Request By:
Mr. William H. Sartaine
Mayor, City of Olive Hill
Box 460
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 stating that Olive Hill, a city of the fourth class, owns the electric, gas, water and sewer systems in the city. The city council, upon the recommendation of the auditors, recently adopted an ordinance forming a utility commission, using KRS 96.530 as a guideline. You ask whether the incoming mayor and city council could abolish the commission.
In OAG 77-694, copy enclosed, a question was raised as to whether the utility commission of Olive Hill could be abolished. At that time we did not know the types of utility services involved and the statutes pursuant to which they exist. We pointed out that the statutory provisions dealing with the furnishing of many city utility services do not specifically authorize the establishment of a city utility commission to operate such facilities. However, the Court 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.
Your situation involves the creation of a utility commission which will apparently administer the operation of all of the city's utility services, using as a guideline the provisions of KRS 96.530. The city's legal authority to set up an administrative board or commission to operate the city utilities, even though there is no statutory provision authorizing such a practice, was established by the case of Keathley v. Town of Martin, Ky., 246 S.W.2d 152 (1951). We also see no problem in the city's use of KRS 96.530 as a guideline to follow in establishing a city utility commission.
The fact remains, however, that KRS 96.530 specifically applies to the operation of a municipal light, heat and power plant and there are no statutory provisions authorizing the establishment or the abolition of a utility commission operating a variety of municipal utility services. The city's creation of such a utility commission is not dependent upon KRS 96.530 or any other statute but, rather, upon judicial determination. The same is true in regard to the abolition of a city utility commission of the type with which you are concerned. A court decision, City of Elizabethtown v. Cralle, Ky., 317 S.W.2d 184 (1958), and not a statute, provides that a utility commission operating several municipal utilities can be abolished provided its existence was not made part of the contract between the city and the utility bond holders.
In considering further the city's right to abolish by ordinance that which was previously created by ordinance, we direct your attention to Timpano v. Hanna, 355 N.Y.S.2d 226, 234 (1974), affirmed in 356 N.Y.S.2d 242 (1974), where the Court said:
"The general rule, when not qualified or restricted by positive law, is that the power which creates an office may abolish it in its discretion, and this rule is applicable to municipal offices created by act of the municipality. Collins v. City of Schenectady, 256 App. Div. 389, 10 N.Y.S.2d 303. Thus, a municipal corporation may, unless restricted by its Charter or other Statute, abolish an office created by ordinance. "
See also Stetter v. Town Board of Town of Amherst, 362 N.Y.S.2d 97 (1974); Brenner v. City of Bayonne, 130 N.J.L. 334, 32 A.2d 834 (1943); Blinn v. Hassman, Okla., 18 P.2d 881 (1933); and McQuillin Mun. Corp. (3rd Ed.), Vol. 3, 12.118.
The Courts have also stated that a public office created by a municipal ordinance may also be abolished by ordinance provided that the city acts in good faith and by a duly enacted ordinance. See Michna v. City of Houston, Tex. Civ. App., 521 S.W.2d 331 (1975); Sevigny v. City of Biddeford, Maine, 344 A.2d 34 (1975); and Williams v. City of New Bedford, 303 Mass. 213, 215, 21 N.E.2d 265, 266 (1939). Thus, if the incoming council is going to abolish the city utility commission it must act in good faith. It would not, for example, be an act of good faith for the council to abolish the commission merely to remove the present commission members and then reestablish the commission and appoint new members.
In conclusion, the general rule is that a municipality may, unless restricted by statute, abolish by ordinance an office or commission created by ordinance. If the city does intend to abolish its utility commission it should act in good faith and it should be certain that the commission's existence was not made part of the contract between the city and the bond holders. Subject to the above-mentioned restrictions, the city could abolish its utility commission because neither the establishment nor the abolition of its utility commission, operating a variety of city utility services, is dependent upon or governed by any statutory provisions. The establishment and abolition of a utility commission of the type with which you are concerned depends upon judicial determination rather than statutory provisions.