AGENDA ITEM #13

April 10, 2012

Public Hearing

MEMORANDUM

April 5, 2012

TO:

County Council

FROM:

SUBJECT:

Jacob Sesker, Senior Legislative Analyst

(/6

Public Hearing:

Expedited Bill 12-12, Bond Authorization - Stonnwater

Management

Expedited Bill 12-12, Bond Authorization Stonnwater Management, sponsored by the Council

President at the request of the County Executive, was introduced on March 20, 2012. Action is

tentatively scheduled for April 17.

Bill 12-12 authorizes the County to issue special limited obligation bonds for the purposes of

financing the planning, design, acquisition, and construction of stonnwater management facilities and

other related projects.

This packet contains

Expedited Bil112-12

Legislative Request Report

Memo from County Executive

Fiscal and Economic Impact Statement

Circle

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f:\law\biHs\ 1212 bond authorization-stonnwater management\ph memo. doc 04/05/12 II: 12 AM



Exped ited Bill No. ..!.,!12=....-..!.,!12:::---:--:-:_ _

Concerning: Bond Authorization -

Stormwater Management

Revised:

3/9/2012

Draft No._1_

Introduced:

March 20,2012

Expires:

September 20, 2013

Enacted: _ _ _ _ _ _ _ _ __

Executive: _ _ _ _ _ _ _ __

Effective: _ _ _ _ _ _ _ _ __

Sunset Date: ......

N-'-'o""'n~e-:----:

_ _ __

Ch. _ _, Laws of Mont. Co. _ __

COUNTY COUNCIL

FOR MONTGOMERY COUNTY, MARYLAND

By: Council President at the Request of the County Executive

AN EXPEDITED ACT

to authorize the County to issue special limited obligation bonds to

finance the planning, design, acquisition, and construction of stormwater management facilities

and related projects.

By adding to the Laws of Montgomery County 2012

Boldface

Underlining

[Single boldface brackets]

Double underlining

[[Double boldface brackets]]

* * *

Heading or defined term.

Added to existing law by original bill.

Deletedfrom existing law by original bill.

Added by amendment.

Deletedfrom existing law or the bill by amendment.

Existing law unaffected by bill.

The County Council for Montgomery County, Maryland approves the following Act:



EXPEDITED BILL

No. 12-12

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Sec. 1. The following is added to the Laws of Montgomery County

2012:

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(a)

The County may at any time and from time to time sell in one or more

series an aggregate principal amount not to exceed $95,000,000 in

special limited obligation bonds (the "Bonds") authorized under the

authority of Section 5(P)(2) of Article 25A of the Maryland Code

Title 4 of the Environmental Article of the Maryland Code ("Title

4"), as amended and Chapter 19 of the County Code, as amended to

finance the planning, design, acquisition, and construction of

stormwater management facilities and related projects as approved in

the County's Capital Improvements Program.

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(b) The Bonds are special limited obligations of the County and must not

constitute a pledge of the full faith and credit and unlimited taxing

power of the County. The Bonds must be payable by the County from

its water quality protection charges authorized to be imposed on

certain real property in the County under Title 4 and Section 19-35 of

the County Code (the "Water Quality Protection Charge") and

deposited into the stormwater management fund (the "Fund"). To pay

the interest and redeem and pay the Bonds authorized by this Act as

they respectively mature, the County must impose the Water Quality

Protection Charge in each fiscal year in an amount sufficient to

provide for the payment, when due, of the principal of and interest on

all Bonds maturing in each fiscal year and all other costs and expenses

authorized for payment and determined to be paid by the County from

the Fund in that fiscal year under Chapter 19. If the revenue derived

from the Water Quality Protection Charge imposed in any fiscal year

proves inadequate for the listed purposes, additional charges must be

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EXPEDITED BILL

No. 12-12

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imposed in the next fiscal year to make up any deficiency.

The

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County may apply to the payment of the principal of and interest on

the Bonds and such other costs and expenses any other funds legally

available and deposited to the Fund. To the extent such funds are

received or are receivable in any fiscal year, the amount of the Water

Quality Protection Charge required to be imposed may be reduced

accordingly.

(c)

The Bonds may be sold for a price at or above par, plus accrued

interest to the date of delivery. The County Executive may sell the

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Bonds through a public sale or through a private (negotiated) sale

without solicitation of competitive bids, as the COUlity Executive by

executive order after consulting the Director of Finance finds to be in

the best interests of the County. Any sale of the Bonds by private

negotiation is for the County's best interest.

(d)

In accordance with this Act, the County Executive may determine by

Executive Order, for each Bond or series of Bonds issued under this

Act, all matters relating to the sale, issuance, delivery and payment of

the Bonds, including the purposes for which the Bonds are issued, the

date or dates of sale of the Bonds, the designation of the Bonds, the

date of delivery of the Bonds, the authorized denominations for the

Bonds, the redemption provisions, if any, pertaining to the Bonds, the

manner of authentication and numbering of the Bonds, the date from

which interest on the Bonds accrues, the rate or rates of interest borne

by the Bonds or the method of determining the rates, the interest

payment and maturity dates of the Bonds, including provisions for

mandatory sinking fund redemption of any term bonds, the forms of

the Bonds, whether the Bonds are to be issued in book-entry form and

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Bond Authorization-Stormwater Management\BilIl.Doc



EXPEDITED BILL

No. 12-12

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all matters incident to the issuance of Bonds in book-entry form, and

the provisions for the registration of Bonds.

The execution and

delivery of Bonds is conclusive evidence of the approval of all terms

and provisions of the Bonds on behalf of the County.

(e)

Except as otherwise provided in an Executive Order, the Bonds must

be executed in the name of the County and on its behalf by the County

Executive, whose signature may be by facsimile; an original or

facsimile of the official seal of the County must be imprinted or

otherwise reproduced thereon, attested by the manual or facsimile

signature of the Director of Finance, and authenticated by the manual

or facsimile signature of the Paying AgentlRegistrar or any designated

sIgner.

(f)

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The County hereby covenants that if the County Executive decides to

issue the Bonds as tax-exempt bonds or bonds that must comply with

regulations regarding tax-exempt bonds, the County will take, or

refrain from taking, all actions necessary to comply with Section 103

and Sections 141 through 150 of the Internal Revenue Code,

applicable to the Bonds issued as tax-exempt bonds to preserve the

status of the interest on the Bonds as excluded from gross income for

Federal income tax purposes. Without limiting the generality of the

covenant in the preceding sentence:

(1)

the County must not use or

permit the use of any proceeds of the Bonds issued as tax-exempt

bonds or any funds of the County in a manner as would cause the

interest on the Bonds to be included in gross income for Federal

income tax purposes; (2) the County must regulate the investment of

the proceeds of the Bonds so as not to cause any of the Bonds to be an

"arbitrage bond" within the meaning of Section 148 of the Internal

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Bond Authorization-Stormwater Management\BiIl 1.Doe

t;)



EXPEDITED BILL

No. 12-12

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Revenue Code and the Income Tax Regulations thereunder; (3) the

County must, if and to the extent necessary, make periodic

determinations of the rebate amount and timely pay any rebate

amount, or installment thereof, to the United States of America; (4)

the County must prepare and timely file Internal Revenue Service

Form 8038-G and 8038-B, Information Return for Tax-Exempt

Governmental Obligations; and (5) the County Executive or the

Executive designee must prepare and execute and certify any other

document required to assure compliance with the applicable

prOVISIons of Section 103 and Sections 141 through 150 of the

Internal Revenue Code, and the Income Tax Regulations thereunder.

The County Executive may take any actions necessary or desirable to

assure that any Bonds authorized by this Act are allowed a tax credit,

that the County is entitled to a subsidy from the United States or any

agency or instrumentality thereof with respect to such Bonds or the

interest payable thereon, or the interest thereon is entitled to any other

available benefits under the Internal Revenue Code, as amended.

(g)

In connection with the issuance of any Bonds under this Act, the

County may enter into one or more agreements as the County

Executive finds necessary or appropriate for the issuance, sale,

delivery or security of the Bonds, which may include: (1)

underwriting, purchase or placement agreements for Bonds sold at

private (negotiated) sale in accordance with this Act; (2) trust

agreements with commercial banks or trust companies for the

issuance and security of the Bonds; (3) any dealer, remarketing or

similar agreements for the placement or remarketing of the Bonds; (4)

agreements for any credit or liquidity facilities supporting any Bonds;

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Bond Authorization-Stonnwater Management\Billl.Doc



EXPEDITED BILL NO.

12-12

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(5) agreements with commercial banks or trust companies for the

deposit of proceeds of any Bonds; (6) agreements with fiscal agents

for the issuance of Bonds, their authentication, registration or payment

or other similar services; and (7) continuing disclosure agreements,

including any agreement required to enable the underwriters of any

Bonds to meet the requirements of paragraph (b)(5) of Rule 15c2-12

issued by the Securities and Exchange Commission.

Each such

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agreement must take the form determined by the County Executive by

Executive Order.

(h)

The County Executive, the Chief Administrative Officer, the County

Attorney, the Director of Finance and the Clerk of the Council, on

behalf of the County, may execute all instruments and otherwise take

any action necessary to carry out the authority conferred by this Act.

(i)

The issuance and sale of any bonds under this Act are exempt from

the provisions of Article 31, Sections 9, 10, and 11 of the Maryland

Code.

Sec. 2.

Expedited Effective Date.

The Council declares that this legislation is necessary for the immediate

protection of the public interest. This Act takes effect on the date on which it

becomes law.

Approved:

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Roger Berliner, President, County Council

Date

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Approved:

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Isiah Leggett, County Executive

Date

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Bond Authorization-Stormwater Management\BilIl.Doc



LEGISLAriVE REQUEST REPORT

Expedited Bill 12-12

Bond Authorization

-

Stormwater Management

DESCRIPTION:

Legislation to authorize the issuance of special obligation bonds in an

amount not to exceed $95,000,000. The Bonds will be Special

Limited Obligations of the County secured by the Water Quality

Protection Charge and will not constitute a pledge of the full faith

and credit and unlimited taxing power of the County.

An Ordinance is necessary to establish the level of debt that may be

secured by the Water Quality Protection Charge authorized under

Section 19-35 of Chapter 19 of the County Code and to authorize

actions by the County Executive to execute documents related to the

issuance and delivery of Water Quality Protection Charge Revenue

Bonds (the "Bonds").

The goal is to provide new bond authorization for the planning,

design, acquisition and construction of stormwater management

facilities and other related projects. The bonds will be sold in one or

more series in an aggregate amount not to exceed $95,000,000 as

currently approved for projects in the FYll-16 Amended Capital

Improvements Program to be funded by Water Quality Protection

Charge bonds.

This bill is new legislation that does not duplicate or overlap existing

law.

Future annual debt service costs are incurred at the time the bonds are

actually sold, and are included in the Approved Operating Budget

and Annual Appropriations for Debt Service.

To be requested.

To be requested.

To be researched.

Jacob Sesker, Senior Legislative Analyst, 240-777-7942

To be researched.

PROBLEM:

GOALS AND

OBJECTIVES:

COORDINATION:

FISCAL IMPACT:

ECONOMIC

IMPACT:

EVALUATION:

EXPERIENCE

ELSEWHERE:

SOURCE OF

INFORMATION:

APPLICATION

WITHIN

MUNICIPALITIES:

PENALTIES:

Not applicable

f:\sesker\word\bonds\bond authorization-stormwater management\lrr .dot



OFFICE OFTHE COUNTY EXECUTIVE

ROCKVILLE, MARYLAND 20850

lsiah

Leggett

County Executive

MEMORANDUM

March 2,2012

TO:

FROM:

SUBJECT:

Roger Berliner, President

Montgomery County Council

IsiahLeggett

~

County Executive

~~

-

r

0

~

.

.

Legislation Related to Special Limited Obligation Bonds FiJ;lanced by the Water Quality

Protection Charge

I

am transnlitting the attached bill to authorize the County to issue Special Limited

Obligation Bonds for the purpose of fmancing the planning, design, acquisition and c,onstruction of

stormwater management facilities and other related projects. The bill was prepared by the County's bond

counsel, McKennon Shelton

&

Henn

LLP, approved by the

Coun~y

Attorney for legal sufficiency and

reviewed by the Department of Finance.

An

Ordinance is necessary to establish the level of debt that

may be secured by the Water Quality Protection Charge authorized under Section 19-35 of Chapter 19 of

the County

Code

and to authorize actions by the County Executive

to

execute docUments related to the

issuance and delivery of Water

Quality

Protection Charge Revenue Bonds (the "Bonds").

The Bonds will be sold in one or more series in an aggregate amount not to exceed

$95,000,000 as currently'approved for projects in the FYl1-16 Amended Capital Improvements Program

to

be

funded by Water Quality Protection Charge (WQPC) Revenue Bonds.

The

Bonds will be special

limited obligations of the County secured by the WQPC and will not constitute a pledge of the full faith

and credit and unlimited

taxing power

of the County. The

Water

Quality

Protection

Charge

will

be set

annually

at a

rate to provide for payment of debt service on the Bonds and other costs of the stormwater

management program authorized

to

be paid from the Charge.

] recommend that this bill be enacted on an expedited basis

in

order to comply with the

need for a late spring 2012 bond issue.

If you have any questions please contact Joseph

F.

Beach

at

extension

7-8870.

IL:jc

Attachments

co: Robert Hoyt, Director, DEP

Jennifer Hughes, Director, OlVfB



ROCKVILLE, MARYLAND

MEMORANDUM

April 3, 2012

TO:

Roger Berliner, President, County Council

.FROM:

lennifer

A.

Hughes, Director, Office

Joseph F. Beach, Director, Department

ofFinanc~

ofMan~~ud

p----

Q

.

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, Wy

iI-:J

SUBJECT:

Expedited

BHl 12-12

Bond Authorization

Stormwater

Management

Attached please

find

the

fiscal and economic impact

statements for

the above

referenced

legislation.

JAH:mz

c:

Kathleen

Boucher,

Assistant Chief Administrative

Officer

Lisa Austin. Offices ofthe County Executive

Joy

Nurmi, Special

Assistant to the County

Executive

Patrick Lacefield,

Director,

Public

Information

Office

Alex Espinosa,

Office

ofManagement and Budget

Robert Hoyt, Director, Deparbnent ofEnvironmemal Protection

Steven Shofar, Department ofEnvironmentaJ

Protection

Craig Carson, Department of Environmental Protection

Gladys Balderrama, Department of Environmental Protection

Jacqueline

Carter,

Department ofFinance

Michael Coveyou, Department ofFmance

Mary Beck, Office of Management and Budget

Ed Piesen, Office of Management and Budget

Monica Zaleski, Office ofManagement and Budget

Naeem Mia, Office ofManagement and Budget



F:isad

Impact Statement

Expedited Council

Bill

12-12 - Bond AuthomatioB - Stormwater ManagemeBt

1. Legislative Summary

This

is an expedited act to authorize the County to issue Special Limited Obligation

Bonds to finance the planning, design, acquisition, and construction ofstormwater

management facilities and related projects

in

the County. The Bonds, not to exceed

$95,000,000,

will

be

Special Limited Obligations of the County secured by the Water

Quality Protection Charge and will not constitute a pledge ofthe full faith and credit and

unlimited taxing

power

of

the

County.

2.

An

estimate of changes

in

County revenues and expenditures regardless ofwbether

the revenues or expenditures are assumed

in

the recommended or approved budget.

Includes source of information, assumptions, and methodologies used.

The County revenue and expenditure estimates will be detennined by the specific am01IDt

of bonds issued. and the amount ofdebt service incorporated

into

the annual operating

budget for stormwater management. This bill only authorizes the issuance ofthe Special

Limited Obligation Bonds.

3. Revenue and expenditure estimates covering at least the next 6

flSeal

years.

The revenue and expenditure estimates for the next 6

fiscal

years will be determined by

the specific amount of bonds issued and the amount of debt service incorporated into

the

annual operating budgets for stormwater management. This bill only authorizes the

issuance ofthe Special Limited Obligation Bonds.

4.

An

actuarial analysis through the entire amortization period for each bill that would

affect retiree pension or group insurance costs.

Not applicable. There are no personnel costs associated with this bill.

5. Later actions that may affect future revenue and expenditures

if

the bill authorizes

future spending.

Any

future

revenue and expenditures resulting from the enactment ofthis bill and the

amount ofbonds issued by the County will

be

addressed during the annual

budget

process. This bill only authorizes the issuance ofthe Special Limited Obligation Bonds;

the amount ofdebt service is not yet known.

6.

An

estimate of the staff time needed

to

implement the bilL

No additional staff time

is

required from the Department of Environmental Protection.

The bill

will

be implemented

by

the Department of Finance.

1



7. An explanation of how the addition of new staff responsibilities would affect other

duties.

There is no additional staff responsibilities associated with this bill.

See

item #6.

8.

An

estimate of costs when an additional appropriation is needed.

Additional appropriation for debt service will be detennined by the amount of bonds

issued by the County. Future annual debt service costs are incurred

at

the time the bonds

are

actually

sold and are included in the Approved

Operating

Budget and Annual

Appropriations for Debt Service.

9. A description of any variable that could affect revenue and cost estimates.

Not applicable.

10. Ranges of revenue or expenditures that are uncertain or diftleult to project.

Not applicable.

11.

If

a bill is likely to have no fiscal impact, why that is the case.

This bill only authorizes the issuance of the Special Limited Obligation Bonds. The fiscal

impact

will be

detennined

by the specific amount ofbonds issued and the amount of debt

service inCorporated

into

the annual operating budget.

12. Other

rneal

impacts or comments.

There are no other fiscal impacts resulting from

this

bill.

13. The following contributed to and concurred

with

this analysis: (Enter name and

department).

Robert Hoyt, Director, Department ofEnvironmental Protection

Steven Shofar, Department ofEnvironmental Protection

Craig Carson, Department ofEnvironmental Protection

Gladys Balderrama, Department ofEnvironmental Protection

Jacqueline Carter, Department ofFinance

Michael Coveyou, Department ofFinance

Mary

Beck, Office of Management

and

Budget

Ed Piesen, Office of Management and Budget

Monica

Zal~

Office ofManagement

and

Budget

Naeem Mia, Office ofManagement and Budget

2



Date

3

@



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Economic Impact Statement

Expedited Council BiU 12-12

Bond Authorization - Stormwater Management

Background:

This is an expedited act to authorize the County to issue specialUmited obligation bonds

to

finance the planning. design, acquisition, and construction ofstormwater management

facilities and related projects

in

the County. The Bonds. not to exceed $95,000,000, will

be

Special Limited Obligations ofthe County secured by the Water Quality Protection

Charge and

will

not constitute a pledge of the full faith and credit and unlimited taxing

power of the County.

.

1. The sources ofinformation, assumptions, and methodologies used.

Not applicable-this is a Bond Authorization and as such has no economic impact

2. A description of any variable that could affect the economic impact estimates.

Not applicable-this is a Bond Authorization and as such has no economic impact

3. "The Bill's positive or negative effect. ifany on employment, spending, saving,

investment, incomes, and property values in the County.

Not appUcable-this is a Bond Authorization and as such has no economic impact

4. If a Bill is likely to have no economic impact, why is that the case?

Not applicable-this is a Bond Authorization and as such

has

no economic impact

5. The following contributed to and concurred with this analysis: David Platt and Mike"

Coveyoll, Finance