L,
B.
Members
.
Esjarii* Gsupw
A
FOR THE
THE
,
UNDERTHE
This report not been reviewed for approval by the
U.S. Environmental Protection Agency; and hence, the'-views
and opinions expressed in the report do not necessarily
represent those of the Agency or any other agencies in the
Federal Government.
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M.
Adnumstratof'
U.S. "
D.C 20460
On1 of the we are
to to
la this the in a,
on the we
In the of the NAFTA and
in the for
He the of and
in to the a and of the
NAFTA We the of a in one or
in of A would
as: and to and
fee to of and
for the and
the and, a of and
at the These should be as of
and be as the first to be by the NAFTA
They also as for NAFTA
The in this and In our on
are In the current ie. the .
(BECC) and the North
to and a the The
Board Its to the in as a of the '
BECC and of the We.are at to our
and to any you
Sincerely,
' Executive
' Financial
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Board
of the
. Report on
a Viable Finance Program
for the
Border Environmental Cooperation Commission
/
and
North American Bank
the
North Free Trade
In 1992, the Environmental Advisory Board (EFAB) to
the of environmental infrastructure the
border in of the Administrator's efforts to In the
negotiation'and of the North American Free Trade
'(NAFTA). The the for this to the
The has four on
which the has This is the fourth in that
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SUMMARY
In a to the Trade
(NAFTA), the United and created a to
the The
a of of and an
of call has, in two
for the of funds to the to
it is funds are
at a 2:1 and 3:1 the NAFTA will
S6 and $9 to
the U.S. -
is an of historic
Is at to a
The to
not be
To this the full of the
by the NAFTA be To do so
to help
to will be on a sound
will the of the
NAFTA and to up the
is the of this
The - as its - the
of the to
the a and structure for the NAFTA
the the of a
in or more in of
These be as of
and be as the to be by the
NAFTA should as the for aE
future NAFTA
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Under the bilateral the for
Is binational
the Commission (BECC) the North
The agreement the BECC as an Is to
work with to .
projects. The BECC's role will be to the and
of and to them for to the
will a binationai of directors on
the will serve. BECC will consult an
of which nine will come The
of as well as and on
proposed will be
The be a four year
of from the and Mexico and an
of callable each. of the
will be to finance
with the balance available for The
purpose of the NADBank is to "as "certified"
by the BECC. The Is to a three from
It is the will as one of the U.S.
of the In for the of or
by the BECC, it Is the U.S. to the
will be in with the of the
Committee on and as
by of 14,1966, and that for
the be a of the National
This committee was to coordinate U.S. *
for
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The to the
in the be
by who .
the and should be to or control.1'
This Is to the of
BECC/NADBank to the of
The the BECC and the is to ,
an wMcfa
fee
are controlled by, for costs
revenues will both
?
is an It not the of a
in but the of new of
as
To this the the *
to be as as
i
1. The must a of and
the to legal are
to fee
would as the for a if the
is to be or as the if the
is to be the
to a to an or
to the The
to areas as
(SFCs). of SPCs are or
be with the
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A. to the of an
B. to user fees to the
for
C. to are to be
of
are autonomous They are
function Their financial is to the use of
a highly set of They do not any to tax, nor
the of any to
2. BECC to the
of to be to
to for are
absolutely critical not be in
any environmental infrastructure
still water
of both - no matter how
be to which are to
the of
to the quality of the and to the in the
basic quality of life which the all be
of the would be for a new to provide
unnecessary, or at the
user not be resources would
be and the by the for the
be
3. The BECC for three
A. to and to the
A of
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facilities in Mexico are not functional; primarily due to the lack
of trained.personnel. (
B. to train financial staff in the areas of collections,
payments, budgeting, rate setting, capital planning and debt
financing. This is critical. These skills in the
border region, but are in short supply in the field of
environmental infrastructure.
C to train administrative staff in the areas of customer services,
personnel,, training, and general management.
If users are required to pay then they must be furnished with
reliable and quality service. And, for an SPC to be creditworthy, it must have
sound management. In the long term, Mexico must look to the establishment
of university-level training programs for and administrators of
SPCs in the water, wastewater and solid waste fields. In the short term, it can
look to the U.S. Environmental Protection Agency (EPA) for technical
assistance. The pilot Environmental Finance Center at the University of New
Mexico can as just a resource. In addition,
arrangements, with American pubEc utility districts could also be organized, as
could contracts for management services with private companies. These
programs must be developed to assure that the new autonomous SPCs will have
of qualified management candidates.
4. The BECC must assemble a binational team of experts and charge them
with the of identifying the and administrative which
must be to assure the integrity of the new financial which
the SPCs wiE employ. Good management is essential to good credit, but. is not
the only requirement In a market-based financing system, a legal nexus must
between the paid by a system's and the payments to the
system's creditors. Pledges of system funds must be constitutionally
enforceable. Lenders must have an absolute legal right to any fees pledged to
them. Furthermore, there must be legal mechanisms in place to assure that
funds, once collected by a system, duly make way to the
creditors. -In this regard, efforts must be made to identify what statutes,
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to the U.S. Act of 1 be or to
will be are
the the criminal. or other
must be to the by
traditional trustees, agents.
A be as to
In for as
can be by, *or
to the SPCs.
In the Mexican must be
both the of the of quality of the to be
by the Its for
(SEDJE5OL), has the totassure the of
It on an to
control pricing. But to the extent are not the BECC
*
put its at the of the Mexican in
\
policy
5.' The the of a of
at the of the
to
waste are to be be of The
nature of the most be fully and the of fully
be of the be
to the fact that the to the of
to a in the of
must the for and
be on a the
the to for or
new customer which trie SPCs must and
6. the BECC must retain an 'financial to it,
at the to a to fully the
On a the can
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the board on which In the NADBank"s the lowest
for the of all
projects.
7. The EPA Administrator should the Environmental Financial
(EFAB), or to the
of the BECC in to
A. that the BECCs are
B. that the NADBank will remain solvent;
C. that a is to all
the ands
D. the U.S. will not be to any
for the in the
bilateral
The of a sound secure financial for the funding of
the a In
to the of the and and the
enactment of and
the of
It will be to
a to high of that
are to of viable
In to marshal the to task, the
the of a
one or or not be
on an nor the be to
nor the and be in
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a vacuum. The the are
be to can
serve as models for others. Once have been identified, the
of the be to a program
with as so the
by the NAFTA will an
and so the in the few can be
to the many in the
The of the and the NADBank is to
all viable environmental projects the U.S. -
a
financial structure strong this will never
be the of the be the
of in to the
of the and will be
to ail of the of the
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