§ 126-117. Utility assets as collateral.

(a)

Land. The land where the water and/or wastewater treatment plants are located shall not be mortgaged, encumbered, sold or transferred without specific approval by the Board. Any such mortgage, encumbrance, sale or transfer of such land without the approval of the Board may result in the land being removed from the Rate Base and/or voiding the Franchise.

(b)

Other assets. Franchisee assets other than land may be used as collateral for bank loans only if the amount of borrowed funds is used to pay for improvements to the Franchisee. Within ten days of the submittal to the lending institution of a loan application, collateralized by other assets, the Franchisee shall submit a copy of the loan application, redacted to remove confidential information, to County Staff along with a list of collateralized other assets, a schedule of the proposed improvements, including, but not limited to, description of the work, name(s) of the contractor and/or supplier, cost and completion date, and the projected cash flow funding and repayment schedule. Any use of other assets as collateral without prior notification to County Staff may result in those assets being removed from the Rate Base and/or voiding the Franchise.

(c)

Reporting requirements. Until the Franchisee's assets are released as collateral, the Franchisee shall report the status of the loan and status of the utility improvements in its Annual Financial Report, filed pursuant to Section 126-116.

(Ord. No. 2016-041, § 2, 9-21-2016)