CHAPTER 3. OPERATION OF MUNICIPALLY OWNED UTILITIES GENERALLY
IC 8-1.5-3
Chapter 3. Operation of Municipally Owned Utilities Generally
IC 8-1.5-3-1
Application of chapter
Sec. 1. This chapter applies to all municipalities, exceptconsolidated cities, that own or operate utilities.
As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-3-2
"Board" defined
Sec. 2. As used in this chapter, "board" refers to the boardoperating a municipally owned utility as determined under section 3of this chapter.
As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-3-3
Control of utilities; control of storm water facilities in third classcities; ordinance; creation of utility service board
Sec. 3. (a) The legislative body of a municipality may, byordinance, provide for the control of any or all of its municipallyowned utilities by:
(1) the municipal works board;
(2) a board consisting of the members of the municipallegislative body;
(3) a utility service board established under subsection (f) orestablished before January 1, 1983, under IC 8-1-2-100(repealed); or
(4) the board of directors of a department of waterworksestablished under IC 8-1.5-4.
The legislative body of a third class city also may adopt an ordinanceunder this subsection to provide for the control of any or all of itsstorm water facilities by a board described in subdivisions (1)through (4). An ordinance granting control of any or all of a thirdclass city's storm water facilities to a board described in thissubsection may be separate from or combined with an ordinancegranting control of the third class city's municipally owned utilitiesto a board described in this subsection.
(b) If, at the time an ordinance is adopted under subsection (a) togrant control of any or all of a third class city's storm water facilitiesto a board described in subsection (a) the third class city has adepartment of storm water management under IC 8-1.5-5, theordinance must specify a procedure for the transition of control ofthe affected storm water facilities from the board of directors of thedepartment of storm water management to the board described insubsection (a).
(c) The registered voters of a municipality may file a petitionaddressed to the legislative body requesting that the question of thecreation of a utility service board be submitted to a referendum. Thepetition must be signed by at least the number of the registered voters
of the municipality required under IC 3-8-6-3 to place a candidate onthe ballot.
(d) Within thirty (30) days after a petition is filed, the municipalclerk shall certify to the legislative body and to the county electionboard that a sufficient petition has been filed.
(e) Following certification, the legislative body shall submit thequestion of the creation of a utility service board to a referendum atthe next election. The question shall be submitted to the registeredvoters of the municipality by placement on the ballot in the formprescribed by IC 3-10-9-4 and must state:
"Shall the legislative body of the municipality of _____________adopt an ordinance providing for the appointment of a utility serviceboard to operate ____________ (Insert name of utility here)?".
(f) If a majority of the voters voting on the question vote for thecreation of a utility service board, the legislative body shall, byordinance, establish a utility service board consisting of not less thanthree (3) nor more than seven (7) members. Not more than two-thirds(2/3) of the members may be of the same political party. Allmembers must be residents of the area served by the board. Theordinance must provide for:
(1) a majority of the members to be appointed by the executiveand a minority of the members to be appointed by the legislativebody;
(2) the terms of the members, which may not exceed four (4)years, with initial terms prescribed so that the members' termswill be staggered;
(3) the salaries, if any, to be paid to the members; and
(4) the selection by the board of a chairman, who shall not beconsidered the head of a department for purposes ofIC 36-4-9-2.
(g) The registered voters of the municipality may also file apetition requesting that the question of the abolition of the utilityservice board be submitted to a referendum. The procedure for filingof the petition and the referendum is the same as that prescribed bysubsections (c) through (e).
As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.16-1983,SEC.6; P.L.3-1987, SEC.500; P.L.12-1995, SEC.100; P.L.282-2003,SEC.1.
IC 8-1.5-3-4
Board; powers and duties
Sec. 4. (a) The board has general supervisory powers over theutilities under its control, with responsibility for the detailedsupervision of each utility to be vested in its superintendent, who isresponsible to the board for the business and technical operation ofthe utility. The board shall:
(1) fix the number and compensation of employees;
(2) adopt rules governing the appointment of employeesincluding making proper classifications and rules to:
(A) determine the eligibility of applicants; (B) determine by competitive examination the relativefitness of applicants for positions;
(C) establish eligible lists arranged according to the ratingssecured;
(D) provide for the appointment of those having the highestratings; and
(E) provide for the promotion of employees;
(3) subject to IC 36-4-9-2, appoint a superintendent or managerof each utility under its control who is responsible to the boardfor the business and technical operation of the utility; the boardshall make the appointment on the basis of fitness to managethe particular utility to which he is to be assigned, taking intoaccount his executive ability and his knowledge of the utilityindustry;
(4) subject to IC 36-4-9-12, hire attorneys when required for theoperation of the utility;
(5) hire professional or expert personnel when required for theoperation of the utility;
(6) submit a budget of its financial needs for the next year in thedetail required by the municipal legislative body;
(7) recommend to the legislative body reasonable and just ratesand charges for services to the patrons of each utility;
(8) appropriate, lease, rent, purchase, and hold all real andpersonal property of the utility;
(9) enter upon lands for the purpose of surveying or examiningthe land to determine the location of any plant orappurtenances;
(10) award contracts for:
(A) the purchase of capital equipment;
(B) the construction of capital improvements; or
(C) other property or purposes that are necessary for the fulland efficient construction, management, and operation ofeach utility;
(11) adopt rules for the safe, economical, and efficientmanagement and protection of each utility;
(12) deposit at least weekly with the municipal fiscal officer allmoney collected from each utility to be kept in a separate fundsubject to the order of the board; and
(13) make monthly reports to the fiscal officer of the receiptsand disbursements of money belonging to each utility and anannual report of the condition of the utility.
(b) The board may purchase by contract electricity, water, gas,power, or any other commodity or service for the purpose offurnishing the commodity or service to the patrons of the municipallyowned utility or to the municipality itself.
(c) If the board wants to purchase the commodity or service froma public utility and the parties cannot agree on a rate or charge to bepaid for it, either party may apply to the commission or otherappropriate state or federal regulatory agency to establish a fair andreasonable rate or charge to be paid for the commodity or service. (d) The board may discontinue water service by a waterworks to:
(1) a water consumer; or
(2) any property;
upon failure by the water consumer or the property owner to paycharges legally due for sewer or sewage disposal plant service.However, the water service may not be discontinued for nonpaymentof sewer or sewage disposal plant service charges until the chargeshave been due and unpaid for at least thirty (30) days.
(e) Before water service is discontinued under subsection (d), theboard must give written notice to the water consumer or propertyowner of its intention to discontinue water service if the unpaidsewer or sewage disposal plant service charges are not paid before adate specified in the notice. The notice must be mailed not less thanten (10) days before water service is to be discontinued andaddressed to the water consumer or the property owner at his lastknown address.
As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-3-4.5
Application of section; bid, proposal, or quotation submitted bytrust
Sec. 4.5. (a) This section applies to the award of a contract underthis chapter by acceptance of bids, proposals, or quotations.
(b) A bid, proposal, or quotation submitted by a trust (as definedin IC 30-4-1-1(a)) must identify each:
(1) beneficiary of the trust; and
(2) settlor empowered to revoke or modify the trust.
As added by P.L.336-1989(ss), SEC.19.
IC 8-1.5-3-5
Superintendent; powers and duties; compensation; bond; removal
Sec. 5. (a) The superintendent of each utility shall:
(1) appoint, supervise, and dismiss all employees of the utility;
(2) employ unskilled labor when needed, without competitiveexamination;
(3) investigate all claims against the utility;
(4) oversee the operation of the utility and any constructionwork, repairs, or alterations to the system; and
(5) advise the board in all matters that will bring about anefficient and economical operation and maintenance of theutility.
(b) The superintendent is entitled to the compensation for hisservices that is determined by resolution of the board.
(c) The superintendent shall give bond in a sum not less thandouble the estimated amount of money that may be in his hands atany time. The bond shall be conditioned upon the faithful dischargeof his duties and the payment to the proper person of all money in hishands. The bond is subject to the approval of the executive of themunicipality.
(d) The superintendent may be removed by the board for cause at
any time after notice and a hearing.
As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-3-6
Load building appliances; purchase; sale and advertisement
Sec. 6. (a) The board may purchase, sell, and advertise, for thepurpose of sale, load building appliances.
(b) Load building appliances shall be designed to be used in:
(1) the consumption of the products; or
(2) the use of the services;
that the utility furnishes or is equipped to furnish to its customers.
As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-3-7
Retirement account
Sec. 7. The board may set up a retirement account for the benefitof the employees and past employees of each utility. The board mayprovide for the method, manner, and amount of contributions by theutility out of its earnings, reserves, or earned surplus, and byemployees if required by the plan, and may create an account for theutilities and allocate to the account contributions sufficient toestablish the plan on a sound actuarial basis, including contributionsfor past services of employees. However, the plan may not requirecontributions from an employee to exceed six percent (6%) of hiswage or salary.
As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-3-8
Rates and charges
Sec. 8. (a) A municipality owning a utility under this chapter shallfurnish reasonably adequate services and facilities.
(b) The rates and charges made by a municipality for a servicerendered or to be rendered, either directly or in connection therewith,must be nondiscriminatory, reasonable, and just.
(c) "Reasonable and just rates and charges for services" meansrates and charges that produce sufficient revenue to:
(1) pay all the legal and other necessary expenses incident to theoperation of the utility, including:
(A) maintenance costs;
(B) operating charges;
(C) upkeep;
(D) repairs;
(E) depreciation;
(F) interest charges on bonds or other obligations, includingleases; and
(G) costs associated with the acquisition of utility propertyunder IC 8-1.5-2;
(2) provide a sinking fund for the liquidation of bonds or otherobligations, including leases;
(3) provide a debt service reserve for bonds or other obligations,
including leases, in an amount established by the municipality,not to exceed the maximum annual debt service on the bonds orobligations or the maximum annual lease rentals;
(4) provide adequate money for working capital;
(5) provide adequate money for making extensions andreplacements to the extent not provided for throughdepreciation in subdivision (1); and
(6) provide money for the payment of any taxes that may beassessed against the utility.
(d) It is the intent of this section that the rates and chargesproduce an income sufficient to maintain the utility property in asound physical and financial condition to render adequate andefficient service. Rates and charges too low to meet theserequirements are unlawful.
(e) The board may recommend to the municipal legislative bodyrates and charges sufficient to include a reasonable return on theutility plant of the municipality.
(f) Rates and charges established under this section are subject tothe approval of:
(1) the municipal legislative body by ordinance; and
(2) the commission, in accordance with the procedures set forthin IC 8-1-2.
The commission shall approve rates and charges that are sufficient,in addition to the cash revenue requirements set forth in subsection(c), to include a reasonable return on the utility plant of themunicipality if the legislative body so elects.
(g) Except for a municipally owned utility taxed underIC 6-1.1-8-3, the commission shall approve rates and chargessufficient to compensate the municipality for taxes that would be duethe municipality on the utility property were it privately owned.These rates and charges in lieu of taxes may be transferred to themunicipal general fund, if the legislative body so elects.
(h) The commission shall grant a request that an increase in ratesand charges not be effective until after the occurrence of a futureevent if the legislative body so requests.
(i) A municipality that acquires and operates a utility underIC 8-1.5-2 by exercising the power of eminent domain may notimpose a special rate, charge, surcharge, or other fee, other than ratesand charges approved under this section or otherwise authorized bylaw, on the customers of the utility in order to pay for the costsassociated with acquiring the utility through the exercise of thepower of eminent domain.
As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.105-1983,SEC.2; P.L.35-1990, SEC.28; P.L.172-2009, SEC.5.
IC 8-1.5-3-8.1
Hearings; adoption of rates and charges
Sec. 8.1. (a) This section applies to all municipally owned waterutilities that have been taken out of the jurisdiction of thecommission for the approval of rates and charges. (b) After the introduction of the ordinance establishing the ratesand charges under section 8 of this chapter, but before the ordinanceis finally adopted, the municipal legislative body shall hold a publichearing at which users of the waterworks, owners of property servedor to be served by the waterworks, and other interested persons maybe heard concerning the proposed rates and charges. Notice of thehearing, setting forth the proposed schedule of rates and charges,shall be:
(1) published in accordance with IC 5-3-1 (IC 5-3-1-1 throughIC 5-3-1-9);
(2) mailed to owners of vacant or unimproved property if theordinance includes a fee for water service to vacant orunimproved property; and
(3) mailed to users of the waterworks located outside themunicipality's corporate boundaries.
The notice may be mailed in any form so long as the notice ofhearing is conspicuous. The hearing may be adjourned from time totime.
(c) After the hearing, the municipal legislative body shall adoptthe ordinance establishing the rates and charges, either as originallyintroduced or as modified. A copy of the schedule of rates andcharges adopted shall be kept on file and available for publicinspection in the offices of the board and the municipal clerk.
(d) The rates and charges established for any class of users orproperty shall be extended to cover any additional property that issubsequently served and falls within the same class, without anyhearing or notice.
(e) The municipal legislative body may change or readjust therates and charges in the same manner as they were established.
(f) Rates and charges collected under this chapter are consideredrevenues of the waterworks.
As added by P.L.77-1991, SEC.1.
IC 8-1.5-3-8.2
Objections to rates and charges; bonds; hearings
Sec. 8.2. (a) This section applies to all municipally owned waterutilities that have been taken out of the jurisdiction of thecommission for the approval of rates and charges.
(b) Owners of property connected or to be connected to andserved by the waterworks authorized under this chapter may file awritten petition objecting to the rates and charges of the waterworksso long as:
(1) the petition contains the names and addresses of thepetitioners;
(2) the petitioners attended the public hearing provided undersection 8.1 of this chapter;
(3) the written petition is filed with the municipal legislativebody within five (5) days after the ordinance establishing therates and charges is adopted under section 8.1 of this chapter;and (4) the written petition states specifically the ground or groundsof objection.
(c) Unless the objecting petition is abandoned, the municipal clerkshall file in the office of the clerk of the circuit or superior court ofthe county a copy of the rate ordinance or ordinances together withthe petition. The court shall then set the matter for hearing at theearliest date possible, which must be within twenty (20) days afterthe filing of the petition with the court. The court shall send noticeof the hearing by certified mail to the municipality and to the firstsigner of the petition at the address shown on the petition. Allinterested parties shall appear in the court without further notice, andthe municipality may not conduct any further proceedings concerningthe rates and charges until the matters presented by the petition havebeen heard and determined by the court.
(d) At the discretion and upon direction of the court, thepetitioners shall file with the petition a bond in the sum and with thesecurity fixed by the court. The bond must be conditioned on thepetitioners' payment of all or part of the costs of the hearing and anydamages awarded to the municipality if the petition is denied, asordered by the court.
(e) Upon the date fixed in the notice, the court shall, without ajury, hear the evidence produced. The court may confirm thedecision of the municipal legislative body or sustain the objectingpetition. The order of the court is final and conclusive upon allparties to the proceeding and parties who might have appeared at thehearing, subject only to the right of direct appeal. All questions thatwere presented or might have been presented are considered to havebeen adjudicated by the order of the court, and no collateral attackupon the decision of the municipal legislative body or order of thecourt is permitted.
(f) If the court sustains the petition, or if the petition is sustainedon appeal, the municipal legislative body shall set the rates andcharges in accordance with the decision of the court.
As added by P.L.77-1991, SEC.2.
IC 8-1.5-3-9
Removal of utility from jurisdiction of commission for approval ofrates and charges; procedure
Sec. 9. (a) This subsection applies to a municipally owned utilitythat before June 1, 1987, was taken out of the jurisdiction of thecommission for the approval of rates and charges. A utility to whichthis subsection applies is removed from the jurisdiction of thecommission for approval of the issuance of stocks, bonds, notes, orother evidence of indebtedness.
(b) Except as provided in subsection (a), a municipal legislativebody that wants to be taken out of the jurisdiction of the commissionfor approval of rates and charges and of the issuance of stocks,bonds, notes, or other evidence of indebtedness may submit thefollowing public question to the registered voters of the municipalityat the next election in the form prescribed by IC 3-10-9-4: "Shall the municipally owned utility be taken out of thejurisdiction of the utility regulatory commission for approval ofrates and charges and of the issuance of stocks, bonds, notes, orother evidence of indebtedness?".
(c) A municipal legislative body shall certify the public questionto the county election board of the county that contains the greatestpercentage of population of the municipality under IC 3-10-9-3 andsubmit the question under subsection (b) if it receives a petition that:
(1) is signed by at least the number of the registered voters ofthe municipality required under IC 3-8-6-3 to place a candidateon the ballot; and
(2) requests that the municipally owned utility be removed fromthe jurisdiction of the commission for approval of rates andcharges and of the issuance of stocks, bonds, notes, or otherevidence of indebtedness.
(d) If a majority of those voting favor taking the municipallyowned utility out of the jurisdiction of the commission, the utility:
(1) is removed from the jurisdiction of the commission forapproval of rates and charges and of the issuance of stocks,bonds, notes, or other evidence of indebtedness; and
(2) shall mail written notice of the withdrawal from commissionjurisdiction to the commission within thirty (30) days after theutility's withdrawal.
As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.124-1987,SEC.1; P.L.23-1988, SEC.62; P.L.10-1988, SEC.217; P.L.12-1995,SEC.101.
IC 8-1.5-3-9.1
Removal of utility from jurisdiction of commission for approval ofrates, charges, and evidences of indebtedness; alternativeprocedure
Sec. 9.1. (a) This section applies to the following:
(1) Water utilities that are owned or operated by second classcities.
(2) Third class cities.
(3) Towns.
(b) In addition to section 9 of this chapter, a municipally ownedutility to which this section applies may be removed from thejurisdiction of the commission for the approval of rates and chargesand of the issuance of stocks, bonds, notes, or other evidence ofindebtedness, if the municipal legislative body adopts an ordinanceremoving the utility from commission jurisdiction. The municipallegislative body shall, at least thirty (30) days before the final vote onthe ordinance, mail written notice of the meeting to all ratepayers ofthe utility and to the commission. For a second class city themunicipal legislative body must hold two (2) public meetings beforethe final vote on an ordinance removing the utility from commissionjurisdiction may be adopted. An explanation of the removal processmust be provided at each public meeting under this section. Eachpublic meeting must be held in a different location. (c) The ordinance described in subsection (b) takes effect sixty(60) days after adoption by the municipal legislative body.
(d) The question of removal from commission jurisdiction shallbe submitted to the registered voters of the municipality if, within thesixty (60) day period described in subsection (c), the legislative bodyreceives a petition:
(1) that is signed by at least the number of the registered votersof the municipality required under IC 3-8-6-3 to place acandidate on the ballot; and
(2) that requests the legislative body to submit the question ofremoval from commission jurisdiction to the registered votersof the municipality at the next election.
The municipal legislative body shall certify the public question insubsection (e) to the county election board of the county thatcontains the greatest percentage of population of the municipalityunder IC 3-10-9-3.
(e) If the legislative body receives a petition described insubsection (d) in the proper form, the legislative body shall submitthe following public question to the registered voters of themunicipality at the next election in the form prescribed byIC 3-10-9-4:
"Shall the municipally owned utility be taken out of thejurisdiction of the Indiana utility regulatory commission for theapproval of rates and charges and of the issuance of stocks,bonds, notes, or other evidence of indebtedness?".
The legislative body shall mail written notice of the referendum tothe commission at least ten (10) days before the date of the election.
(f) If a majority of those voting on the question described insubsection (e) favor taking the municipally owned utility out of thejurisdiction of the commission, the utility is removed from thejurisdiction of the commission for approval of rates and charges andof the issuance of stocks, bonds, notes, or other evidences ofindebtedness.
(g) If the legislative body receives a petition in proper form undersubsection (d), the ordinance does not take effect until after removalis approved by a majority of those voting. If a majority of thosevoting vote against removal, the utility remains under the jurisdictionof the commission and the ordinance does not take effect.
(h) In addition to the notice required by subsection (b), if themunicipal legislative body adopts the ordinance, described insubsection (b), the municipal legislative body shall mail writtennotice of the withdrawal from commission jurisdiction to thecommission within thirty (30) days after the ordinance becomeseffective.
(i) Notwithstanding this section or section 9 of this chapter, thecommission may require a municipally owned utility that generateselectric power to provide information to the permanent forecastinggroup under IC 8-1-8.5-3.5.
(j) This section does not affect the obligations of a municipallyowned utility under IC 8-1-2.3, IC 8-1-8.5, IC 8-1-22.5, or
IC 8-1.5-3-14.
As added by P.L.82-1988, SEC.6. Amended by P.L.77-1991, SEC.3;P.L.12-1995, SEC.102.
IC 8-1.5-3-9.5
Return of utility to commission jurisdiction following removal
Sec. 9.5. (a) This section applies to municipally owned utilitiesthat are withdrawn from commission jurisdiction under section 9 ofthis chapter, including a municipally owned utility described insection 9(a) of this chapter.
(b) A municipal legislative body that wants to return amunicipally owned utility to the jurisdiction of the commission forapproval of rates and charges and of the issuance of stocks, bonds,notes, or other evidence of indebtedness may submit the followingpublic question to the registered voters of the municipality at the nextelection in the form prescribed by IC 3-10-9-4:
"Shall the municipally owned utility be returned to thejurisdiction of the utility regulatory commission for approval ofrates and charges and of the issuance of stocks, bonds, notes, orother evidence of indebtedness?".
(c) A municipal legislative body shall certify the public questionto the county election board of the county that contains the greatestpercentage of population of the municipality under IC 3-10-9-3. Thecounty election board shall submit the question under subsection (b)if it receives a petition that:
(1) is signed by at least the number of the registered voters ofthe municipality required under IC 3-8-6-3 to place a candidateon the ballot; and
(2) requests that the municipally owned utility be returned tothe jurisdiction of the commission for approval of rates andcharges and of the issuance of stocks, bonds, notes, or otherevidence of indebtedness.
(d) If a majority of those voting favor returning the municipallyowned utility to the jurisdiction of the commission, the utility isreturned to the jurisdiction of the commission for approval of ratesand charges and of the issuance of stocks, bonds, notes, or otherevidence of indebtedness. If a majority of those voting disapprove ofreturning the municipally owned utility to the jurisdiction of thecommission, an election may not be conducted on the public questionof returning to the jurisdiction of the commission for four (4) yearsfrom the date of the last election on that public question.
(e) The public question of returning to the jurisdiction of thecommission may not be submitted to the registered voters of themunicipality at an election conducted within four (4) years after thedate the municipally owned utility was last withdrawn fromcommission jurisdiction.
(f) If a municipally owned utility is returned to the jurisdiction ofthe commission under this section, the municipal legislative bodyshall mail written notice to the commission.
As added by P.L.82-1988, SEC.7. Amended by P.L.12-1995,
SEC.103.
IC 8-1.5-3-9.6
Return of utility to commission jurisdiction following removalunder alternative procedure
Sec. 9.6. (a) This section applies to municipally owned utilitiesthat are withdrawn from commission jurisdiction under section 9.1of this chapter.
(b) The municipal legislative body may adopt an ordinancereturning the municipally owned utility to the jurisdiction of thecommission for the approval of rates and charges and of the issuanceof stocks, bonds, notes, or other evidence of indebtedness if itreceives a petition:
(1) that is signed by at least the number of the registered votersof the municipality required under IC 3-8-6-3 to place acandidate on the ballot; and
(2) that requests the legislative body to adopt an ordinancereturning the municipally owned utility to the jurisdiction of thecommission.
If the municipal legislative body fails to adopt an ordinance underthis subsection within ninety (90) days after receipt of the petition,a petition requesting the adoption of an ordinance to return tocommission jurisdiction may not be submitted for four (4) years fromthe date the last petition was submitted under this subsection.
(c) If the municipal legislative body fails to adopt the ordinancedescribed in subsection (b) within ninety (90) days after receipt ofthe petition, the public question of the return to commissionjurisdiction shall be submitted to the registered voters of themunicipality if the legislative body receives a second petition:
(1) that is signed by at least the number of the registered votersof the municipality required under IC 3-8-6-3 to place acandidate on the ballot;
(2) that requests the legislative body to submit the question ofthe return to commission jurisdiction to the registered voters ofthe municipality at the next election; and
(3) that is submitted to the legislative body after the expirationof the ninety (90) day period described in this subsection.
The municipal legislative body shall certify the public questiondescribed in subsection (d) to the county election board of the countythat contains the greatest percentage of population of themunicipality under IC 3-10-9-3.
(d) If the legislative body receives a petition described insubsection (c) in the proper form, the legislative body shall submitthe following public question to the registered voters of themunicipality at the next election in the form prescribed byIC 3-10-9-4:
"Shall the municipally owned utility be returned to thejurisdiction of the utility regulatory commission for theapproval of rates and charges and of the issuance of stocks,bonds, notes, or other evidence of indebtedness?".The legislative body shall mail written notice of the referendum tothe commission at least ten (10) days before the date of the election.
(e) If a majority of those voting on the question described insubsection (d) favor returning the municipally owned utility to thejurisdiction of the commission, the utility is returned to thejurisdiction of the commission for approval of rates and charges andof the issuance of stocks, bonds, notes, or other evidence ofindebtedness. If a majority of those voting disapprove of returningthe municipally owned utility to the jurisdiction of the commission,an election may not be conducted on the public question of returningto the jurisdiction of the commission for four (4) years from the dateof the last election on that public question.
(f) The public question of returning to the jurisdiction of thecommission may not be submitted to the registered voters of themunicipality at an election conducted within four (4) years after thedate the municipally owned utility was last withdrawn fromcommission jurisdiction. In addition, a petition requesting theadoption of an ordinance under subsection (b) may not be submittedwithin four (4) years after the date the municipally owned utility waslast withdrawn from commission jurisdiction.
(g) If a municipally owned utility is returned to commissionjurisdiction under this section, the municipal legislative body shallmail written notice to the commission.
As added by P.L.82-1988, SEC.8. Amended by P.L.12-1995,SEC.104.
IC 8-1.5-3-10
Rates and charges; electric service outside corporate boundaries
Sec. 10. Whenever a municipality operates an electric utility thatprovides service outside the corporate boundaries of themunicipality, the charges for service outside the corporateboundaries may not differ from the charges for service inside thecorporate boundaries unless the utility clearly demonstratessignificant cost factors that make different chargesnondiscriminatory, reasonable, and just.
As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-3-11
Funds; management
Sec. 11. (a) The money belonging to each municipally ownedutility shall be kept by the municipal fiscal officer as separate fundsas required by any bond ordinance or accounting proceduresestablished by the commission or the state board of accounts. Themunicipal legislative body, with the approval of the board, maytransfer surplus earnings of the utility to the general fund. The moneymay not, however, be transferred unless the terms and conditions ofany bond ordinance, resolution, indenture, contract under IC 8-1-2.2,or similar instrument binding upon the utility are complied with.
(b) A cash reserve fund shall be created by ordinance and carriedon the records of the utility or utilities by providing for monthly
contributions or transfers to the cash reserve fund of surplus earningsof the utility or utilities.
(c) "Surplus earnings" are those cash earnings remaining afterprovision has been made to take care of current obligations,including:
(1) operating expense;
(2) depreciation or replacement fund;
(3) bond and interest sinking fund;
(4) retirement fund; or
(5) any other priority fund requirements fixed by law.
(d) After creation of the cash reserve fund, the legislative bodymay include in the municipal general fund budget, as revenue in lieuof taxes, an amount equal to the actual balance in the cash reservefund as of June 30 of the current year. However, the available cashreserve fund balance may be transferred to the municipal generalfund only during the calendar year for which the budget was adopted,and transfers may not be made from any utility funds to the generalfund except from the cash reserve fund.
(e) If at any time after the final approval of the budget anemergency should arise for further appropriations from the generalfund, the legislative body may, by ordinance, transfer additionalmoney from the cash reserve fund to the general fund to provide forthe additional appropriations, the transfer to be limited to theaccretions to the cash reserve fund since the preceding June 30.
(f) A cash reserve fund, if authorized by ordinance, may be usedto make loans to another utility owned by the same municipality, forperiods not to exceed five (5) years, at any interest rate. Therepayment of the loan and interest shall be returned to the cashreserve fund.
As added by Acts 1982, P.L.74, SEC.1.
IC 8-1.5-3-12
Loan from utility to municipality; loan requirements; limitation onamount
Sec. 12. (a) A municipality may, by ordinance of its legislativebody, borrow money from a utility owned by the municipality for anyof the following purposes:
(1) Current purposes in anticipation of taxes levied and to becollected during the current or following year.
(2) Carrying out an eligible efficiency project (as defined inIC 36-9-41-1.5) within the municipality.
(b) The board may by resolution lend money to the municipalityif the utility has on hand:
(1) a surplus of cash exceeding by at least the amount loanedthe sum of all amounts required to pay the indebtedness of theutility falling due during the current calendar year and thefollowing year;
(2) the amount necessary to meet current expenses during theyear; and
(3) the amount necessary to pay for improvements contemplated
to be made during the current calendar year minus the estimatedreceipts during the calendar year.
(c) A loan made under subsection (a)(1) may not be made for asum in excess of fifty percent (50%) of the amount estimated to becollected from anticipated taxes.
(d) A loan under this section:
(1) must be evidenced by an obligation of the municipality;
(2) must be signed by the executive;
(3) is due:
(A) on or before thirty (30) days after the last day for thepayment of anticipated taxes, in the case of a loan madeunder subsection (a)(1); and
(B) on a date determined by the board (but not more than six(6) years after the date of the loan), in the case of a loanmade under subsection (a)(2); and
(4) may bear interest at any rate as determined by the board,payable at maturity.
As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.88-2009,SEC.2.
IC 8-1.5-3-13
Investments of surplus money; authorization of officers
Sec. 13. The municipal legislative body may, by ordinance,authorize officers charged by law with custodial care, expenditure,and investment of utility money to invest or reinvest surplus moneyof a utility in the manner prescribed by IC 5-13-9.
As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.19-1987,SEC.20.
IC 8-1.5-3-14
Annual report; exemption; examination of accounts
Sec. 14. (a) A municipally owned utility under the jurisdiction ofthe commission for approval of rates and charges and of the issuanceof stocks, bonds, notes, or other evidence of indebtedness shall filewith the commission an annual report of the operation of the plant onforms prescribed by the commission. The annual reports shall be keptin the office of the commission as a public record. A municipallyowned utility that has withdrawn from commission jurisdiction underIC 8-1-2-100 (before its repeal on January 1, 1983) or section 9 or9.1 of this chapter is not required to file the annual report required bythis section.
(b) The state board of accounts shall examine all accounts ofevery municipally owned utility at regular intervals. In theexamination, inquiry shall be made as to:
(1) the financial condition and resources of the utility;
(2) whether the laws of the state have been complied with; and
(3) the methods and accuracy of the accounts and reports of theutilities examined.
The examination shall be made without notice, and its cost shall bepaid out of the funds of the utility.As added by Acts 1982, P.L.74, SEC.1. Amended by P.L.68-1990,SEC.2.
IC 8-1.5-3-15
Utilities operated under IC 8-1-11.1; rights and powers
Sec. 15. A utility operated under IC 8-1-11.1 retains the rights andpowers conferred by IC 8-1-11.1-3.1, notwithstanding section 1 ofthis chapter.
As added by Acts 1982, P.L.74, SEC.1.