SB 1697 — CTA/RTA-FUEL RISK MANAGEMENT

*LRB09808621OMW38739b* SB1697 98THEngrossed GENERALLRB098 ASSEMBLY08621 StateOMW of38739 Illinoisb andAN 2014ACT SB1697concerning Introducedlocal 2/15/2013,government. by Sen.

Martin A.

Sandoval SYNOPSIS AS INTRODUCED:

ILCS 3605/54 new ILCS 3615/2.20 from Ch.

111 2/3, par.

702.20 Amends the Metropolitan Transit Authority Act and the Regional Transportation Authority Act.

Provides that the Regional Transportation Authority or a Service Board may enter into an option contract, forward contract, futures contract, swap, cap, or collar agreement with price floors or ceilings, or both, for fuel risk management purposes, subject to the approval of the Board of Directors of the Regional Transportation Authority.

LRB098 08621 OMW 38739 b A BILL FOR SB1697 LRB098 08621 OMW 38739 b AN ACT concerning local government.

The Regional Transportation Authority Act is amended by changing SectionSections 2.203A.09 and 3B.09 as follows:

(70 ILCS 3615/2.20)3615/3A.09) (from Ch.

702.20)703A.09) Sec.

2.20.3A.09.

(a)In Exceptaddition asto otherwiseany limitedpowers byelsewhere thisprovided Act,to the AuthoritySuburban shallBus alsoBoard, it shall have all powersof necessarythe topowers meetspecified itsin responsibilitiesSection and2.20 toof carrythis outAct itsexcept purposes,for including,the butpowers notspecified limitedin to,Section the2.20(a)(v). following powers:

(i)The ToBoard sueshall andalso behave sued;the power:

(ii)(a) Toto investcooperate anywith fundsthe orRegional anyTransportation moniesAuthority notin requiredthe forexercise immediateby usethe orRegional disbursement,Transportation asAuthority providedof inall "Anthe Actpowers relatinggranted toit certain investments of public funds by publicsuch agencies",Act; approved July 23, 1943, as now or hereafter amended;

(iii)(b) Toto make,receive amendfunds andfrom repealthe by-laws,Regional rulesTransportation andAuthority regulations,pursuant to Sections 2.02, 4.01, 4.02, 4.09 and ordinances4.10 notof inconsistentthe withRegional thisTransportation Authority Act, all as provided in the Regional Transportation Authority Act;

(iv)(c) Toto hold,receive sell,financial sellgrants byfrom installmentthe contract,Regional leaseTransportation Authority or a Service Board, as lessor,defined transferin orthe disposeRegional ofTransportation suchAuthority realAct, orupon personalsuch propertyterms and conditions as itshall deemsbe appropriateset forth in a grant contract between either the exerciseDivision ofand itsthe Regional SB1697 Engrossed - 2 - LRB098 08621 OMW 38739 b powersTransportation Authority or tothe provideDivision forand theanother useService thereofBoard, bywhich anycontract transportationor agencyagreement andmay tobe mortgage,for pledgesuch number of years or otherwiseduration grantas securitythe interestsparties agree, all as provided in anythe suchRegional property;Transportation Authority Act;

(v)(d) Toto enterperform atall reasonablefunctions timesnecessary uponfor such lands, waters or premises as in the judgmentprovision of theparatransit Authorityservices mayunder beSection necessary,2.30 convenient or desirable for the purpose of making surveys, soundings, borings and examinations to accomplish any purpose authorized by this ActAct; after having given reasonable notice of such proposed entry to the owners and occupants of such lands, waters or premises, the Authority being liable only for actual damage caused by such activity;

(vi) To make and execute(e) allto contractsborrow andmoney otherfor instruments necessary or convenient to the exercisepurposes ofof: its powers;

(vii)(i) Toconstructing entera intonew contractsgarage in the northwestern Cook County suburbs at an estimated cost of group$60,000,000, insurance(ii) forconverting the benefitSouth ofCook itsgarage employeesin andMarkham to providea forCompressed retirementNatural orGas pensionsfacility orat otheran employeeestimated benefitcost arrangementsof for$12,000,000, such(iii) employees,constructing anda tonew assumeparatransit obligationsgarage forin pensionsDuPage orCounty otherat employeean benefitestimated arrangementscost forof employees$25,000,000, ofand transportation(iv) agencies,expanding allthe orNorth partShore ofgarage thein facilitiesEvanston ofto whichaccommodate areadditional acquiredindoor bybus theparking Authority;at an estimated cost of $3,000,000.

(viii)For Tothe providepurpose forof evidencing the insuranceobligation of the Suburban Bus Board to repay any property,money directors,borrowed officers,as employeesprovided orin operationsthis ofsubsection, the AuthoritySuburban againstBus anyBoard riskmay orissue hazard,revenue andbonds from time to self-insuretime orpursuant participateto inordinance jointadopted self-insuranceby poolsthe orSuburban entitiesBus toBoard, SB1697subject -to 3the -approval LRB098of 08621the OMWRegional 38739Transportation bAuthority insureof againsteach such riskissuance orby hazard;the affirmative vote of 12 of its then Directors;

(ix)provided Tothat appear before the IllinoisSuburban CommerceBus CommissionBoard inmay allnot proceedingsissue concerningbonds for the Authority,purpose aof Servicefinancing Boardthe acquisition, construction, or improvement of any transportationfacility agency;other than SB1697 Engrossed - 3 - LRB098 08621 OMW 38739 b those listed in this subsection (e).

andAll (x)such Tobonds passshall allbe ordinancespayable andsolely makefrom allthe rulesrevenues andor regulationsincome proper or necessaryany toother regulatefunds that the use,Suburban operationBus andBoard maintenancemay ofreceive, itsprovided propertythat andthe facilitiesSuburban and,Bus byBoard ordinance,may not pledge as security for such bonds the moneys, if any, that the Suburban Bus Board receives from the Regional Transportation Authority pursuant to prescribeSection fines4.03.3(f) orof penaltiesthe forRegional violationsTransportation thereof.Authority Act.

NoThe finebonds orshall penaltybear shallinterest at a rate not to exceed $1,000the permaximum offense.rate authorized by the Bond Authorization Act and shall mature at such time or times not exceeding 25 years from their respective dates.

AnyBonds ordinanceissued providingpursuant forto anythis fineparagraph must be issued with scheduled principal or penaltymandatory shallredemption bepayments publishedin equal amounts in aeach newspaperfiscal year over the term of generalthe circulationbonds, with the first principal or mandatory redemption payment scheduled within the fiscal year in which bonds are issued or within the metropolitannext region.succeeding fiscal year.

NoAt suchleast ordinance25%, based on total principal amount, of all bonds authorized pursuant to this Section shall takebe effectsold untilpursuant 10to daysnotice afterof itssale publication.and public bid.

TheNo Authoritymore maythan enter75%, intobased arbitrationon arrangements,total whichprincipal mayamount, of all bonds authorized pursuant to this Section shall be finalsold andby binding.negotiated sale.

The Commutermaximum Railprincipal Boardamount shall continue the separate public corporation, known as the Northeast Illinois Regional Commuter Railroad Corporation, as a separate operating unit to operate on behalf of the Commuterbonds Railthat Boardmay commuterbe railroadissued facilities,may subjectnot atexceed all$100,000,000. times to the supervision and direction of the Commuter Rail Board and may, by ordinance, dissolve such Corporation.

SuchThe Corporationbonds shall behave governed by a Board of Directors which shall consist of the members of the Transition Board until such time as all of the membersqualities of thenegotiable Commuterinstruments Railunder Board are appointed and qualified and thereafter the memberslaws of thethis CommuterState. Rail Board.

SuchTo secure the SB1697 Engrossed - 4 - LRB098 08621 OMW 38739 b Corporationpayment shallof haveany or all theof powerssuch givenbonds the Authority and for the Commuterpurpose Railof Boardsetting underforth Articlethe IIcovenants ofand thisundertakings Actof (otherthe thanSuburban underBus SectionBoard 2.13)in asconnection arewith delegatedthe toissuance itthereof byand ordinancethe issuance of theany Commuteradditional Railbonds Boardpayable withfrom regardsuch torevenue suchor operationincome ofas facilitieswell andas the sameuse exemptions,and restrictionsapplication andof limitationsthe asrevenue areor providedincome received by lawthe withSuburban regardBus toBoard, the AuthoritySuburban shallBus applyBoard tomay suchexecute Corporation.and deliver a trust agreement or agreements;

Such Corporation shall be a transportation agency as provided inthat thisno Actlien exceptupon forany purposesphysical property of paragraphthe (e)Suburban ofBus SectionBoard 3.01shall ofbe thiscreated Act.thereby.

TheA Authorityremedy shallfor cooperateany withbreach or default of the Illinoisterms Commerceof Commissionany andsuch localtrust lawagreement enforcementby agenciesthe inSuburban establishingBus aBoard twomay yearbe pilotby programmandamus proceedings in DuPageany Countycourt of competent jurisdiction to determinecompel performance and compliance therewith, but the effectivenesstrust ofagreement anmay automatedprescribe railroadby gradewhom crossingor enforcementon system.whose behalf such action may be instituted.

(b)Under Inno eachcircumstances caseshall inany whichbonds thisissued Actby givesthe Suburban Bus Board or any other obligation of the AuthoritySuburban Bus Board in connection with the powerissuance toof constructsuch bonds be or acquirebecome realan indebtedness or personalobligation property,of the AuthorityState shallof haveIllinois, the powerRegional toTransportation acquireAuthority, suchor propertyany byother contract,political purchase,subdivision gift,of grant,or exchangemunicipality forwithin otherthe propertyState, ornor rightsshall inany property,such leasebonds (oror sublease)obligations be or installmentbecome oran conditionalindebtedness purchaseof contracts,the whichSuburban leasesBus orBoard contractswithin maythe providepurview forof considerationany thereforconstitutional tolimitation or provision, and it shall be paidplainly instated annualon installmentsthe duringface aof periodeach bond that it does not exceedingconstitute 40such years.an indebtedness or obligation but is SB1697 Engrossed - 5 - LRB098 08621 OMW 38739 b payable solely from the revenues or income as aforesaid.

Property(f) mayfor bethe acquiredsole subjectpurposes toof suchprotecting, conditions,managing, restrictions,and liens,insuring oragainst securitythe risk associated with volatile fuel prices, enter into any option contract, forward contract, futures contract, swap, cap, or othercollar interestsagreements ofwith otherprice partiesfloors asor theceilings, Authorityor mayboth, deemfor appropriate,fuel andrisk inmanagement, eachbut caseonly to the Authorityextent maydetermined acquireby athe joint,Board leasehold,of easement,Directors licenseof the Regional Transportation Authority or otherthe SB1697Suburban -Bus 5Board -to LRB098be 08621in OMWthe 38739best binterests partialof interestthe inAuthority suchor property.the Suburban Bus Board.

Any such acquisition may provide for the assumption of, or agreement to pay, perform or discharge outstanding or continuing duties, obligations or liabilities of the seller, lessor, donor or other transferor of or of the trustee with regard to such property.

In connection with the acquisition of public transportation equipment, including, but not limited to, rolling stock, vehicles, locomotives, buses or rapid transit equipment, the Authority may also execute agreements concerning such equipment leases, equipment trust certificates, conditional purchase agreements and such other security agreements and may make such agreements and covenants as required, in the form customarily used in such cases appropriate to effect such acquisition.

Obligations of the Authority incurred pursuant to this Section shall not be considered bonds or notes within the meaning of Section 4.04 of this Act.

(c) The Authority shall assume all costs of rights, benefits and protective conditions to which any employee is entitled under this Act from any transportation agency in the event of the inability of the transportation agency to meet its obligations in relation thereto due to bankruptcy or insolvency, provided that the Authority shall retain the right to proceed against the bankrupt or insolvent transportation agency or its successors, trustees, assigns or debtors for the costs assumed.

The Authority may mitigate its liability under this paragraph (c) and under Section 2.16 to the extent of SB1697 - 6 - LRB098 08621 OMW 38739 b employment and employment benefits which it tenders.

(d) The Authority or a Service Board may, for the sole purposes of protecting, managing, and insuring against the risk associated with volatile fuel prices, enter into any option contract, forward contract, futures contract, swap, cap, or collar agreements with price floors or ceilings, or both, for fuel risk management, but only to the extent determined by the Board of Directors or the governing body of a Service Board to be in the best interests of the Authority or Service Board.