1. Water Pollution Control Authority. Regionalization. Bridgeport. Monroe
Water Pollution Control Authority Regionalization Bridgeport Monroe Trumbull Glenn A. Santoro, Esq. Robinson & Cole LLP 280 Trumbull Street Hartford, CT (860)

2. Today’s Topics What is a Regionalization Transaction
Benefits of Regionalization
Challenges of Regionalization
Case Study – Greater New Haven Water Pollution Control Authority

3. What is a Regionalization Transaction?
Statutory basis to create a regional water pollution control authority (the “Authority”):
Sections 22a-500 to 22a-519, inclusive, of the Connecticut General Statutes (the “Act”)
How is the Authority formed?
The legislative bodies of two or more municipalities adopt a concurrent ordinance to create a regional water pollution control authority
The municipalities do not need to be contiguous

4. What is a Regionalization Transaction?
Requirements for the concurrent ordinance:
Name of the Authority
Address of the Authority’s principal office
A statement that the Authority is created pursuant to the Act

5. What is a Regionalization Transaction?
Requirements for the concurrent ordinance (cont’d):
Information regarding the Authority’s directors:
The number, names, addresses, and terms of office of the first directors
Provisions for director compensation, if any
Number of votes to be cast by each director
Method for appointment and removal of directors

6. What is a Regionalization Transaction?
Approval by the State of Connecticut:
The constituent municipalities must prepare and submit a preliminary plan of operation for the Authority to the Commissioner of Environmental Protection and the State Treasurer for review and approval
The Commissioner of Environmental Protection will review the preliminary plan of operation, and after consultation with the Secretary of the Office of Policy and Management, may approve such plan if it is in the furtherance of the environmental protection laws of the State.

7. What is a Regionalization Transaction?
What is typically included in the preliminary plan of operation submitted for State approval?
Description of wastewater system assets to be transferred
Description of the Authority’s organization and management
Financing plan and bonding requirements
Estimated budget and rates

8. What is a Regionalization Transaction?
The Authority is officially formed once:
All of the constituent municipalities have adopted the concurrent ordinance; and
The State has approved the Authority’s preliminary plan of operation.

9. Benefits of Regionalization
The Authority is a separate legal entity
Governed by its own board of directors and officers
Has the ability to:
Issue bonds
Purchase wastewater system assets
Impose fees, rates, charges and penalties and levy assessments on property benefited by the wastewater system

10. Benefits of Regionalization
Governance of the Authority:
Board of Directors – each constituent municipality will have the right to elect one or more directors to the board
The Authority will also have a chairman of the board, to preside over board meetings
The initial chairman should be identified in the concurrent ordinance

11. Benefits of Regionalization
Governance of the Authority (cont’d):
Board of Directors will elect officers of the Authority, which typically includes an Executive Director, Secretary and Treasurer
Board of Directors will adopt bylaws
The bylaws will govern the administration of the Authority’s property and the conduct of its affairs.

12. Benefits of Regionalization
Purchase Wastewater System Assets
The Authority can use the proceeds from the bond issuance to purchase the wastewater system assets of each constituent municipality
The bonds can be secured by a pledge of the Authority’s revenue
Each constituent municipality can deposit the proceeds of the purchase price received from the Authority in:
The general fund of the municipality, to be used for any lawful municipal purpose
A rate stabilization fund for the benefit of that municipality’s users of the regional wastewater system

13. Benefits of Regionalization
Additional Benefits:
The Authority can assume all sewer-related obligations and sewer-related debt of the constituent municipalities
Improves the balance sheets of the constituent municipalities by decreasing liabilities
Authority considered a “municipality” for purposes of receiving grants and loans under the Clean Water Fund Program (Conn. Gen. Stat. Section 22a-517(b))
The Authority may be provided higher “priority” for receipt of funding under the Clean Water Fund Program
Reduced administrative costs for constituent municipalities and economies of scale
More effective and broad based protection of the environment

14. Benefits of Regionalization
Additional Benefits (cont’d):
Strategic planning on a regional basis
Possible arrangements for PILOT payments (payments in lieu of taxes) by the Authority to the constituent municipalities
Sewer expansion must first be approved at the local level, so the Authority cannot expand without local approval
Possible State budget proposal for Fiscal Year that could provide up to $40 million in grants to encourage regionalization among municipalities and $10 million for purchases of heavy equipment

15. Benefits of Regionalization
Details of the Potential Jewish Home for the Elderly Project:
Monroe constructs the Jewish Home, receives economic stimulus, and has access to the sewerage system
Bridgeport and Trumbull share revenues on access to the sewerage system

16. Challenges of Regionalization
General Timeline of Action Items (9 to 12 months):
Adoption of concurrent ordinances
State approval of preliminary plan of operation
Appointment of directors and officers and adoption of bylaws
Adoption of a budget, rates and sewer ordinance, and holding of requisite public hearings
Initial budget must be approved by the Secretary of the Office of Policy and Management

17. Challenges of Regionalization
General Timeline of Action Items (9 to 12 months) cont’d:
Draft and negotiate asset purchase agreement and ancillary documents
Draft and negotiate bond issuance documents
Meet with rating agencies to obtain a rating for the Authority (Standard & Poor’s, Moody’s and Fitch)
Current economic environment will be a challenge

18. Challenges of Regionalization
Establishing User Rates:
Prior to commencing operations, the Authority will need to establish user rates
No changes may be made to the user rates without at least 60 days prior notice to the users and a public hearing

19. Challenges of Regionalization
Establishing User Rates (cont’d):
The user rates must be established so that the Authority has sufficient funds each year, with other revenues (if any), to do the following
Pay the cost of maintaining, repairing and operating its wastewater system;
Pay the principal and interest on outstanding bonds;
Meet any requirements of any resolutions authorizing, or trust indenture securing, outstanding bonds or notes of the Authority;
Make any agreed upon payments in lieu of taxes to municipalities in which the Authority has property; and
Pay all other reasonable and necessary expenses of the Authority.

20. Challenges of Regionalization
Additional Considerations:
Each municipality will not have the same control over the wastewater system as before regionalization
The Authority will be governed by a separate board of directors, and each town may have only one or two appointees on the board
Rates adopted by the Authority may be different than the rates currently charged by each municipality
Municipal revenue sharing proposals can be included as part of the regionalization transaction by including specific covenants in the asset purchase agreement

21. Case Study – GNHWPCA Gabriel Varca – Treasurer
Greater New Haven Water Pollution Control Authority (“GNHWPCA”)
Formed in July 2005 pursuant to the Act
Constituent Municipalities: New Haven, East Haven, Hamden and Woodbridge
GNHWPCA was created to operate the wastewater systems of the constituent municipalities, including the treatment plant located at 345 East Shore Parkway, New Haven

22. Case Study – GNHWPCA Governing Body of the GNHWPCA
Nine member board of directors
Four directors appointed by New Haven
Two directors appointed by East Haven
Two directors appointed by Hamden
One director appointed by Woodbridge
Directors serve for three year terms, which are staggered
Directors are divided into three groups of three
Board elects a chairman, who serves for a one year term
No individual may serve more than two consecutive terms as chairman

23. Case Study – GNHWPCA User Rates (user fee per ccf) – GNHWPCA
User rates of each municipality prior to regionalization -fiscal year ending June 30, 2006:
New Haven: $1.36
Hamden: $2.20
East Haven: $1.95
Woodbridge: $2.70
User rates of the GNHWPCA following regionalization:
FY2006: $1.84
FY2007: $2.14
FY2008: $2.31
FY2009: $2.45

24. Wrap-Up Topics we discussed today:
What is a Regionalization Transaction
Benefits of Regionalization
Challenges of Regionalization
Case Study – Greater New Haven Water Pollution Control Authority

25. For additional information, please contact:
Questions & Answers
For additional information, please contact:
Glenn A. Santoro, Esq.
Gabriel Varca, Treasurer
Robinson & Cole LLP
GNHWPCA
280 Trumbull Street
345 East Shore Parkway
Hartford, CT 06103
New Haven, CT
(860)
(203)