KRS 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 el iminate 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 ad visability 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 feasibilit y 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 re spective 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 b riefs 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 distr ict 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 w ater 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 enablin g 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 a dditional 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 a nd 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 t o 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 P ublic 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 cau se

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 jurisdict ion 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.