 36. (a) A conservator appointed under Section 34 and
the persons hired under Section 35 of this Act are entitled to
reimbursement of the reasonable and necessary expenses incurred by
the conservator or the persons hired under Section 35 of this Act in
the course of performing duties under this Act.
(b) The District shall pay the expenses incurred by the
conservator and the persons hired under Section 35 of this Act. The
executive director of the Commission shall determine if an expense
is reasonable and necessary after considering whether the expense
is:
(1) necessary to complete the duties of the
conservator as assigned by law;
(2) at or below the cost of a similar expense incurred
by other utilities;
(3) documented by an invoice, bill, or work order that
includes details relating to the:
(A) time spent on services; or
(B) cost of supplies; and
(4) in accordance with procedures used to minimize
expenses, including comparing vendor rates or competitive bidding.
Sec. 37. (a) The Board shall work cooperatively with the
conservator to identify the policies, assets, liabilities, and
resources of the District.
(b) The conservator shall:
(1) complete an inventory of and evaluate each
distinct water system in the District to determine:
(A) the District's basis in, or the intrinsic
value of, the infrastructure associated with that water system;
(B) the District's bonded debt and commercial
paper reasonably associated with or allocable to the infrastructure
in that water system; and
(C) the adequacy of the water supply sources,
water storage facilities, and distribution systems located in that
water system's service area to supply current and projected demands
in that service area;
(2) identify any District assets whose transfer to
another appropriate public water utility would be likely to
improve:
(A) service to the former customers of the
District who would be served by that utility; or
(B) the District's overall efficiency;
(3) compile a list and copies of existing contracts to
which the District is a party, including for each contract:
(A) effective and termination dates;
(B) general scope of the property and services
involved;
(C) obligations of the District, including
financial obligations;
(D) how the District benefits from the contract;
and
(E) whether the District has waived governmental
immunity;
(4) compile a list of the following in regard to the
District:
(A) property;
(B) rights, including certificates of
convenience and necessity, pumping rights, and any other rights;
(C) staff; and
(D) internal policies, including employment
rules, benefits, and an evaluation of the usefulness and efficacy
of each policy;
(5) develop a comprehensive rehabilitation plan for
the District that:
(A) identifies strategies for restoring the
District's financial integrity and developing a system of sound
financial management;
(B) describes a standard of ethics,
professionalism, and openness expected of each Director and
employee of the District;
(C) provides a mechanism to enforce compliance
with District policies, including procurement policies;
(D) identifies ways to enhance the District's
operational efficiency and improve the District's provision of
redundancy in water services; and
(E) provides for educating the Board and
management personnel on improving management practices and
complying with District policy and state and federal laws and
regulations; and
(6) assess the District's ability to provide reliable,
cost-effective, quality service to customers, including an
assessment of operations compared to the best management practices
of modern utilities.
Sec. 38. The conservator shall report to the Commission and
the Committee quarterly, or as requested by the Commission or
Committee, on the progress the conservator has made in carrying out
the duties under Section 37 of this Act.
Sec. 39. At the conservator's request, the state auditor's
office may audit the District under Chapter 321, Government Code.
The District shall reimburse the state auditor's office for the
cost of the audit.
SECTION 1.03. Not later than the 60th day after the
effective date of this Act, the Texas Commission on Environmental
Quality shall appoint a conservator for the Bexar Metropolitan
Water District as required by Section 34, Chapter 306, Acts of the
49th Legislature, Regular Session, 1945, as added by this Act.
ARTICLE 2. ELECTION; EFFECTIVE DATE OF ARTICLE 3
SECTION 2.01. (a) In this article:
(1) "Commission" means the Texas Commission on
Environmental Quality.
(2) "District" means the Bexar Metropolitan Water
District.
(b) On the next uniform election date the commission, after
consultation with the secretary of state, shall hold an election in
the district on the question of dissolving the district and
disposing of the district's assets and obligations.
(c) The commission may contract with one or more entities to
conduct the election. The district shall pay any cost of conducting
the election.
(d) The order calling the election must state:
(1) the nature of the election, including the
proposition to appear on the ballot;
(2) the date of the election;
(3) the hours during which the polls will be open; and
(4) the location of the polling places.
(e) The commission shall give notice of an election under
this section by publishing once a week for two consecutive weeks a
substantial copy of the election order in a newspaper with general
circulation in the district. The first publication of the notice
must appear not later than the 35th day before the date of the
beginning of early voting for the election.
(f) The ballot for an election under this section must be
printed to permit voting for or against the proposition: "The
dissolution of the Bexar Metropolitan Water District and the
transfer of all the District's assets, obligations, and duties to
the water utility owned by the municipality with the largest
population in the area served by the District."
(g) The commission shall certify that a majority of the
voters voting in the district have voted:
(1) in favor of dissolution; or
(2) not in favor of dissolution.
SECTION 2.02. (a) Not later than the 20th day after the
date on which the election results are officially declared, the
commission shall certify that result to the secretary of state.
(b) If the proposition is approved by a majority of the
voters voting in the election, Article 3 of this Act takes effect on
the date the results are certified.
(c) If a majority of the voters voting in the election do not
approve the proposition, Article 3 of this Act does not take effect.
ARTICLE 3. TRANSFER OF DISTRICT ASSETS AND LIABILITIES IF VOTERS
DISSOLVE THE BEXAR METROPOLITAN WATER DISTRICT UNDER ARTICLE 2
SECTION 3.01. Chapter 306, Acts of the 49th Legislature,
Regular Session, 1945, is amended by adding Sections 50, 51, 52, 53,
54, 55, 56, 57, and 58 to read as follows:
Sec. 50. (a) The term of each person who is serving as a
Director of the District on the date the election results are
certified to the Secretary of State as authorized by Article 2 of
the Act enacting this section expires on that date.
(b) On the date the election results are certified to the
Secretary of State, the System assumes control of the operation and
management of the District, except as provided by Sections 51 and 52
of this Act and other law applicable to the System.
(c) Not later than the 90th day after the date the election
results are certified to the Secretary of State, the conservator,
under the oversight of the Commission and the Committee, shall
transfer or assign the:
(1) rights and duties of the District, including
existing contracts, assets, and obligations of the District;
(2) files, records, and accounts of the District,
including those that pertain to the control, finances, management,
and operation of the District; and
(3) permits, approvals, and certificates necessary to
provide water services.
(d) To the extent that the transfer of an item listed in
Subsection (c) of this section requires the approval of a state
agency, the state agency shall grant approval without additional
notice or hearing.
(e) After the conservator has transferred the property,
assets, and liabilities as prescribed by this section, the
conservator shall file a written report with the Commission and the
Committee summarizing the conservator's actions in dissolving the
District.
(f) Not later than the 60th day after the date the
Commission receives the report and determines that the requirements
of this section have been fulfilled, the Commission shall enter an
order dissolving the District and releasing the conservator from
any further duty or obligation.
Sec. 51. (a) Not later than five years after the date the
election results were certified in favor of dissolution under
Article 2 of the Act enacting this section, the System shall
integrate the services and infrastructure of the District into the
System in a reasonable and orderly manner based on the
consideration of relevant information, including:
(1) the location and condition of the infrastructure;
(2) debt obligations;
(3) prudent utility practices and fiscal policies;
(4) costs and revenue; and
(5) potential impacts on the customers of the District
and the System.
(b) During the integration period described by Subsection
(a) of this section, the System shall provide an annual report on
the progress of integration to the Commission. The Commission for
good cause may grant an extension to complete integration of not
more than three additional years.
(c) Until the date specified in Subsection (a) of this
section, the System may operate the former District as a special
project under the System's existing senior lien revenue bond
ordinances.
(d) Once the conservator has transferred the assets,
obligations, and duties to the System, the System shall provide
affordable and reliable water services to all of the former
ratepayers of the District under the System's certificate of
convenience and necessity.
(e) After the integration described by Subsection (a) of
this section is complete, the System shall provide water service to
former ratepayers of the District in the same manner the System
provides water service to other ratepayers of the System. The
integration is considered complete if:
(1) the areas of service located in the former
District are no longer operated as a special project within the
System;
(2) the ratepayers of the former District pay the same
rates for services provided by the System as other similarly
situated ratepayers of the System; and
(3) the ratepayers of the former District receive
water service that meets the requirements of the Commission.
(f) If the System fails to integrate the services and
infrastructure of the District into the System in accordance with
Subsection (a) of this section, the Commission may find the System
in violation of the obligation under the System's certificate of
convenience and necessity to provide continuous and adequate
service. The Commission may bring an enforcement action against
the System, including the imposition of an administrative penalty
under Section 13.4151, Water Code.
Sec. 52. (a) For a 24-month period following the transfer
of the employment of any employee of the former District, the System
may not terminate that employee, except for cause, as defined by the
System's standards of conduct for all employees, if the employee:
(1) is vested in the retirement program of the
District on the effective date of this Act; and
(2) earns an annual base salary of less than $50,000 on
the effective date of the Act enacting this section.
(b) For a five-year period following the transfer of the
employment of any employee of the former District, the System may
not terminate that employee, except for cause, as defined by the
System's standards of conduct for all employees, if:
(1) the employee meets the requirements of Subsections
(a)(1) and (2) of this section; and
(2) the sum of the years of service of the employee and
the employee's age is equal to or greater than 80.
(c) An employee who qualifies under Subsection (a) or (b) of
this section and who is terminated by the System has the same
opportunity for appeal as a person employed by the System who is not
an employee of the former District.
(d) The System is not required to employ an employee of the
District if that person was formerly terminated from, or resigned
in lieu of termination from, the System.
Sec. 53. From the effective date of the Act enacting this
section until the date election results dissolving the District are
certified to the Secretary of State, the attorney general may not
approve any public security, as defined by Chapter 1201, Government
Code, of the District unless:
(1) the Commission consents in writing before
approval; or
(2) the District provides written evidence that
issuing the public security represents a refunding of outstanding
debt for the purpose of realizing debt service savings in each year
that outstanding obligations are refunded and that results in a
cumulative net present value savings of three percent compared to
refunded debt service.
Sec. 54. (a) From the effective date of the Act enacting
this section until the date election results dissolving the
District are certified to the Secretary of State, a contract or
other agreement entered into, amended, or renewed during that
period to which the District is a party must include a provision
that the contract or other agreement is subject to:
(1) review by the System; and
(2) termination by the System at the System's sole
discretion, including the termination of all rights, duties,
obligations, and liabilities of the District or the System under
the contract or other agreement, if the contract or other agreement
is assumed by the System.
(b) A person is not entitled to compensation for loss or
other damages resulting from the termination of the contract or
other agreement under Subsection (a)(2) of this section.
Sec. 55. From the effective date of the Act enacting this
section until the date the election results dissolving the District
are certified to the Secretary of State, the District may not
dispose of, sell, transfer, assign, impair, or restrict any of the
District's rights or assets outside the normal and customary course
of business.
Sec. 56. A state agency at which an administrative or
enforcement action is pending against the District shall grant the
System special consideration and reasonable extensions to identify
and resolve the action in a manner satisfactory to the agency.
Sec. 57. (a) In this section, "advisory committee" means a
committee appointed under Subsection (b) of this section.
(b) Not later than the 60th day after the date the District
is dissolved under Section 50 of this Act, the System shall work
cooperatively with the commissioners court of each county in which
the former District was wholly or partly located to establish an
advisory committee to advise the System regarding the integration
of the services and infrastructure of the former District,
including service integration issues and the delivery of water
services by the System, in specific areas or water systems located
in the area outside the corporate boundaries of the largest
municipality served by the System.
(c) The advisory committee shall include one representative
from each county served by the System who resides in the boundaries
of the former District or the owner or operator of a business
located in the boundaries of the former District.
(d) Until the integration described by Section 51 of this
Act is complete, the board of directors of the System shall:
(1) consult with the advisory committee about the
matters described by Subsection (b) of this section at least
quarterly, during a regularly scheduled or specially called board
meeting of the System; and
(2) on request by the advisory committee chair,
provide members of the advisory committee an opportunity to address
the System's board of trustees on matters relating to the duties of
the advisory committee.
ARTICLE 4. DEADLINES; NOTICE; EFFECTIVE DATE OF ACT
SECTION 4.01. If a deadline established in Articles 1
through 3 of this Act cannot be met because of a requirement imposed
by the federal Voting Rights Act of 1965 (42 U.S.C. Section 1973c or
any other provisions of that Act), the deadline is the next
available date after the requirement is met.
SECTION 4.02. (a) The legal notice of the intention to
introduce this Act, setting forth the general substance of this
Act, has been published as provided by law, and the notice and a
copy of this Act have been furnished to all persons, agencies,
officials, or entities to which they are required to be furnished
under Section 59, Article XVI, Texas Constitution, and Chapter 313,
Government Code.
(b) The governor, one of the required recipients, has
submitted the notice and Act to the Texas Commission on
Environmental Quality.
(c) The Texas Commission on Environmental Quality has filed
its recommendations relating to this Act with the governor, the
lieutenant governor, and the speaker of the house of
representatives within the required time.
(d) All requirements of the constitution and laws of this
state and the rules and procedures of the legislature with respect
to the notice, introduction, and passage of this Act are fulfilled
and accomplished.
SECTION 4.03. Except as otherwise provided by Article 2 of
this Act, this Act takes effect immediately if it receives a vote of
two-thirds of all the members elected to each house, as provided by
Section 39, Article III, Texas Constitution. If this Act does not
receive the vote necessary for immediate effect, this Act takes
effect September 1, 2011.