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SPONSOR: |
Aragon |
DATE TYPED: |
03/08/03 |
HB |
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SHORT TITLE: |
Albuquerque Water & Wastewater Takeover |
SB |
793 |
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ANALYST: |
Kehoe |
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APPROPRIATION
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Appropriation
Contained |
Estimated
Additional Impact |
Recurring or
Non-Rec |
Fund Affected |
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FY03 |
FY04 |
FY03 |
FY04 |
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See
Narrative |
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(Parenthesis
( ) Indicate Expenditure Decreases)
Local
Government Division (LGD)
New
Mexico Finance Authority (NMFA)
SUMMARY
Synopsis
of Bill
Senate Bill 793 would
allow Bernalillo County to take over the Albuquerque water and wastewater
utility.
Significant
Issues
Senate Bill 793 would allow Bernalillo County,
without an election, to take over the operation and maintenance of the
Albuquerque municipal water and wastewater utility owned by the City of
Albuquerque. The bill provides that
when the board of county commissioners of Bernalillo County passes an ordinance
for the provision of a countywide water and wastewater utility, Albuquerque
must transfer all real and personal property pertaining to the Albuquerque
water and wastewater utility to the county.
Subsection C of the bill contains non-impairment language protecting the
rights of any bondholders of outstanding bonds of the utility and provides that
all contractual obligations for the utility will be binding on Bernalillo
County.
FISCAL IMPLICATIONS
The New Mexico Finance Authority has two
outstanding loans with the City of Albuquerque totaling $2.9 million and a
binding commitment to make another loan for $3 million. The three loans are secured solely by a
security interest in the water and wastewater utility’s net system revenues. According to NMFA, a change of borrower may
negatively impact the net system revenues and impair the Authority’s security
in the loans.
TECHNICAL ISSUES
According to NMFA, the non-impairment language
contained in Senate Bill 793 needs strengthening and clarification making it
clear that Bernalillo County would be required to take on the debt of the
utility.
OTHER SUBSTANTIVE ISSUES
The City of
Albuquerque utility, according to city contacts, is worth some $5 billion. The city indicates it has a reasonable
dollar amount of bonds outstanding, does not have an extreme amount of debt,
and is not in fiscal trouble.
POSSIBLE QUESTIONS
LMK/sb