Request By:
Mr. Gayle D. Smith
Olive Hill
Kentucky 41164
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Thomas R. Emerson, Assistant Attorney General
This is in reply to your letter asking whether or not a city of the fourth class is obligated to have a utility commission and, if not, the proper procedure for abolishing such an ordinance. The City of Olive Hill, by ordinance, recently established a city utility commission.
You have not given us much information to work with and not knowing what types of utility services are involved and the statutes pursuant to which they exist, we will proceed to discuss several situations. You can then apply the appropriate law to your particular fact situation. You may also want to discuss the matter further with your city attorney.
KRS 96.530 provides in part that any city acquiring or constructing an electric light, heat and power plant pursuant to KRS 96.520 shall, by ordinance, appoint a city utility commission to operate, manage and control the plant.
Since it is very likely that you are referring to city water and sewer services or some combination of city utility services rather than a city electric plant, see KRS 96.190 authorizing the city legislative body of a fourth class city to privide the city with utility services. KRS 96.350 authorizes cities of the fourth class to acquire and operate waterworks and sewer systems jointly. Neither of these statutes make any provision for creating a utility commission to operate the facility.
The Court, however, in the case of
Keathley v. Town of Martin, Ky., 246 S.W.2d 152 (1951), held that even though there is no statutory provision for the creation of a governing board for utility services, a city has the legal authority to set up an administrative board in connection with their operation. See OAG 70-407, copy enclosed. We also direct your attention to OAG 74-83, copy enclosed, where we said that although the water system act makes no provision for the creation of a utility commission, a municipality acts in a proprietary capacity and has the right to set up an administrative board or commission to acquire and operate such facility. Note also that while the city may create a utility commission it may, at its discretion, abolish the commission it has created provided its existence was not made a part of the contract between the city and the utility bond holders. See
City of Elizabethtown v. Cralle, Ky., 317 S.W.2d 184 (1958) and OAG 74-83.
Thus, in conclusion, KRS 96.530 requires that a city acquiring or constructing an electric light, heat and power plant pursuant to KRS 96.520 appoint a city utility commission to operate, manage and control the plant. Statutory provisions dealing with the furnishing of other city utility services, including those authorizing the joint operation of city water and sewer systems, do not specifically authorize the establishment of a city utility commission to operate such facilities. However, the Court of Appeals (now the Supreme Court of Kentucky) has held that a city has the authority to not only create a commission to acquire and operate city utility services but to abolish such a commission provided its existence is not part of the contract between the city and the utility bond holders.