Request By:
Mr. Tom Thurston
City Manager
City of Corbin
Corbin, Kentucky 40701
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Walter C. Herdman, Assistant Deputy Attorney General
This is in answer to your letter of August 3 in which you request an opinion concerning the following:
"1. Can the Legislative Body require the City Utilities Commission to pay interest on deposits by customers for light and water services?
"2. Can the City Utilities Commission arbitrarily set the rates for connection and re-connecting fees or must they follow the procedure used in setting the utility rates (i.e. to petition the Board of Commissioners to set the rate).
"3. Can the Utility Commissioners extend sewer lines outside the incorporated limits of the City without action by the Legislative Body of the City?"
In response to your initial question we are enclosing a copy of OAG 77-353 in which we cited the case of
Commonwealth v. Kentucky Power and Light Co., 257 Ky. 66, 77 S.W.2d 395 (1934), as indicating that interest should be paid on deposits which should be refunded to the customer when he ceases to be a patron. See our reference to question four in said opinion.
In order to answer your second question it would be necessary to know under which statute the city utility commission has been created and the ordinance governing same. For example, if the utility commission was created pursuant to KRS 96.171 to 96.188, the commission itself governs the operation of the municipal utility which includes the power to fix rates. See KRS 96.175 and KRS 96.176. In this respect you should consult with your city attorney to determine the terms under which the utility commission was created and also the terms of the ordinance enacted pursuant to statutory authorization.
In response to your third question, we find no statutory authority authorizing the extension of sewers outside the corporate limits of the city. As a matter of fact, we have held that no such authority exists unless the extension is based on purely a health and sanitation ground with respect to the municipal residents, in which case such an extension would probably be valid even in absence of specific statutory authority. Concerning this subject, we are enclosing a copy of OAG 67-437 which is self-explanatory.
Again we suggest that you initially refer your legal questions to your city attorney since he is the legal advisor to the city.