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House of Representatives
Session of 2017 - 2018 Regular Session


Posted: December 7, 2016 10:04 AM
From: Representative Robert W. Godshall
To: All House members
Subject: Municipal Authorities Legislation
In the near future, I will be re-introducing legislation to amend Title 53 (Municipalities Generally) to provide greater transparency over municipal authority acquisitions and enhance annual reporting requirements for municipal authorities. This legislation was previously introduced as HBs 66 and 253 (2015-2016.)

The bill first clarifies a current provision of Title 53 regarding annual reporting by municipal authorities by requiring an annual report to be filed with the Department of Community and Economic Development (DCED), the municipality or municipalities that created the authority and any municipality that has customers served by the authority. Under current law, annual reporting is only required to be filed with DCED and the incorporating authority or authorities. Reports must be filed on forms prepared and distributed by DCED. Enhanced reporting requirements will ensure openness and accountability of municipal authorities and allow any municipality whose residents received services to review the fiscal affairs of the servicing authority.

This bill also addresses the issue of municipal authority acquisitions and sales. Municipal authorities often buy, lease or otherwise acquire additional projects thereby expanding the scope of operations to reach a larger population. As an authority’s service territory increases, so does the possibility that proposed expansions may impact the rates or service of current ratepayers. Similarly, when authorities sell or transfer water or sewer infrastructure ratepayers are also impacted and it is often unclear how service quality, reliability and customer rates will be effected.

Under current law, a municipal authority seeking to acquire additional facilities must only obtain approval from member municipalities to move forward with the purchase. While the decision to acquire additional facilities must be approved at a scheduled public meeting of the authority, current ratepayers may not be aware of exactly how a transaction may affect their rates or service.

This bill also requires municipal authorities to hold an advertised public meeting and clearly demonstrate the anticipated or projected public benefit any acquisition or sale would have on current ratepayers, including but not limited to, rate reduction, improved service quality, and increased service reliability. The bill would also require the anticipated benefits to be published in the record meeting minutes. By increasing the transparency of acquisition decisions, authorities will be held to a higher degree of public accountability.

Introduced as HB104