Rule 66a. Section 280.105 is amended to read as
follows:
Section 280.105.
(a) A local government O/O may satisfy the
requirements of section 280.93 by passing the financial test specified in this
section. To be eligible to use the financial test, the local government O/O
shall have the ability and authority to assess and levy taxes or to freely
establish fees and charges. To pass the local government financial test, the
O/O shall meet the criteria of subsection (b)(2) and (3) of this section based
on year-end financial statements for the latest completed fiscal
year.
(b) The local government O/O
shall have all of the following information available, as shown in the year-end
financial statements for the latest completed fiscal year:
(1) Total revenues: Consists of the sum of
general fund operating and nonoperating revenues, including all of the
following:
(i) Net local taxes.
(ii) Licenses and permits.
(iii) Fines and forfeitures.
(iv) Revenues from use of money and
property.
(v) Charges for
services.
(vi) Investment
earnings.
(vii) Sales (property,
publications, and the like).
(viii)
Intergovernmental revenues (restricted and unrestricted).
(ix) Total revenues from all other
governmental funds, including enterprise, debt service, capital projects, and
special revenues, but excluding revenues to funds held in a trust or agency
capacity.
For purposes of this test, the calculation of total
revenues shall exclude all transfers between funds under the direct control of
the local government using the financial test (interfund transfers),
liquidation of investments, and issuance of debt.
(2) Total expenditures: Consists of the sum
of general fund operating and nonoperating expenditures, including all of the
following:
(i) Public safety.
(ii) Public utilities.
(iii) Transportation.
(iv) Public works.
(v) Environmental protection.
(vi) Cultural and recreational.
(vii) Community development.
(viii) Revenue sharing.
(ix) Employee benefits and
compensation.
(x) Office
management.
(xi) Planning and
zoning.
(xii) Capital
projects.
(xiii) Interest payments
of debt.
(xiv) Payments for
retirement of debt principal.
(xv)
Total expenditures from all other governmental funds including enterprise, debt
service, capital projects, and special revenues. For purposes of this test, the
calculation of total expenditures shall exclude all transfers between funds
under the direct control of the local government using the financial test
(interfund transfers).
(3) Local revenues: Consists of total
revenues, as defined in subsection (b)(1) of this section, minus the sum of all
transfers from other governmental entities, including all moneys received from
federal, state, or local government sources.
(4) Debt service: Consists of the sum of all
interest and principal payments on all long-term credit obligations and all
interest-bearing short-term credit obligations. Includes interest and principal
payments on general obligation bonds, revenue bonds, notes, mortgages,
judgments, and interest-bearing warrants. Excludes payments on any of the
following:
(i) Non-interest-bearing
short-term obligations.
(ii)
Interfund obligations.
(iii)
Amounts owed in a trust or agency capacity.
(iv) Advances and contingent loans from other
governments.
(5) Total
funds: Consists of the sum of cash and investment securities from all funds,
including general, enterprise, debt service, capital projects, and special
revenue funds, but excluding employee retirement funds, at the end of the local
government's financial reporting year. Includes federal securities, federal
agency securities, state and local government securities, and other securities,
such as bonds, notes, and mortgages. For purposes of this test, the calculation
of total funds shall exclude agency funds, private trust funds, accounts
receivable, value of real property, and other non-security assets.
(6) Population consists of the number of
people in the area served by the local government.
(c) The local government's year-end financial
statements, if independently audited, cannot include an adverse auditor's
opinion or a disclaimer of opinion. The local government cannot have
outstanding issues of general obligation or revenue bonds that are rated as
less than investment grade.
(d) The
local government O/O shall have a letter signed by the chief financial officer
worded as specified in subsection (e) of this section.
(e) To demonstrate that it meets the
financial test under subsection (b) of this section, the chief financial
officer of the local government O/O shall sign, within 120 days of the close of
each financial reporting year, as defined by the 12-month period for which
financial statements used to support the financial test are prepared, a letter
worded exactly as follows, except that the instructions in brackets are to be
replaced by the relevant information and the brackets deleted:
Letter from Chief Financial Officer
I am the chief financial officer of [insert: name and
address of the owner or operator]. This letter is in support of the use of the
local government financial test to demonstrate financial responsibility for
[insert: "taking corrective action" and/or "compensating third parties for
bodily injury and property damage"] caused by [insert: "sudden accidental
releases" and/or "nonsudden accidental releases" or "accidental releases"] in
the amount of at least [insert: dollar amount] per occurrence and [insert:
dollar amount] annual aggregate arising from operating [an] underground storage
tank[s].
Underground storage tanks at the following facilities are
assured by this financial test [list for each facility: the name and address of
the facility where tanks assured by this financial test are located. If
separate mechanisms or combinations of mechanisms are being used to assure any
of the tanks at this facility, list each tank assured by this financial test by
the tank identification number provided in the notification submitted pursuant
to 40 C.F.R. Part 280.22 or the corresponding state requirements.]
This owner or operator has not received an adverse
opinion, or a disclaimer of opinion from an independent auditor on its
financial statements for the latest completed fiscal year. Any outstanding
issues of general obligation or revenue bonds, if rated, have a Moody's rating
of Aaa, Aa, A, or Baa or a Standard and Poor's rating of AAA, AA, A, or BBB; if
rated by both firms, the bonds have a Moody's rating of Aaa, Aa, A, or Baa and
a Standard and Poor's rating of AAA, AA, A, or BBB.
Worksheet for Municipal Financial Test
PART I, BASIC INFORMATION
1. Total Revenues
(a) Revenues (dollars) $ _____
Value of revenues excludes liquidation of investments and
issuance of debt.
Value includes all general fund operating and
non-operating revenues, as well as all revenues from all other governmental
funds including enterprise, debt service, capital projects, and special
revenues, but excluding revenues to funds held in a trust or agency
capacity.
(b) Subtract
interfund transfer (dollars) $ _____
(c) Total Revenues (dollars) $
_____
2. Total
Expenditures
(a) Expenditures (dollars) $
_____
Value consists of the sum of general fund operating and
non-operating expenditures including interest payments on debt, payments for
retirement of debt principal, and total expenditures from all other
governmental funds including enterprise, debt service, capital projects, and
special revenues.
(b)
Subtract interfund transfers (dollars) $ _____
(c) Total expenditures (dollars) $
_____
3. Local Revenues
(a) Total Revenues (from 1c) (dollars) $
_____
(b) Subtract total
intergovernmental transfers (dollars) $ _____
(c) Local revenues (dollars) $
_____
4. Debt Service
(a) Interest and fiscal charges (dollars) $
_____
(b) Add debt retirement
(dollars) $ _____
(c) Total debt
service (dollars) $ _____
5. Total funds (dollars) $ _____
(Sum of amounts held as cash and investment securities
from all funds, excluding amounts held for employee retirement funds, agency
funds, and trust funds)
6.
Population (persons)
PART II. APPLICATION OF TEST
7. Total Revenues to Population
(a) Total revenues (from 1c)
(b) Population (from 6)
(c) Divide 7a by 7b
(d) Subtract 417
(e) Divide by 5,212
(f) Multiply by 4.095
8. Total Expenses to Population
(a) Total expenses (from 2c)
(b) Population (from 6)
(c) Divide 8a by 8b
(d) Subtract 524
(e) Divide by 5,401
(f) Multiply by 4.095
9. Local Revenues to Total Revenues
(a) Local Revenues (from 3c)
(b) Total Revenues (from 1c)
(c) Divide 9a by 9b
(d) Subtract .695
(e) Divide by .205
(f) Multiply by 2.840
10. Debt Service to Population
(a) Debt Service (from 4d)
(b) Population (from 6)
(c) Divide 10a by 10b
(d) Subtract 51
(e) Divide by 1,038
(f) Multiply by -1.866
11. Debt Service to Total Revenues
(a) Debt Service (from 4d)
(b) Total Revenues (from 1c)
(c) Divide 11a by 11b
(d) Subtract .068
(e) Divide by .259
(f) Multiply by -3.533
12. Total Revenues to Total Expenses
(a) Total Revenues (from 1c)
(b) Total Expenses (from 2c)
(c) Divide 12a by 12b
(d) Subtract .910
(e) Divide by .899
(f) Multiply by 3.458
13. Funds Balance to Total Revenues
(a) Total Funds (from 5)
(b) Total Revenues (from 1c)
(c) Divide 13a by 13b
(d) Subtract .891
(e) Divide by 9.156
(f) Multiply by 3.270
14. Funds Balance to Total Expenses
(a) Total Funds (from 5)
(b) Total Expenses (from 2c)
(c) Divide 14a by 14b
(d) Subtract .866
(e) Divide by 6.409
(f) Multiply by 3.270
15. Total Funds to Population
(a) Total Funds (from 5)
(b) Population (from 6)
(c) Divide 15a by 15b
(d) Subtract 270
(e) Divide by 4,548
(f) Multiply by 1.866
16. Add 7f + 8f + 9f + 10f + 11f + 12f + 13f
+ 14f + 15f + 4.937.
I hereby certify that the financial index shown on line
16 of the worksheet is greater than zero and that the wording of this letter is
identical to the wording specified in 40 C.F.R. Part 280.105(c) as such
regulations were constituted on the date shown immediately below.
[Signature]
[Name]
[Title]
[Date]
(f) If a local government O/O using the test
to provide financial assurance finds that it no longer meets the requirements
of the financial test based on the year-end financial statements, then the O/O
shall obtain alternative coverage within 150 days of the end of the year for
which financial statements have been prepared.
(g) The director of the implementing agency
may require reports of financial condition at any time from the local
government O/O. If the director finds, on the basis of the reports or other
information, that the local government O/O no longer meets the financial test
requirements of (b) to (e), then the O/O shall obtain alternate coverage within
30 days after notification of the finding.
(h) If the local government O/O fails to
obtain alternate assurance within 150 days of finding that it no longer meets
the requirements of the financial test based on the year-end financial
statements or within 30 days of notification by the director of the
implementing agency that it no longer meets the requirements of the financial
test, then the O/O shall notify the director of the failure within 10
days.
