KRS 65.8919: Commission to provide services to member entities and other parties on

wholesale contract basis -- Mandatory contract provisions -- Rates and charges

-- Contract to manage existing wastewater facility.

(1) The commission shall provide all services on a wholesale contract basis and shall

have no retail customers. The commission shall not be deemed a utility under KRS

278.010(3), but any contract between a commission and a utility that is regulated by

the Public Service Commission regarding provision of services that would result in

an increase in the rates paid by customers of that utility shall be subject to review

and approval by the Public Service Commission in accordance with KRS Chapter

278. Contracts entered into between the commission and its memb er entities or

other parties shall include covenants for the establishment of rates and charges as

provided in subsection (5) of this section.

(2) In addition to providing services to its member entities by contract, the commission

may contract with cities , city -owned utilities, urban -county governments,

consolidated local governments, sanitation districts, metropolitan sewer districts,

joint sewer agencies, water districts, and agencies of local, state, and federal

government that are not members of the commission. The commission may contract

to provide services to wastewater entities in neighboring states that are not members

of the commission under terms mutually agreed upon by the respective parties.

(3) The commission shall not enter into a service cont ract with any entity that is

obtaining the same wastewater collection, transportation, or treatment services by

agreement with another wastewater service provider that has incurred debt

obligations or any costs attributable to the agreement that are to be retired in whole

or in part from revenue generated from providing the service to the entity, unless the

wastewater service provider releases the entity from its wastewater service

agreement.

(4) All services provided by the commission to member entities or other parties shall be

set out in contracts that shall contain, at a minimum, the following elements:

(a) A comprehensive description of any type of services to be provided;

(b) A statement of term, with beginning and ending times, dates, and a specific

delineation of automatic term extensions of the contract, if any;

(c) A provision that the commission shall be the exclusive service provider for all

or a designated geographic portion of a member entity's wastewater collection

system;

(d) Statements that:

1. All service shall be metered at each point of service and that the

contractee shall be responsible for initial capital costs and construction

of metering stations subject to the commission's specifications;

2. The commission shall take ownership and pro vide security for all

metering stations for purposes of management;

3. The commission shall arrange for testing of all meters according to

manufacturer's recommended schedule;

4. Testing and metering station maintenance costs shall be shared equally

between the commission and the contractee;

5. Metering stations shall be accessible to both parties; and

6. Meters shall be read at least monthly or more often according to a

mutually agreed upon schedule;

(e) A statement setting out allowed minimum volumes, if any, and allowed

maximum volumes expressed in gallons per minute for each meter;

(f) Identification of collected wastewater sources and allowed quality of influent

to commission facilities at each meter;

(g) A statement of rates and charges for access to services, for allowed minimum

volumes, if any, expressed in dollars per thousand gallons, and for allowed

maximum volumes, expressed in dollars per thousand gallons;

(h) A statement that all rates or charg es are subject to adjustment based on

periodic cost-of-service analyses and an associated cost-allocation plan funded

equitably between the commission and contractees, and a statement that any

rates and charges adjustment that may occur in the interim betw een the times

of full cost-of-service analyses with cost-allocation plans, if any, are subject to

clauses citing time frames, volumes of influent, or other triggering elements

tied to designated indexing method and proper notice;

(i) A requirement that eit her party provide immediate notification to the other

party regarding changes in volume or the quality of influent, instances of

mechanical failure, or other critical circumstance affecting operations when

and as changes are known or can be reasonably anticipated;

(j) A statement regarding any modifications or restrictions in service by either the

commission or the contractee during emergencies;

(k) A statement delineating any special condition binding one (1) or both parties,

or citation of a particular ac tion that, if taken by either party or if either party

allows a third party to take, will constitute a breach of contract or invoke

specifically identified penalties;

(l) A statement requiring both parties to provide current contact information of

the resp ective parties' agents for both administrative matters and for

emergencies; and

(m) A statement that the commission and the governing body of the contractee

agree to meet at least annually to review any contract issues, assess service

delivery, and plan for future service needs.

(5) Any contract entered into by the commission to supply designated wastewater

services to either a member entity or other party shall provide that charges assessed

by the commission and payments made by the entity or party shall b e fair, just, and

reasonable and shall be sufficient to cover all costs associated with the service. The

commission's rates and charges may be modified to compensate for increased

operating costs, pursuant to covenants set forth in contract. Contracts for services

shall be fully binding on the parties, but shall not be construed to be a debt of the

commission member entities within the meaning of any statutory or constitutional

limitations.

(6) If a commission contracts for management of a wastewater facili ty owned by a

member entity or other party, the commission shall become a signatory on any

federal, state, or local wastewater-related permits issued to and held by that member

entity or other party.