KRS 74.480: Exclusive water supply -- Basis for establishing rate, charges.

(1) When a commission has been created, the cities, water associations, water districts,

or federal agencies represented by the commission shall contract with the

commission for water and the contracts may provide that the sources of supply of

water of the commission shall be the exclusive water supply for the respective water

distribution systems. These cities, water associations, or water districts shall

establish charges and rates for water supplied by them to consumers sufficient at all

times:

(a) To pay the principal of and interest on all outstanding obligations of the cities,

water associations, or water districts which by their terms are payable in any

manner from the revenues of their respective waterworks distribution systems;

and

(b) To pay the cost o f operation and maintenance of their respective waterworks

distribution systems, including the payments to be made to the commission

pursuant to contracts for the purchase of water by those cities, water

associations, or water districts.

(2) The commission shall establish charges and rates for water supplied to those cities,

water associations, water districts, or federal agencies represented by the

commission sufficient at all times:

(a) To pay the principal of and interest on the revenue bonds issued by t he

commission under the provisions of KRS 74.420 to 74.520;

(b) To pay the cost of operation and maintenance of the sources of supply of

water; and

(c) To provide an adequate fund for renewals, replacements, and reserves.

Contracts entered into between the commission and the cities, water associations, or

water districts shall include covenants for the establishment of rates and charges as

provided in this section.