(1) To use a
financial test to meet the financial responsibility requirements of s.
ATCP 93.705, a local government owner or operator shall
pass the financial test specified in this section. To be eligible to use the
financial test, the local government owner or operator 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 owner or operator shall meet
the criteria of this section based on year-end financial statements for the
latest completed fiscal year.
(2)
The local government owner or operator shall have the following information
available, as shown in the year-end financial statements for the latest
completed fiscal year:
(a) Total revenues
consisting of the sum of general fund operating and non-operating revenues
including net local taxes, licenses and permits, fines and forfeitures,
revenues from use of money and property, charges for services, investment
earnings, sales of assets such as property and publications, restricted and
unrestricted intergovernmental revenues, and 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 excludes
all transfers between funds under the direct control of the local government
using the financial test, liquidation of investments and issuance of
debt.
(b) Total expenditures
consisting of the sum of general fund operating and non-operating expenditures
including public safety, public utilities, transportation, public works,
environmental protection, cultural and recreational, community development,
revenue sharing, employee benefits and compensation, office management,
planning and zoning, capital projects, 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. For purposes of this test, the calculation of total
expenditures excludes all transfers between funds under the direct control of
the local government using the financial test.
(c) Local revenues consisting of total
revenues, as defined in par. (a), minus the sum of all transfers from other
governmental entities, including all monies received from federal, state, or
local government sources.
(d) Debt
service consisting of the sum of all interest and principal payments on all
long-term credit obligations and all interest-bearing short-term credit
obligations. For purposes of this test, debt service includes interest and
principal payments on general obligation bonds, revenue bonds, notes,
mortgages, judgments, and interest bearing warrants. For purposes of this test,
debt service excludes payments on non-interest-bearing short-term obligations,
interfund obligations, amounts owed in a trust or agency capacity, and advances
and contingent loans from other governments.
(e) Total funds consisting 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. For purposes of this test, the calculation of total funds 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 excludes agency funds,
private trust funds, accounts receivable, value of real property, and other
non-security assets.
(f) Population
consisting of the number of people in the area served by the local
government.
(3) The local
government's year-end financial statements, if independently audited, may not
include an adverse auditor's opinion or a disclaimer of opinion. The local
government may not have outstanding issues of general obligation or revenue
bonds that are rated as less than investment grade.
(4) To demonstrate that it meets the
financial test of this section, the chief financial officer of the local
government owner or operator, 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 which is
identical to the letter specified in
40 CFR
280.105(c), except for the
following:
(a) The instructions in brackets
in the letter shall be replaced by the relevant information and the brackets
deleted.
(b) If financial
responsibility for aboveground tanks within the scope of this subchapter is
demonstrated using this method, all of the following changes shall be made:
1. Reference in the letter to underground
tanks shall be amended to refer to aboveground tanks.
2. Certification that wording is identical to
the wording required in
40 CFR
280.105(c) shall be deleted.
Note: A link to 40 CFR 280 is available at the
following EPA Web site: http://www.epa.gov/oust/fedlaws/cfr.htm.
(5) If a local government owner or operator
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,
the owner or operator shall obtain alternative coverage within 150 days of the
end of the year for which financial statements have been prepared.
(6) The department may require reports of
financial condition at any time from the local government owner or operator. If
the department finds that the local government owner or operator no longer
meets the financial test requirements of this section, the owner or operator
shall obtain alternate coverage within 30 days after notification of such a
finding.
(7) If the local
government owner or operator 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 department that it no longer meets the requirements of the financial test,
the owner or operator shall notify the department of such failure within 10
days.
