AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

 

The Bexar Metropolitan Water District (district) was created by the 49th Legislature in 1945, to serve anticipated growth in Bexar County.  From an initial account base of 4,765 primarily residential accounts, it has grown to more than 92,000 residential and commercial accounts today.  Repeated and numerous customer complaints about inadequate service, unsafe water conditions, and excessive rates resulted in legislative intervention in 2007, through H.B. 1865, which created the Joint Committee on Oversight of the Bexar Metropolitan Water District (committee) to monitor operations, management, and governance of the district.  The legislature also mandated operational and financial audits of the district by the state.  The audits found a number of serious problems with the district, including financial improprieties, weak management, and a pattern of unethical conduct and unprofessional management practices by certain officials of the district.  Attempts to put legislative remedies in place in 2009 were unsuccessful and oversight by the committee continued during the interim with findings that the district's board of directors is incapable of functioning as a policymaking body.  The committee recommended that two bills be filed to address the district's situation. 

 

S.B. 341 establishes a conservatorship for the district and would authorize district customers who are registered voters to vote to dissolve the district and transfer its assets to the water utility owned by the municipality with a population of more than one million in the area served by the district in an election to be held in November 2011, or as soon as a Federal Voting Rights Act preclearance would allow.

 

S.B. 341 amends current law relating authorizing the dissolution of the Bexar Metropolitan Water District and provides a penalty.

 

RULEMAKING AUTHORITY

 

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

 

SECTION BY SECTION ANALYSIS

 

ARTICLE 1.  FINANCIAL AND OPERATIONAL AUDITS

 

SECTION 1.01.  Amends Section 1, Chapter 306, Acts of the 49th Legislature, Regular Session, 1945, to delete existing text referring to the Bexar Metropolitan Water District as the "district."

 

SECTION 1.02.  Amends Chapter 306, Acts of the 49th Legislature, Regular Session, 1945, by adding Sections 1A, 34, 35, 36, 37, 38, 39, 40, 41, and 42, as follows:

 

Sec. 1A.  Defines, in this Act, "board," "commission," "committee," "director," "district," and "system."

 

Sec. 34.  (a) Requires the Texas Commission on Environmental Quality (TCEQ), not later than the 30th day after the effective date of the Act enacting this section, to begin an on-site evaluation of the Bexar Metropolitan Water District (district).  Requires that the evaluation include:

 

(1)  a complete inventory and evaluation of each distinct water system in the district to determine the district's basis in, or the intrinsic value of, the infrastructure associated with that water system; the district's bonded debt and commercial paper reasonably associated with or allocable to the infrastructure in that water system; and 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)  a list of any district assets whose transfer to another appropriate public water utility would be likely to improve service to the former customers of the district who would be served by that utility, or the district's overall efficiency;

 

(3)  a list and copies of existing contracts to which the district is a party, including for each contract effective and termination dates, the general scope of the property and services involved; obligations of the district, including financial obligations; how the district benefits from the contract; and whether the district has waived governmental immunity;

 

(4)  a list of the following in regard to the district; property; rights, including certificates of convenience and necessity; pumping rights; and any other rights; staff; and internal policies, including employment rules, benefits, and an evaluation of the usefulness and efficacy of each policy;

 

(5)  a comprehensive rehabilitation plan for the district that identifies strategies for restoring the district's financial integrity and developing a system of sound financial management; describes a standard of ethics, professionalism, and openness expected of each director and employee of the district; provides a mechanism to enforce compliance with district policies, including procurement policies;  identifies ways to enhance the district's operational efficiency and improve the district's provision of redundancy in water services; and provides for educating the board of directors of the district (board) and management personnel on improving management practices and complying with district policy and state and federal laws and regulations;

 

(6)  an assessment of 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;

 

(7)  a study of the district's current infrastructure improvements, including personnel for the improvements, including staffing levels of engineers, capital improvement program personnel; and mains and services personnel; and contracts related to any capital improvements; and

 

(8)  a financial audit of the district.

 

(b)  Requires TCEQ, on commencement of the evaluation, to notify the district in writing that TCEQ has begun the evaluation and to specify a time period for completion of the evaluation.  Authorizes TCEQ to extend the specified time period for good cause.  Requires the district to cooperate and provide assistance and access to all necessary records, confidential or not, to TCEQ.

 

(c)  Authorizes TCEQ to contract with utility management consultants, accountants, and other persons as necessary to conduct the evaluation.

 

(d)  Authorizes TCEQ to require the district to reimburse TCEQ for the reasonable cost of conducting the evaluation.

 

(e)  Requires TCEQ to file copies of the completed evaluation with the committee; the board; and the lieutenant governor, the speaker of the house of representatives, and the chairs of the house and senate committees with primary oversight over the district.

 

Sec. 35.  Authorizes the state auditor's office, at TCEQ's request, to audit the district under Chapter 321 (State Auditor), Government Code.  Requires the district to reimburse the state auditor's office for the cost of the audit.

 

Sec.  36.  Authorizes TCEQ to employ or contract with a person to carry out the duties described by Section 34 of this Act who, at the time of the person's hire has demonstrated a high level of expertise in utility management, is not a member of the board (director), and has no financial interest in the district or in any entity that has a contract with the district or that is likely to develop a contractual relationship with the district.

 

Sec. 37.  (a) Authorizes TCEQ to employ or contract with additional persons who will report to and assist TCEQ if assistance from district staff is not provided, or TCEQ needs special expertise from one or more of the persons.

 

(b) Entitles a person employed or contracted with under Section 36 of this Act and any additional persons employed or contracted with under this section to receive a salary determined by the executive director of TCEQ (executive director) for performing those duties.

 

(c)  Requires the district to pay the compensation of any persons employed or contracted with under this section or Section 36 of this Act.

 

(d)  Requires the executive director to set the compensation of the person employed or contracted with under this section or Section 36 of this Act after considering the person's level of expertise in utility management, and certifications and education.

 

Sec. 38.  (a)  Entitles a person employed or contracted with under Section 36 or 37 of this Act to reimbursement of the reasonable and necessary expenses incurred by that person in the course of performing duties under this Act.

 

(b)  Requires the district to pay the expenses incurred by the persons employed or contracted with under Section 36 or 37 of this Act.  Requires the executive director to determine if an expense is reasonable and necessary after considering whether the expense is necessary to complete the duties assigned by this Act; at or below the cost of a similar expense incurred by other utilities; documented by an invoice, bill, or work order that includes details relating to the time spent on services; or cost of supplies; and in accordance with procedures used to minimize expenses, including comparing vendor rates or competitive bidding.

 

Sec. 39.  Authorizes the executive director to employ or contract with a person to carry out any purpose described by this Act.  Requires the district to reimburse TCEQ for all related expenses.

 

Sec. 40.  (a)  Provides that this section does not apply to bonds related to a water supply contract existing on or after the effective date of the Act enacting this section entered into by the district and a governmental entity, including the Canyon Regional Water Authority and the Bexar-Medina-Atascosa Counties Water Improvement District No. 1, if revenue from the contract is to be pledged wholly or partly to pay debt service on revenue bonds approved by the attorney general.

 

(b)  Prohibits the attorney general, from the effective date of the Act enacting this section until the date election results are certified to the secretary of state (SOS) under Article 2 or 2A of the Act enacting this section, from approving any public security, as defined by Chapter 1201 (Public Security Procedures Act), Government Code, of the district unless TCEQ consents in writing before approval, or 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 at least three percent compared to refunded debt service.

 

Sec. 41.  (a)  Provides that this section does not apply to a water supply contract existing on or after the effective date of the Act enacting this section entered into by the district and a governmental entity, including the Canyon Regional Water Authority and the Bexar-Medina-Atascosa Counties Water Improvement District No. 1, if revenue from the contract is to be pledged wholly or partly to pay debt service on revenue bonds approved by the attorney general.

 

(b)  Requires that a contract or agreement entered into, amended, or renewed during that period to which the district is a party, from the effective date of the Act enacting this section until the date election results are certified to SOS under Article 2 or 2A of the Act enacting this section, include a provision that the contract or other agreement is subject to review by a water utility owned by a municipality with a population of more than one million in the area served by the district (system) if the contract or other agreement is assumed by the system, and 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.

 

(c)  Provides that a person or entity is not entitled to compensation for loss or other damages resulting from the termination of the contract or other agreement under Subsection (b)(2) of this section.

 

Sec. 42.  Prohibits the district, from the effective date of the Act enacting this section until the date the election results are certified to SOS under Article 2 or 2A of the Act enacting this section, from disposing of, selling, transferring, assigning, impairing, or restricting any of the district's rights or assets outside the normal and customary course of business.

 

ARTICLE 2.  ELECTION; EFFECTIVE DATE OF ARTICLES 3 AND 4

 

SECTION 2.01.  (a) Defines "board," "commission," and "district" in this article.

 

(b)  Requires the board, on the next uniform election date, after consultation with SOS, to hold an election in the district solely on the question of dissolving the district and disposing of the district's assets and obligations.   Requires the board, notwithstanding Section 3.005(b) (relating to superseding a conflicting law outside the Election Code that conflicts), Election Code, to call the election not later than the 90th day before the date the election is to be held or as soon as practicable, if the effective date of this Act is after the 90th day.

 

(c)  Requires that the order calling the election 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.

 

(d)  Requires the board to 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.  Requires that the first publication of the notice appear not later than the 35th day before the date of the beginning of early voting for the election.

 

(e)  Sets forth the required language for the ballot and requires it to be printed to permit voting for or against the proposition.

 

(f)  Requires the board to certify that a majority of the voters in the district have voted in favor of dissolution, or not in favor of dissolution.

 

(g)  Requires TCEQ or its executive director, if the board fails to call an election on or before the 90th day before the date the election is to be held, to file a writ of mandamus and pursue all other legal and equitable remedies available to compel the board to call the election.

 

(h)  Provides that the election directed to be held under this article is not intended to prohibit a regular or special election to elect board members.

 

SECTION 2.02.  (a)  Requires the board, not later than the 10th day after the determination under Section 67.005(a), Election Code, of the official results of the election, to certify that result to SOS.

 

(b)  Provides that if the proposition is approved by a majority of the voters voting in the election, Article 3 of this Act does not take effect, and Article 4 of this Act takes effect on the date the results are certified.

 

(c)  Provides that if the majority of the voters voting in the election do not approve the proposition, Article 3 of this Act takes effect on the date the results are certified, and Article 4 of this Act does not take effect.

 

SECTION 2.03.  (a)  Provides that the purpose of this article is to provide all of the eligible voters of the district an opportunity to determine by election whether to continue with the current managing authority of the district or to transition to another managing authority which owns, operates, and manages the system, as defined by Section 1A, Chapter 306, Acts of the 49th Legislature, Regular Session, 1945.

 

(b)  Provides that in order to provide all of the district's eligible voters an equal opportunity to vote on the determination in Subsection (a) of this section, the preferred method of election is a district-wide vote with all votes weighted equally.  Provides that the reasons for this preference include:

 

(1)  the election is a referendum on a single issue, involving different considerations in its structure than the considerations for an election to select members of a multi-member governing body;

 

(2)  neither the vote dilution principles addressed under Section 2 of the Voting Rights Act of 1965 (42 U.S.C. Section 1973 et seq.) nor the three-part analytical framework used to measure vote dilution under Thornburg v. Gingles, 478 U.S. 30 (1986), are applicable to such a single-issue referendum;

 

(3)  the explanation in Butts v. City of New York, 779 F.2d 141 (2d Cir. 1985), cert. denied, 478 U.S. 1021 (1986), that, if "the winner of an election for a single-member office is chosen directly by all the eligible voters" for that office, electoral arrangements are unlikely to deny a class of voters equal opportunity for representation, is equally applicable to the preferred method of election for the single-issue referendum established in this article; and

 

(4)  the preferred method of election established in this article adheres strictly to the constitutional principle of "one person, one vote," a principle which a federal court has stated specifically applies to the district in an order dated September 21, 2006, in Civil Action No. SA-96-CA-335, Rios v. Bexar Metropolitan Water District et al., in the United States District Court, Western District of Texas, and which the district has never challenged by appeal or otherwise.

 

ARTICLE 2A.  ALTERNATE ELECTION PROCEDURES IF ARTICLE 2 ELECTION IS IN VIOLATION

 

SECTION 2A.01.  Provides that it is the intent of the legislature that the preferred method of election be the method described by Section 2.01 of this Act.  Provides that this article provides an alternate means of conducting the election on the question of dissolving the Bexar Metropolitan Water District if the method described in Section 2.01 of this Act cannot be used due to a final, unappealable administrative or judicial decision.  Provides that it is the intent of the legislature to comply fully with the requirements of the federal Voting Rights Act of 1965 (42 U.S.C. Section 1973 et seq.).  Provides that it is not the intent of the legislature to influence any preclearance decision made by the United States Department of Justice relating to the Act creating this section.

 

SECTION 2A.02.  (a)  Defines, in this article, "board," "commission," "district," and "voting district."

 

(b)  Requires the board, on the next uniform election date following the date of a final, unappealable administrative or judicial decision that any portion of this Act is in violation of the federal Voting Rights Act of 1965 (42 U.S.C. Section 1973 et seq.) or United States Constitution, after consultation with SOS, to hold an election as provided by this section in the district solely on the question of dissolving the district and disposing of the district's assets and obligations.  Requires the board, notwithstanding Section 3.005(b), Election Code, to call the election not later than the 90th day before the date the election is to be held or as soon as practicable, if the effective date of this Act is after the 90th day.

 

(c)  Requires that the order calling the election state the nature of the election, including the proposition to appear on the ballot, the date of the election, the hours during which the polls will be open, and the location of the polling places.

 

(d)  Requires the board to 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.  Requires that the first publication of the notice appear not later than the 35th day before the date of the beginning of early voting for the election.

 

(e)  Sets forth the required language to be printed on the ballot.

 

(f)  Requires that the election be held in numbered voting districts established by the board.  Requires the board to draw each voting district to reflect population changes from the latest decennial census and to conform with state law, the federal Voting Rights Act of 1965 (42 U.S.C. Section 1973 et seq.), and any applicable court order.

 

(g)  Requires the board to certify the election results for each voting district.  Requires the board to then certify that a majority of the voting districts have voted in favor of dissolution, or not in favor of dissolution.

 

(h)  Requires TCEQ or its executive director, if the board fails to call an election on or before the 90th day before the date the election is to be held, to file a writ of mandamus and pursue all other legal and equitable remedies available to compel the board to call the election.

 

(i)  Provides that the election directed to be held under this article is not intended to prohibit a regular or special election to elect board members.

 

SECTION 2A.03.  (a)  Requires the board, not later than the 10th day after the determination under Section 67.005(a) (relating to the official result of an election that is not canvassed at the state level), Election Code, of the official results of the election, to certify that result to SOS.

 

(b)  Provides that if the proposition is approved by a majority of the voting districts in the election, Article 3 of this Act does not take effect, and Article 4 of this Act takes effect on the date the results are certified.

 

(c)  Provides that if a majority of the voting districts in the election do not approve the proposition, Article 3 of this Act takes effect on the date the results are certified, and Article 4 of this Act does not take effect.

 

ARTICLE 3.  CHANGES TO THE BEXAR METROPOLITAN WATER DISTRICT IF VOTERS DO NOT DISSOLVE THE DISTRICT UNDER ARTICLE 2

 

SECTION 3.01.  Amends Section 8, Chapter 306, Acts of the 49th Legislature, Regular Session, 1945, as follows:

 

Sec.  8.  (a)  Provides that the seven members of the board are elected to staggered two-year terms in an election held on the uniform election date in November.  Provides that directors are elected from numbered single-member districts established by the board.  Requires the board to revise each single-member district after each decennial census to reflect population changes and to conform with state law, the federal Voting Rights Act of 1965 (42. U.S.C. Section 1973 et seq.), and any applicable court order.  Provides that at an election of directors, the candidate from each single-member district who receives the greatest number of votes is elected to represent that single-member district.  Requires each director to hold office until his successor is elected or appointed and has qualified.  Deletes existing text requiring five members of the board to hereafter be elected for a term of six years each, provided that an election for two directors for a term of six years is required to be held on the first Tuesday in April, 1954; requiring that the terms of three members of the present board, and are, hereby, extended to the first Tuesday in April, 1957; and requiring the present directors to determine such three by lot.  Deletes existing text requiring three directors to be elected on the first Tuesday in April, 1957, and two directors and requiring three directors, alternately, to be elected each three years thereafter on the first Tuesday in April as the six-year terms expire.  Deletes existing text requiring the two or three persons, respectively, receiving the greatest number of votes be declared elected.  Makes nonsubstantive changes.

 

(a-1)  Provides that a person is not eligible to serve as a director for more than three terms or for more than a total of seven years of service.

 

(b)  Requires that such elections be called, conducted, and canvassed in the manner provided by the Election Code, rather than Chapter 25 (S.B. 169), General Laws of the Thirty-Ninth Legislature, Regular Session, 1925, and any amendments thereto.

 

(c)  Requires the board to fill all vacancies on the board by appointment and requires such appointees to hold office until a successor elected at the next scheduled election date has qualified, rather than to hold office for the unexpired term for which they were appointed.

 

(d)  Provides that any four members of the board, rather than any three members of the board, are a quorum for the adoption or passage of any resolution or order or the transaction of any business of the district.  Makes nonsubstantive changes.

 

(e)  Requires a director to be a qualified voter of the single-member district from which the director is elected.  Deletes existing text requiring directors succeeding the first board, whether now or hereafter elected, to be qualified resident electors of Bexar County, Texas, and owners of taxable property within the area comprising said district, and to organize in like manner.

 

(f)  Prohibits a payment to a director for fees of office under Section 49.060 (Fees of Office; Reimbursement), Water Code, from being made for a meeting that occurs in a different fiscal year from the one in which the payment is made.  Makes nonsubstantive changes.

 

SECTION 3.02.  Amends Section 33A, Chapter 306, Acts of the 49th Legislature, Regular Session, 1945, by amending Subsection (c) and adding Subsection (g), as follows:

 

(c)  Provides that the oversight committee is comprised of seven members appointed as follows:

 

(1)  two senators who represent senate districts that include territory within the district appointed by the lieutenant governor, who shall also designate one of the senators as co-chair;

 

(2)  two representatives who represent House districts that include territory within the district, appointed by the speaker of the Texas House of Representatives, who shall also designate one of the representatives as co-chair;

 

(3)  one member with special expertise in the operation of public water utilities appointed by the governor;

 

(4)  one member appointed by the governor to represent the public; and

 

(5)  one member of the Bexar County Commissioners Court who represents a precinct in which customers of the district reside.

 

Deletes existing text providing that the oversight committee is comprised of five members appointed to represent the following members: the senator sponsor of this Act, or, in the event this senator cannot serve, a senator appointed by the lieutenant governor; the House author of this Act, or, in the event this representative cannot serve, a representative appointed by the speaker of the Texas House of Representatives;  one member with special expertise in the operation of public water utilities appointed by the governor; one member appointed by the governor to represent the public; and a member of the Bexar County Commissioners Court who represents a precinct in which customers of the district reside.

 

(g)  Requires the oversight committee, on or before December 31, 2012, to provide a report under Subsection (e) of this section to the legislature.  Provides that the committee is abolished and this section expires January 1, 2013.

 

SECTION 3.03.  Amends Chapter 306, Acts of the 49th Legislature, Regular Session, 1945, by adding Sections 8A, 8B, 8C, 10A, 10B, and 43, as follows:

 

Sec.  8A.  (a)  Requires a person, to be eligible to be a candidate for or to be elected or appointed as a director, to have:

 

(1)  resided continuously in the single-member district that the person seeks to represent for 12 months immediately preceding the date of the regular filing deadline for the candidate's application for a place on the ballot;

 

(2)  viewed the open government training video provided by the attorney general and provided to the board a signed affidavit stating that the candidate viewed the video;

 

(3)  obtained 200 signatures from individuals living in the district; and

 

(4)  paid a filing fee of $250 or filed a petition in lieu of the filing fee that satisfies the requirements prescribed by Section 141.062 (Validity of Petition), Election Code.

 

(b)  Defines "political contribution" and "specific-purpose committee" in this subsection.  Prohibits a director or a candidate for the office of director from knowingly accepting political contributions from a person or organization that in the aggregate exceed $500 from each person or organization in connection with each election in which the director or candidate is involved.  Provides that for purposes of this subsection, a contribution to a specific-purpose committee for the purpose of supporting a candidate for the office of director, opposing the candidate's opponent, or assisting the candidate as an officeholder is considered to be a contribution to the candidate.

 

Sec.  8B. (a)  Prohibits a person who is elected or appointed to and qualifies for office as a director on or after the effective date of this section from voting, deliberating, or being counted as a member in attendance at a meeting of the board until the person completes a training program on district management issues.  Requires that the training program provide information to the person regarding:

 

(1)  the enabling legislation that created the district;

 

(2)  the operation of the district;

 

(3)  the role and functions of the board;

 

(4) the rules of the board;

 

(5)  the current budget for the board;

 

(6)  the results of the most recent formal audit of the board;

 

(7) the requirements of the:

 

(A)  open meetings law, Chapter 551 (Open Meetings), Government Code;

 

(B) public information law, Chapter 552 (Public Information), Government Code; and

 

(C)  administrative procedure law, Chapter 2001 (Administrative Procedure), Government Code;

 

(8)  the requirements of the conflict of interest laws and other laws relating to public officials; and

 

(9)  any applicable ethics policies adopted by the board or the Texas Ethics Commission.

 

(b)  Authorizes TCEQ to create an advanced training program designed for a person who has previously completed a training program described by Subsection (a) of this section.  Provides that if TCEQ creates an advanced training program under this subsection, a person who completes that advanced training program is considered to have met the person's obligation under Subsection (a) of this section.

 

(c)  Requires each director who is elected or appointed on or after the effective date of this section to complete a training program described by Subsection (a) or (b) of this section at least once in each term the director serves.

 

(d)  Requires the board to adopt rules regarding the completion of the training program described by Subsection (a) or (b) of this section by a person who is elected or appointed to and qualifies for office as a director before the effective date of this section.  Provides that a director described by this subsection who does not comply with board rules is considered incompetent as to the performance of the duties of a director in any action to remove the director from office.

 

(e)  Prohibits a director from:

 

(1)  accepting or soliciting a gift, favor, or service, the value of which exceeds $50 per gift, favor, or service, that:

 

(A) might reasonably influence the director in the discharge of an official duty; or

 

(B)  the director knows or should know is being offered with the intent to influence the director's official conduct;

 

(2)  accepting other employment or engaging in a business or professional activity that the director might reasonably expect would require or induce the director to disclose confidential information acquired by reason of the official position;

 

(3)  accepting other employment or compensation that could reasonably be expected to impair the director's independence of judgment in the performance of the director's official duties;

 

(4)  making personal investments that could reasonably be expected to create a substantial conflict between the director's private interest and the interest of the district;

 

(5)  intentionally or knowingly soliciting, accepting, or agreeing to accept any benefit for having exercised the director's official powers or performed the director's official duties in favor of another; or

 

(6)  having a personal interest in an agreement executed by the district.

 

(f)  Requires a director, not later than April 30 each year, to file with the Bexar County clerk a verified financial statement complying with Sections 572.022 (Reporting Categories; Required Descriptions), 572.023 (Contents of Financial Statement in General), 572.024 (Information About Services for Lobbyists or Lobbyist Employers), and 572.0252 (Information About Referrals), Government Code.  Requires the district to keep a copy of a financial statement filed under this section in the main office of the district. 

 

Sec.  8C. (a)  Authorizes a director to be recalled for:

 

(1)  incompetency or official misconduct as defined by Section 21.022 (Definitions), Local Government Code;

 

(2)  conviction of a felony;

 

(3) incapacity;

 

(4)  failure to file a financial statement as required by Section 8B(f) of this Act;

 

(5)  failure to complete a training program described by Section 8B(a) or (b) of this Act; or

 

(6) failure to maintain residency in the district.

 

(b)  Requires the board, if at least 10 percent of the registered voters in a single-member voting district of the district submit a petition to the board requesting the recall of the director who serves that single-member voting district, not later than the 10th day after the date the petition is submitted, to mail a written notice of the petition and the date of its submission to each registered voter in the single-member voting district.

 

(c)  Requires the board, not later than the 30th day after the date a petition requesting the recall of a director is submitted, to order an election on the question of recalling the director.

 

(d)  Authorizes a recall election under this section to be held on any uniform election date.

 

(e)  Provides that if a majority of the voters of a single-member voting district voting at an election held under this section favor the recall of the director who serves that single-member voting district, the director is recalled and ceases to be a director.

 

Sec.  10A.  Requires that all board reimbursements and expenditures be approved by the board in a regularly scheduled meeting.

 

Sec.  10B.  Prohibits the board from selecting the same auditor to conduct an audit required by Section 49.191 (Duty to Audit), Water Code, for more than three consecutive annual audits.

 

Sec.  43.  (a)  Requires TCEQ to evaluate the condition of the district and determine whether the district has been sufficiently rehabilitated to enable the district to provide reliable, cost-effective, quality service to its customers.

 

(b)  Authorizes TCEQ, if TCEQ finds that the district has not been rehabilitated, to order the district to implement any part of the rehabilitation plan developed under Section 34.

 

(c)  Authorizes TCEQ, if the district fails to comply with a TCEQ order, to assess a penalty against the district in the manner provided by Section 13.4151 (Administrative Penalty), Water Code.

 

SECTION 3.04.  (a)  Provides that Section 8, Chapter 306, Acts of the 49th Legislature, Regular Session, 1945, as added by this Act, applies only to a member of the board who is elected to the board on or after the effective date of this Act.

 

(b)  Makes application of Section 8A, Chapter 306, Acts of the 49th Legislature, Regular Session, 1945, as amended by this Act, to a member of the board who is elected to the board on or after the effective date of this Act, prospective.

 

(c)  Requires the district, for two of the numbered single-member district director's positions that expire in 2012, to call and hold an election on a uniform election date in that year to elect the directors for those positions for terms that expire on the uniform election date in November 2013.  Requires the district, for the other two director's positions that expire in 2012, to call and hold an election on a uniform election date in that year to elect the directors for those positions for terms that expire on the uniform election date in November 2014.  Requires the district to determine by lot which single-member districts shall elect directors to serve one-year terms and which single-member districts shall elect directors to serve two-year terms.

 

ARTICLE 4.  TRANSFER OF DISTRICT ASSETS AND LIABILITIES IF VOTERS DISSOLVE THE BEXAR METROPOLITAN WATER DISTRICT UNDER ARTICLE 2

 

SECTION 4.01.  Amends Chapter 306, Acts of the 49th Legislature, Regular Session, 1945, by adding Sections 50, 51, 52, 53, 54, and 55, as follows:

 

Sec. 50.  (a)  Provides that the term of each person who is serving as a director of the district on the date the election results are certified to SOS as authorized by Article 2 or 2A of the Act enacting this section expires on that date.

 

(b)  Provides that on the date the election results are certified to SOS, the system assumes control of the operation and management of the district, subject to Sections 52 and 53 of this Act and other law applicable to the system.

 

(c)  Requires TCEQ, not later than the 90th day after the date the election results are certified to SOS, in consultation with the committee, to transfer or assign to the system all:

 

(1)  rights and duties of the district, including existing contracts, duties, 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)  Requires a state agency, to the extent that the transfer of an item listed in Subsection (c) of this section requires the approval of the state agency, to grant approval without additional notice or hearing.

 

(e)  Requires TCEQ, after TCEQ has transferred the property, assets, and liabilities as prescribed by this section, to enter an order dissolving the district.

 

Sec. 51.  (a)  Provides that this Act does not enhance or harm the position of a contracting party.

 

(b)  Prohibits any law or charter provision from being construed to limit the system's performance of an obligation under a contract transferred or assigned to the system as a result of the dissolution of the district, if revenue from the contract was pledged wholly or partly to pay debt service on revenue bonds approved by the attorney general.

 

Sec. 52.  (a)  Requires the system, not later than five years after the date the election results were certified in favor of dissolution under Article 2 or 2A of the Act enacting this section, to integrate the services and infrastructure of the district into the system in a reasonable and orderly manner.  Authorizes TCEQ, for good cause, to grant an extension to complete integration of not more than three additional years.  Requires the system to base the integration on the consideration of relevant information, including the location and condition of the infrastructure, debt obligations, prudent utility practices and fiscal policies, costs and revenue, and potential impacts on the customers of the district and the system.

 

(b)  Requires the system, during the integration period described by Subsection (a) of this section, to provide an annual report on the progress of integration to TCEQ, including the status of any relevant contract provision.

 

(c)  Authorizes the system, until the date specified in Subsection (a) of this section, to operate the former district as a special project under the system's existing senior lien revenue bond ordinances.

 

(d)  Requires the system, once TCEQ has transferred the assets, obligations, and duties to the system, to 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)  Requires the system, after the integration described by Subsection (a) of this section is complete, to provide water service to former ratepayers of the district in the same manner the system provides water service to other ratepayers of the system.  Provides that the integration is considered complete if the areas of service located in the former district are no longer operated as a special project within the system, 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 the ratepayers of the former district receive water service that meets the requirements of TCEQ.

 

(f)  Authorizes TCEQ, if the system fails to integrate the services and infrastructure of the district into the system in accordance with Subsection (a) of this section, to find the system in violation of the obligation under the system's certificate of convenience and necessity to provide continuous and adequate service.  Authorizes TCEQ to bring an enforcement action against the system, including the imposition of an administrative penalty under Section 13.4151, Water Code.

 

Sec. 53.  (a)  Prohibits the system, for a 24-month period following the transfer of the employment of any employee of the former district, from terminating 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)  Prohibits the system, for a five-year period following the transfer of the employment of any employee of the former district, from terminating 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)  Provides that 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)  Provides that 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. 54.  Requires a state agency at which an administrative or enforcement action is pending against the district to grant the system special consideration and reasonable extensions to identify and resolve the action in a manner satisfactory to the agency.

 

Sec. 55.  (a)  Defines, in this section, "advisory committee."

 

(b)  Requires the system, not later than the 60th day after the date the district is dissolved under Section 50 of this Act, to 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)  Requires the advisory committee to include at least 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)  Requires the board, until the integration described by Section 52 of this Act is complete, to:

 

(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 5.  DEADLINES; NOTICE; EFFECTIVE DATE OF ACT

 

SECTION 5.01.  Provides that if a deadline established in Articles 1 through 4 of this Act cannot be met because of a requirement imposed by the federal Voting Rights Act of 1965 (42 U.S.C. Section 1973 et seq.), the deadline is the next available date after the requirement is met.

 

SECTION 5.02.  Provides that 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 5.03.  (a)  Effective date, Articles 1, 2, 2A, and 5 of this Act: upon passage or September 1, 2011.

 

(b)  Effective date, Articles 3 and 4 of this Act: as provided by Articles 2 and 2A of this Act.