By Vowell H.B. No. 2704 A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the regionalization of utility services in El Paso 1-3 County, provisions for consolidation of certain water and 1-4 wastewater service corporations and utility districts into a 1-5 regional utility, and methods for planning, funding and operation 1-6 of a regional Utility. 1-7 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-8 SECTION 1. DEFINITIONS. 1-9 (a) "assets" means all physical assets, contract rights, 1-10 water rights and all other rights or privileges of any kind or 1-11 nature whether tangible or intangible. 1-12 (b) "city" means the City of El Paso, a home rule city 1-13 pursuant to the laws of the State of Texas. 1-14 (c) "city's municipal jurisdiction" means the city's 1-15 authority within the city limits and the extraterritorial 1-16 jurisdiction of the city. 1-17 (d) "county" means El Paso County. 1-18 (e) "debts" means bonded indebtedness, all contractual 1-19 obligations, claims, judgment, and contingent liabilities for which 1-20 a person or entity is legally liable. 1-21 (f) "districts" means the following: Deerfield Park Water 1-22 Supply Corporation, East El Paso Water Supply Corporation, El Paso 1-23 County Lower Valley Water District Authority, El Paso County Water 2-1 Authority, El Paso County Water Control and Improvement District 2-2 No. 4, El Paso County Tornillo Water Improvement District, El Paso 2-3 County Water Control and Improvement District - Westway, Homestead 2-4 Municipal Utility District, Haciendas del Norte Water Improvement 2-5 District, San Elizario Grant Municipal Utility District, Tornillo 2-6 Water Supply Corporation, Fabens Water Control Improvement 2-7 District, Anthony Water District, any other district in the county 2-8 created by Art. XVI, Sec. 59 of the Texas Constitution providing 2-9 utility service as defined herein and located in the county. 2-10 (g) "PSB" means the Public Service Board, a board of 2-11 trustees having complete management and control of the water and 2-12 wastewater utility systems of the city pursuant to the authority 2-13 contained in Article 1115, Tex. Rev. Civ. Stat. and Ordinance No. 2-14 752 (May 22, 1952) of the city, as amended. 2-15 (h) "regional utility" is the city, acting through its water 2-16 utility as managed and operated by its PSB. 2-17 (i) "utility service" means water supply, wastewater, and 2-18 flood control services. 2-19 (j) "committee" is the Regional Utility Advisory Committee 2-20 as herein after created. 2-21 SECTION 2. PURPOSES OF ACT. The purposes of this Act are as 2-22 follows: 2-23 (a) to encourage and provide for the orderly consolidation 2-24 of the districts in the county into a regional utility in order to: 2-25 (1) insure the provision of utility services to all 3-1 residents of the county at the lowest possible cost according to a 3-2 regional plan; 3-3 (2) eliminate unnecessary competition by the districts 3-4 for limited water, financial and other valuable resources; 3-5 (3) take advantage of economies of scale with regard 3-6 to the provision of utility services in the county; 3-7 (4) conjunctively manage the limited resources of 3-8 surface and ground water of the county so that the integrity and 3-9 quality of these limited resources is protected and extended to the 3-10 greatest extent reasonably possible. 3-11 (b) to enable the city acting through its water utility as 3-12 managed and operated by the PSB to operate as the regional utility 3-13 in the county; 3-14 (c) to give the regional utility the authority to plan, 3-15 operate, and provide for utility services on a regional basis; 3-16 (d) to provide a framework for the management and operation 3-17 of the regional utility within and outside of the city's municipal 3-18 jurisdiction; and 3-19 (e) to provide for the assumption of the assets and debts of 3-20 the districts upon consolidation into the regional utility. 3-21 SECTION 3. DESIGNATION OF CITY AS EL PASO COUNTY REGIONAL 3-22 UTILITY. 3-23 (a) Upon the enactment of an enabling resolution by the City 3-24 Council of the City of El Paso, the city, through its PSB, is 3-25 hereby designated as the regional utility provider in the county 4-1 for the purpose of providing utility services within the county. 4-2 After the enactment of the enabling resolution by the City Council 4-3 of the City of El Paso, the obligation of the regional utility to 4-4 act as the regional utility provider as provided by the terms of 4-5 this act shall continue in full force and effect and shall only be 4-6 amended or abolished by the legislature of the state of Texas. 4-7 (b) Upon the effective date of this act, the regional 4-8 utility shall: 4-9 (1) file an application with the Texas Water 4-10 Development Board for a regional water supply and wastewater 4-11 facilities planning grant study pursuant to the provisions of 4-12 Section 15.406 of the Water Code and the applicable rules 4-13 promulgated by the Texas Water Development Board. In the event of 4-14 approval of the application by Texas Water Development Board 4-15 pursuant to the statute and rules, the regional utility shall enter 4-16 into a contract with the Texas Water Development Board to conduct a 4-17 regional water supply and wastewater facilities planning study 4-18 which shall include all of the county and incorporate any water 4-19 supply and wastewater facilities currently being designed or 4-20 constructed in the county. Results of the planning effort shall be 4-21 completed by December 31, 1993, and shall include an implementation 4-22 schedule and associated preliminary costs for water and wastewater 4-23 facilities to provide service to meet the projected water and 4-24 wastewater needs within the county to the year 2040. 4-25 (2) file an application with the Texas Water 5-1 Development Board for a regional water supply planning grant 5-2 pursuant to the provisions of Section 15.406 of the Water Code and 5-3 the applicable rules promulgated by the Texas Water Development 5-4 Board. In the event of approval of the application by Texas Water 5-5 Development Board pursuant to the applicable statute and rules, the 5-6 regional utility shall enter into a contract with the Texas Water 5-7 Development Board for the preparation of a regional water supply 5-8 planning study which shall include all of the county. Results of 5-9 the planning effort shall be completed by December 31, 1993, and 5-10 shall identify projected water demands and available and potential 5-11 supplies to meet the water supply needs within the county to the 5-12 year 2040. 5-13 (c) Subject to the provisions of all outstanding bonds of 5-14 the city, the regional utility shall serve any area or areas within 5-15 the county, and is hereby designated as the utility service 5-16 provider within the county which shall receive priority 5-17 consideration for purposes of state funding. 5-18 (d) As the regional utility provider, the regional utility 5-19 shall receive priority consideration for purposes of state funding 5-20 of regional planning for the provision of utility service outside 5-21 the city's municipal jurisdiction. The regional utility may enter 5-22 into agreements and cooperative projects with political 5-23 subdivisions and other governmental entities in this State, the 5-24 state of New Mexico, the International Boundary and Water 5-25 Commission, and with the Republic of Mexico or any responsible 6-1 political subdivision thereof, to: 6-2 (1) promote regional planning for the provision of 6-3 utility services; 6-4 (2) promote regional planning which is consistent with 6-5 the United States/Mexico integrated border plan; 6-6 (3) coordinate the regional planning with the 6-7 comprehensive state water plan; 6-8 (4) finance, or seek financing for, the water and 6-9 wastewater infrastructure, especially in economically distressed 6-10 areas; 6-11 (5) provide for regional drought and water supply 6-12 management; 6-13 (6) collect and disseminate water and wastewater 6-14 regional data; 6-15 (7) coordinate state level financial and technical 6-16 assistance in extending or creating water and wastewater service; 6-17 (8) promote conservation planning, education, and 6-18 research of surface water and ground water resources; 6-19 (9) promote preservation of human health and the 6-20 environment; 6-21 (10) promote water quality; and 6-22 (11) accomplish any other related regional utility 6-23 purpose. 6-24 SECTION 4. ORGANIZATION OF LOCAL GOVERNMENT ADVISORY 6-25 COMMITTEE. (a) Within thirty days of the effective date of this 7-1 Act, there shall also be created a committee known as the Regional 7-2 Utility Advisory Committee, consisting of seven members, five (5) 7-3 of whom are to be appointed by the commissioners court of the 7-4 county and two (2) of whom are to be jointly appointed by the 7-5 mayors of the incorporated municipalities, other than the city, 7-6 within the county. The duties of the committee shall be to act as 7-7 an advisory body to the regional utility on matters related to: 7-8 (1) the priorities in the provision of utility 7-9 services; 7-10 (2) the rates and charges for service outside of the 7-11 corporate limits of the city; 7-12 (3) regional planning; and 7-13 (4) adoption of or amendments to rules and regulation 7-14 affecting provision of utility service outside of the corporate 7-15 limits of the city. 7-16 (b) Each member of the committee appointed by the 7-17 commissioners court of the county shall be a qualified voter 7-18 residing within the county and outside the city's municipal 7-19 jurisdiction. Each member of the committee appointed by the mayors 7-20 of the other incorporated cities within the county shall be a 7-21 qualified voter residing within the county and within one or the 7-22 other of the incorporated municipalities other than the city. Each 7-23 member of the committee shall also be over eighteen years of age 7-24 and shall have resided in the county for a minimum of six months 7-25 immediately prior to the date of appointment. 8-1 (c) The two member appointed by each the commissioners court 8-2 of the county and the mayors of the incorporated municipalities in 8-3 the county but not including the city shall serve for three years. 8-4 All other members of the committee, and after the first term of the 8-5 first four members of the committee, shall be appointed to serve a 8-6 two year term. A vacancy on the committee shall be filled by 8-7 appointment for the unexpired term by the commissioner's court or 8-8 the mayors of the incorporated whichever appointed the member whose 8-9 seat was vacated. 8-10 (d) A person is disqualified from serving as a member of the 8-11 committee if: 8-12 (1) he is related within the third degree of affinity 8-13 or consanguinity to: 8-14 (A) a developer of property in the county, 8-15 (B) any elected official of the city or county, 8-16 (C) any manager of the regional utility, 8-17 (D) or any other member of the committee; 8-18 (2) he is an employee or officer of: 8-19 (A) any developer of property in the county, 8-20 (b) any elected official of the city, or other 8-21 incorporated cities within the county, or the county, 8-22 (C) any manager of the regional utility, 8-23 (D) or any manager, engineer or attorney for a 8-24 district, the county, the city, or other incorporated municipality 8-25 within the county; 9-1 (3) he is a developer of property in the county; 9-2 (4) he is serving as an attorney, consultant, 9-3 engineer, manager, architect or in some other professional capacity 9-4 for the regional utility, the county, a district or an incorporated 9-5 city within the county, or of a developer of property within the 9-6 county, in connection with the regional utility service; 9-7 (5) he is a party to a contract with or along with the 9-8 regional utility except for the purchase of public services 9-9 furnished by the regional utility to the public generally. 9-10 SECTION 5. ADDITIONAL RIGHTS AND POWERS OF REGIONAL UTILITY. 9-11 (a) For the purposes of providing utility services and 9-12 operating a regional utility in the county, the regional utility 9-13 shall have all powers and authority provided in Sections 402.001 9-14 and 402.002 of the Local Government Code. The regional utility 9-15 shall specifically have the authority to apply for and obtain 9-16 grants and loans for the purpose of providing utility service 9-17 outside the city's municipal jurisdiction and for the purpose of 9-18 funding and providing for regional projects with other states and 9-19 the Republic of Mexico. This Act amends Sections 791.011 and 9-20 791.026 of the Government Code to authorize the regional utility 9-21 pursuant to the regional water supply and wastewater facilities 9-22 planning study report prepared pursuant to Section 3(b) of this act 9-23 to: 9-24 (1) contract with other local governments, 9-25 municipalities, districts, river authorities, or other state or 10-1 governmental entities within this State, or within other states, 10-2 and with the Republic of Mexico, 10-3 (2) obtain grants and loans to provide utility service 10-4 outside of the city's municipal jurisdiction, 10-5 (3) provide for planning and construction of regional 10-6 projects including water supply or wastewater treatment facilities, 10-7 and 10-8 (4) otherwise promote the regionalization of utility 10-9 services within the county and surrounding areas. 10-10 (b) This act shall not operate to authorize the regional 10-11 utility to condemn land owned by the state or any other political 10-12 subdivision of the state outside the city's municipal jurisdiction. 10-13 (c) Except to the extent of any tax obligation imposed by 10-14 any district and necessary to retire any debt existing on the date 10-15 of consolidation as hereinafter provided, this Act shall not 10-16 operate to allow the regional utility to tax property outside of 10-17 the city's corporate limits. 10-18 SECTION 6. CONSOLIDATION OF DISTRICTS. 10-19 (a) The regional utility shall have the authority to 10-20 consolidate one or more of the districts into the regional utility 10-21 upon the occurrence of one or more the following events: 10-22 (1) a majority vote of the board of directors of a 10-23 district operating as a water supply corporation or investor owned 10-24 utility, 10-25 (2) a majority vote of the board of directors of a 11-1 district other than a water supply corporation to dissolve the 11-2 district by consolidation into the regional utility, followed by an 11-3 election in the district within one year of the date of the 11-4 petition at which a majority of the voters voting in the election 11-5 vote to dissolve the district by consolidation into the regional 11-6 utility; 11-7 (3) a petition requesting dissolution of the district 11-8 by consolidation into the regional utility signed by ten percent 11-9 (10%) or more of the residents of the subject district and 11-10 delivered to the board of directors of the subject district, 11-11 followed by an election within one year of the date of the petition 11-12 at which a majority of the voters voting in the election vote to 11-13 dissolve the district by consolidation into the regional utility; 11-14 or 11-15 (4) an agreement between the regional utility and the 11-16 county, which agreement may be made without the consent of the 11-17 district as to the abolition of the district as it exists within 11-18 the county, but outside of any other municipality's boundaries. 11-19 (b) Notwithstanding the occurrence of a vote or election as 11-20 provided in (a) above, as to each district with bonds, notes, 11-21 obligations or taxes owed, contracted, or authorized at the time of 11-22 the district's vote to consolidate into PSB, consolidation of a 11-23 district into PSB shall not be final and effective until: 11-24 (1) the boards of directors of PSB and the district 11-25 have entered into a consolidation agreement; and 12-1 (2) as to each district other than a district 12-2 operating as a water supply corporation, the board has ordered and 12-3 held an election in the district at which a majority of the 12-4 district's residents approved the terms and conditions of the 12-5 consolidation agreement; 12-6 (3) The district's debts, bonds, notes, obligations 12-7 and taxes, as applicable, have been paid in full; and 12-8 (4) a PSB consolidation order has been filed in the 12-9 real property records of the county and the Texas Water Commission. 12-10 (c) If an election is required to be held in a district for 12-11 the purposes of consolidation into the regional utility, then the 12-12 election shall be held in conformity with the Texas Election Code, 12-13 as amended, and all applicable election law. 12-14 (d) At all times prior to final consolidation of a district 12-15 which has debts or other obligations which may be owed, contracted, 12-16 or authorized, the district shall: 12-17 (1) protect the assets of the district and insure that 12-18 they are not impaired; 12-19 (2) where applicable and necessary, assess and collect 12-20 taxes on property in the district to pay debts created by the 12-21 district; and 12-22 (3) pay debts of the district and manage the assets of 12-23 the district through the sale, lease or other management of 12-24 district lands. 12-25 (e) If taxes were levied on land within a district 13-1 consolidated into the regional utility at the time of 13-2 consolidation, and if taxes are necessary to retire existing debt, 13-3 the regional utility shall continue to assess and collect the 13-4 taxes, but the regional utility shall not increase tax rates in the 13-5 district in order to retire debts of the district unless such 13-6 increase is authorized as provided by existing law. 13-7 (f) Consolidation shall be achieved in such a way that it 13-8 does not actually violate any existing bond covenants or other 13-9 existing contractual obligations of the city, its public service 13-10 board, or any district and does not adversely affect their bond 13-11 rating. 13-12 (g) The regional utility may apply to the Texas Water 13-13 Development Board for up to $3 million appropriated during the 13-14 1994-95 biennium for grants or loans to encourage and facilitate 13-15 the regionalization of water and wastewater services in counties 13-16 directly adjacent to the international border with Mexico through 13-17 Section 15.102 Water Code. Any funds awarded pursuant to this 13-18 provision shall be used by the regional utility to purchase and 13-19 refinance district debt in order to achieve a reasonable cost of 13-20 service to existing customers and facilitate consolidation of water 13-21 and wastewater services in the county. 13-22 SECTION 7. UTILITY SERVICE RATES. 13-23 (a) The regional utility shall have the authority to charge 13-24 persons receiving utility service in the expanded service areas, 13-25 such rates for the sources allowed by law. Notwithstanding Section 14-1 16.349(b) of the Texas Water Code, the regional utility may charges 14-2 persons in an area outside the corporate boundaries of the city 14-3 rates for utility service actually provided even though the rate so 14-4 charged may exceed the rate paid by ratepayers inside the corporate 14-5 boundaries of the city for the utility service. 14-6 (b) In no event shall the regional utility increase the 14-7 rates charged for utility service to ratepayers within the 14-8 corporate boundaries of the city for the purpose of providing 14-9 utility service or reducing the rates charges for utility service 14-10 to ratepayers outside the corporate boundaries of the city. In no 14-11 event shall any revenue generated from the rates charged customers 14-12 outside the city be paid to or deposited in the general revenue 14-13 fund of the city except as required by any existing bond covenant. 14-14 SECTION 8. PROVISION OF UTILITY SERVICE. 14-15 (a) As a condition of providing utility service, the 14-16 regional utility may require that all development in the county 14-17 meet the minimum construction and development standards established 14-18 for economically distressed areas in the Water Code and in the 14-19 Rules of the Texas Water Development Board. 14-20 (b) Upon consolidation of a district into the regional 14-21 utility, the regional utility shall be required to provide utility 14-22 service to those residents of the district. The regional utility 14-23 shall provide for the extension of service to existing customers 14-24 and any new customers within the consolidated district pursuant to 14-25 the provisions of the regional water supply and wastewater 15-1 facilities plan developed pursuant to Section 3(b) of this act. 15-2 Notwithstanding any other provision in this act, any water supply 15-3 or wastewater facilities being constructed or designed on the 15-4 effective date of this act shall be continued by the regional 15-5 utility uninterrupted by any delay and be incorporated into the 15-6 regional water supply and wastewater facilities plan developed 15-7 pursuant to Section 3(b) of this act. 15-8 (c) In order to plan for regional utility service within the 15-9 county, the regional shall include land which belongs to the 15-10 permanent school fund of the state within a regional plan. In such 15-11 event, the provisions of a regional plan shall be binding upon 15-12 permanent school fund land only after the regional utility provides 15-13 acceptable utility service commitments to the affected land and 15-14 obtains the written consent of the school land board in accordance 15-15 with its Rules and Regulations. 15-16 SECTION 9. SEVERABILITY AND CONSTRUCTION. If any provision 15-17 of this Act or the application thereof to any person or 15-18 circumstances be held invalid, such invalidity shall not affect 15-19 other provisions or applications of this Act that can be given 15-20 effect without the invalid provision or application, and to this 15-21 end the provisions of this Act are declared to be severable. All 15-22 the terms and provisions of this Act are declared to be severable. 15-23 All the terms and provisions of this Act are to be liberally 15-24 construed to effectuate the purpose, powers, rights, functions, and 15-25 authorities herein set forth. 16-1 SECTION 10. DECLARATION OF EMERGENCY. The importance of 16-2 this legislation and the crowded condition of the calendars in both 16-3 houses create an emergency and an imperative public necessity that 16-4 the constitutional rule requiring bills to be read on three several 16-5 days in each house be suspended, and this rule is hereby suspended 16-6 and this act shall be effective on September 1, 1993.