N.H. Admin. Code § Env-Sw 1403.05

Current through Register No. 45, November 7, 2024

Section Env-Sw 1403.05 - Local Government Financial Test

(a) A local government proposing to assure its obligations under the state approved local government financial test shall meet the following requirements as applicable:

(1) If the local government has outstanding, rated, general obligation bonds not secured by insurance, a letter of credit, or other collateral or guarantee, all such general obligation bonds shall 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;

(2) The local government shall be included in an outstanding bond issue through the New Hampshire municipal bond bank and shall not be in default; or

(3) The local government shall satisfy each of the following financial ratios based on the local government's most recent audited annual financial statement:

a.The ratio of cash plus marketable securities to total expenditures shall be greater than or equal to 0.05, using available cash and marketable securities held by the local government on the last day of the fiscal year, excluding cash and marketable securities designated to satisfy past obligations or special purposes other than landfill closure such as pensions and capital reserve funds not held for landfill closure purposes; and

b.The ratio of annual debt service to total expenditures shall be less than or equal to 0.20, where total expenditures shall exclude capital outlays, debt repayment, capital reserve funds not expended for landfill closure purposes, trust funds, and pension funds.

(b) The local government proposing to assure its obligations under the state approved local government financial test shall:

(1) Prepare its financial statements in conformity with generally accepted accounting principles for governments; and

(2) Have its financial statements audited by an independent certified public accountant.

(c) A local government shall not be eligible to assure its obligations under the state approved local government financial test if it:

(1) Is currently in default on any outstanding general obligation bonds or outstanding bonds with the New Hampshire municipal bond bank;

(2) Has any outstanding general obligation bonds rated lower than Baa as issued by Moody's or BBB as issued by Standard and Poor's;

(3) Operated at a deficit equal to 5% or more of total annual revenue in each of the past 2 fiscal years; or

(4) Receives an adverse opinion, disclaimer of opinion, or other qualified opinion from the independent certified public accountant auditing its financial statement and negatively impacting the current financial position of the local government.

(d) A local government shall disclose in each comprehensive annual financial report (CAFR) all closure and post-closure care costs and corrective action costs, if any, which the local government has assured through the financial test provisions in 40 CFR 258.50.

(e) Disclosure pursuant to (d) above shall include:

(1) The nature and source of the closure and post-closure care requirements;

(2) The reported liability at the balance sheet date;

(3) The estimated total closure and post-closure care cost remaining to be recognized;

(4) The percentage of landfill capacity used to date; and

(5) The estimated landfill life in years.

(f) Conformance with Governmental Accounting Standards Board Statement 18, No. 101-A, published August, 1993 shall be deemed in compliance with (d) above.

(g) Subject to (h) below, a local government may use the state approved local government financial test to assure closure, post-closure, and corrective action costs that equal up to 43% of the local government's total annual revenue.

(h) If the local government assures other environmental obligations through a financial test, including those associated with underground injection control wells (UIC facilities) under 40 CFR 144.62, petroleum underground storage tank facilities under 40 CFR 280, polychlorinated biphenyls (PCB) storage facilities under 40 CFR 761, and hazardous waste treatment, storage, and disposal facilities under 40 CFR 264 and 265, it shall:

(1) Add those costs to the closure, post-closure, and corrective action costs it seeks to assure through use of the state approved local government financial test; and

(2) Assure that the total shall not exceed 43% of the local government's total annual revenue.

(i) A local government shall obtain an alternate financial assurance instrument as specified in Env-Sw 1403.03 for those costs that exceed the limits set in (g) and (h) above.

N.H. Admin. Code § Env-Sw 1403.05

#6619-B, eff 10-29-97 ; (See Revision Note at chapter heading for Env-Sw 1400) ss by #8459, eff 10-28-05 (formerly Env-Wm 3103.05 )

Amended byVolume XXXIV Number 24, Filed June 12, 2014, Proposed by #10599, Effective 7/1/2014, Expires7/1/2024.