Current through Register Vol. 35, No. 18, September 24, 2024
A local government that satisfies the requirements of
Subsections A through E of this section may demonstrate financial assurance
pursuant to Subsection A of
20.9.10.13
NMAC up to the amount specified in Subsection F of this section for closure,
post-closure care, phase I and phase II assessments, and corrective
action.
A. Financial component. The
local government shall satisfy one of the following:
(1) if the local government has outstanding
general obligations bonds, it must have a current rating of Aaa, Aa, A, or Baa,
as issued by Moody's, or AAA, AA, A, or BBB, as issued by Standard and Poor's
on all outstanding general obligation bonds; or,
(2) if the local government does not have
outstanding general obligation bonds, it must satisfy each of the following
financial ratios based on the local government's most recent audited annual
financial statement: a ratio of cash plus marketable securities to total
expenditures greater than or equal to 0.05; and a ratio of annual debt service
to total expenditures less than or equal to 0.20.
B. The local government shall prepare its
financial statements in conformity with generally accepted accounting
principles for governments and have its financial statements audited by an
independent certified public accountant or appropriate state agency.
C. A local government is not eligible to
assure its obligations using the local government financial test if it is
currently in default on any outstanding general obligation bonds; has any
outstanding general obligation bonds rated lower than Baa as issued by Moody's
or BBB as issued by Standard and Poor's; operated at a deficit equal to five
percent or more of total annual revenue in either of the past two fiscal years;
or receives an adverse opinion, disclaimer of opinion, or other qualified
opinion from the independent certified public accountant (or appropriate state
agency) auditing its financial statement. However, the secretary may evaluate
qualified opinions on a case-by-case basis and allow use of the financial test
in cases where the secretary deems the qualification insufficient to warrant
disallowance of the test.
D. Public
notice component. The local government shall place a reference to all closure,
post-closure care, phase I and phase II assessments, and corrective action
costs assured through the financial test into its comprehensive annual
financial reports (CAFR) and budgets. Upon initial receipt of waste at the
facility, the reference must be included in the next CAFR. In the case of
existing facilities, for closure, post closure care, and the phase I and phase
II assessment, the reference must be included prior to the effective date of
20.9.10.19 NMAC. In the case of corrective action, the reference must be
included not later than 120 days after the corrective action remedy has been
selected in accordance with the requirements of 20.9.9 NMAC, the permit
issuance, or the secretary's decision. For the first year the financial test is
used to assure costs at a particular facility, the reference may instead be
placed in the operation record until insurance of the next available CAFR if
timing does not permit the reference to be incorporated into the most recently
issued CAFR or budget. The reference shall include the amount of each cost
estimate and the year in which the local government expects these costs to be
incurred. References in the budget must occur as budgeted line items if the
activities are to occur in the period covered by the budget, but may appear in
a supplemental data section if the activities will not occur until after the
period covered by the budget.
E.
Record keeping and reporting requirements.
(1)
The local government shall submit the following items to the department:
(a) a letter signed by the local government's
chief financial officer that lists all the current cost estimates covered by a
financial test, as described in Subsection F of 20.9.10.19 NMAC, provides
evidence and certifies that the local government meets the conditions of
Subsections A, B and C of 20.9.10.19 NMAC, and certifies that the local
government meets the conditions of Subsections D and F of 20.9.10.19
NMAC;
(b) the local government's
independently audited year-end financial statements for the latest fiscal year
(except for local governments where audits are required every two years and
where unaudited statements may be used in years when audits are not required),
including the unqualified opinion of the auditor who must be an independent,
certified public accountant or an appropriate state agency that conducts
equivalent comprehensive audits; and
(c) a report to the local government from the
local government's independent certified public accountant or the appropriate
state agency stating that the certified public accountant or state agency has
compared the data in the chief financial officer's letter with the owner's or
operator's most recent independently audited, year-end financial statements,
and in connection with that examination, no matters came to his attention which
caused him to believe that the data in the chief financial officer's letter
should be adjusted; a copy of the supporting documentation shall also be placed
in the facility operating record.
(2) The items required in Subsection E of
20.9.10.19 NMAC must be placed in the facility operating record as follows: in
the case of closure, post-closure care, and the phase I and phase II
assessment, prior to the initial receipt of waste at the facility, or for
existing facilities, prior to the effective date of this part; or in the case
of corrective action, not later than 120 days after the corrective action
remedy is selected in accordance with the requirements of 20.9.9 NMAC, the
permit issuance, or the secretary's decision.
(3) After the initial placement of the items
in the facility's operating record, the local government owner or operator
shall update the information and place the updated information in the operating
record within 180 days following the close of the local government's fiscal
year.
(4) The local government
owner or operator is no longer required to meet the requirements of Subsection
E of 20.9.10.19 NMAC when the owner or operator substitutes alternate financial
assurance as specified in 20.9.10.13 NMAC, or the owner or operator is released
from the requirements of 20.9.10.13 - 20.9.10.23 NMAC in accordance with
Subsection B of 20.9.10.9 NMAC, Subsection B of 20.9.10.10 NMAC, Subsection B
of 20.9.10.11 NMAC, or Subsection B of 20.9.10.12 NMAC.
(5) A local government shall satisfy the
requirements of the financial test at the close of each fiscal year. If the
local government owner or operator no longer meets the requirements of the
local government financial test it shall, within 210 days following the close
of the owner or operator's fiscal year, obtain alternative or supplemental
financial assurance, and place the required submissions for that assurance in
the operating record.
(6) The
secretary, based on a reasonable belief that the local government owner or
operator may no longer meet the requirements of the local government financial
test, may require additional reports of financial condition from the local
government at any time. If the secretary finds that the local government no
longer meets the requirements of the local government financial test, the local
government shall provide alternate financial assurance that meets the
requirements of 20.9.10 NMAC.
F. Calculation of costs to be assured. The
portion of the closure, post-closure care, phase I and phase II assessments,
and corrective action costs which a local government can assure under
20.9.10.19 NMAC is determined as follows:
(1)
if the local government does not assure other environmental obligations through
a financial test, it may assure closure, post-closure care, phase I and phase
II assessments, and corrective action costs in an amount not to exceed 43
percent of the local government's total annual revenue;
(2) if the local government assures other
environmental obligations through a financial test, including those associated
with UIC facilities under
40 CFR
144.62, petroleum underground storage tank
facilities under 40 CFR Part 280, PCB storage facilities under 40 CFR Part 761,
and hazardous waste treatment, storage, and disposal facilities under 40 CFR
Parts 264 and 265, it must add those costs to the closure, post-closure care,
the phase I and phase II assessments, and corrective action costs it seeks to
assure under this paragraph; the total shall not exceed 43 percent of the local
government's total annual revenue;
(3) the local government shall obtain an
alternate financial assurance instrument for those costs that exceed the limits
set in Paragraphs (1) and (2) of Subsection F of 20.9.10.19 NMAC.
