74.361 Merger of water districts -- Hearing -- Orders. (1) The General Assembly of the Commonwealth of Kentucky determines as a legislative finding of fact that reduction of the number of operating water districts in the Commonwealth will be in the public interest, in that mergers of such districts will tend to eliminate wasteful duplication of costs and efforts, result in a sounder and more businesslike degree of management, and ultimately result in greater economies, less cost, and a higher degree of service to the general public; and that the public policy favors the merger of water districts wherever feasible. (2) The Public Service Commission of Kentucky is authorized and empowered to initiate, carry out, and complete such investigations, inquiries, and studies as may be reasonably necessary to determine the advisability as to the merger of water districts. Prior to ordering a hearing with reference to the merger of any water district into one (1) or more additional water districts, the Public Service Commission shall cause to be prepared in writing a feasibility report and study regarding the proposed merger, containing such studies, investigations, facts, historical data, and projections as in the circumstances may be required in order to enable the commission to formulate a proper decision regarding such merger. (3) Based upon the written report and study required to be made incident to any water district merger, the Public Service Commission may propose by order that a merger of water districts be accomplished, and, upon the issuance of such order, shall give actual notice to all water districts proposed to be merged. Said order shall provide for a formal public hearing to be held before the Public Service Commission on the subject of such proposed merger. Actual notice of such merger hearing shall also be furnished to the county judges/executive of each county containing a water district proposed to be merged, and each water commissioner of a water district proposed to be merged, and notice of such public hearing shall be afforded to the public served by the respective water districts sought to be merged, by newspaper notice in accordance with the provisions of KRS Chapter 424. (4) A formal hearing before the Public Service Commission shall be held with reference to such merger proposal, and, upon such occasion, all water districts which are sought to be merged into a single entity shall be afforded the right to appear, to present evidence, to examine all exhibits and testimony, to cross-examine all witnesses, and to submit such memoranda, written evidence, and briefs as may be desired. Such public hearing may be adjourned from time to time by the Public Service Commission, and notice of such adjournments may, but need not, be afforded as with reference to the initial public hearing. At the conclusion of such proceedings, the Public Service Commission shall enter its order, either merging the water districts which are the subject of the merger proceedings into a single water district, or abandoning the merger proposal. (5) Outstanding obligations of any water district merged in accordance with the provisions of this section which are secured by the right to levy an assessment as provided by KRS 74.130 to 74.230, inclusive, or secured by a pledge of the income and revenues of the systems operated by any such merged water district, shall continue to be retired from such moneys and funds as shall be collected from the users of facilities operated by such merged water districts in the original water district area in accordance with the terms and provisions of the enabling laws and the authorizing resolutions or indentures under which the outstanding obligations were issued, until all such obligations have been retired. (6) In any order ordering the merger of water districts, the Public Service Commission shall make such additional orders as may be required in connection with the schedule of rates, rentals and charges for services rendered to be levied by the water district which remains in existence following such merger, having due regard to contractual commitments made and entered into by the constituent merged water districts in connection with the issuance of obligations by such districts. (7) Upon the effective date of any merger of water districts, the water commissioners of the merged water districts shall continue to serve as water commissioners of the resulting district, regardless of their normal term expiration, until one (1) year after approval of the merger by the Public Service Commission. Thereafter, the board shall be composed as set forth in KRS 74.363. The appropriate county judge/executive or county judges/executive shall appoint and reappoint water commissioners to manage the business and affairs of the resultant water district, in the manner provided by KRS 74.363. (8) Any order of merger entered by the Public Service Commission in accordance with this section shall be subject to all of the provisions of KRS Chapter 278, with reference to petitions for rehearing, and appeal. (9) Using the authority of this section the Public Service Commission can also cause mergers of water associations into water associations or mergers of water associations into water districts. (10) Nothing contained herein shall be construed to prohibit or limit in any respect the acquisition by water utilities subject to the jurisdiction of the commission or by municipally owned water utilities of the assets of water districts or water associations or the merger of water districts or water associations and water utilities subject to the jurisdiction of the commission or municipally owned water utilities. Effective: July 15, 2008 History: Amended 2008 Ky. Acts ch. 6, sec. 10, effective July 15, 2008. -- Amended 1978 Ky. Acts ch. 384, sec. 189, effective June 17, 1978. -- Created 1972 Ky. Acts ch. 310, sec. 4.