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, except
consolidated 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 board
operating a municipally owned utility as determined under section 3
of 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 class
cities; ordinance; creation of utility service board
Sec. 3. (a) The legislative body of a municipality may, by
ordinance, provide for the control of any or all of its municipally
owned utilities by:
(1) the municipal works board;
(2) a board consisting of the members of the municipal
legislative body;
(3) a utility service board established under subsection (f) or
established before January 1, 1983, under IC 8-1-2-100
(repealed); or
(4) the board of directors of a department of waterworks
established under IC 8-1.5-4.
The legislative body of a third class city also may adopt an ordinance
under this subsection to provide for the control of any or all of its
storm water facilities by a board described in subdivisions (1)
through (4). An ordinance granting control of any or all of a third
class city's storm water facilities to a board described in this
subsection may be separate from or combined with an ordinance
granting control of the third class city's municipally owned utilities
to a board described in this subsection.
(b) If, at the time an ordinance is adopted under subsection (a) to
grant control of any or all of a third class city's storm water facilities
to a board described in subsection (a) the third class city has a
department of storm water management under IC 8-1.5-5, the
ordinance must specify a procedure for the transition of control of
the affected storm water facilities from the board of directors of the
department of storm water management to the board described in
subsection (a).
(c) The registered voters of a municipality may file a petition
addressed to the legislative body requesting that the question of the
creation of a utility service board be submitted to a referendum. The
petition 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 on
the ballot.
(d) Within thirty (30) days after a petition is filed, the municipal
clerk shall certify to the legislative body and to the county election
board that a sufficient petition has been filed.
(e) Following certification, the legislative body shall submit the
question of the creation of a utility service board to a referendum at
the next election. The question shall be submitted to the registered
voters of the municipality by placement on the ballot in the form
prescribed 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 service
board to operate ____________ (Insert name of utility here)?".
(f) If a majority of the voters voting on the question vote for the
creation of a utility service board, the legislative body shall, by
ordinance, establish a utility service board consisting of not less than
three (3) nor more than seven (7) members. Not more than two-thirds
(2/3) of the members may be of the same political party. All
members must be residents of the area served by the board. The
ordinance must provide for:
(1) a majority of the members to be appointed by the executive
and a minority of the members to be appointed by the legislative
body;
(2) the terms of the members, which may not exceed four (4)
years, with initial terms prescribed so that the members' terms
will 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 be
considered the head of a department for purposes of
IC 36-4-9-2.
(g) The registered voters of the municipality may also file a
petition requesting that the question of the abolition of the utility
service board be submitted to a referendum. The procedure for filing
of the petition and the referendum is the same as that prescribed by
subsections (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 the
utilities under its control, with responsibility for the detailed
supervision of each utility to be vested in its superintendent, who is
responsible to the board for the business and technical operation of
the utility. The board shall:
(1) fix the number and compensation of employees;
(2) adopt rules governing the appointment of employees
including making proper classifications and rules to:
(A) determine the eligibility of applicants;
(B) determine by competitive examination the relative
fitness of applicants for positions;
(C) establish eligible lists arranged according to the ratings
secured;
(D) provide for the appointment of those having the highest
ratings; and
(E) provide for the promotion of employees;
(3) subject to IC 36-4-9-2, appoint a superintendent or manager
of each utility under its control who is responsible to the board
for the business and technical operation of the utility; the board
shall make the appointment on the basis of fitness to manage
the particular utility to which he is to be assigned, taking into
account his executive ability and his knowledge of the utility
industry;
(4) subject to IC 36-4-9-12, hire attorneys when required for the
operation of the utility;
(5) hire professional or expert personnel when required for the
operation of the utility;
(6) submit a budget of its financial needs for the next year in the
detail required by the municipal legislative body;
(7) recommend to the legislative body reasonable and just rates
and charges for services to the patrons of each utility;
(8) appropriate, lease, rent, purchase, and hold all real and
personal property of the utility;
(9) enter upon lands for the purpose of surveying or examining
the land to determine the location of any plant or
appurtenances;
(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 full
and efficient construction, management, and operation of
each utility;
(11) adopt rules for the safe, economical, and efficient
management and protection of each utility;
(12) deposit at least weekly with the municipal fiscal officer all
money collected from each utility to be kept in a separate fund
subject to the order of the board; and
(13) make monthly reports to the fiscal officer of the receipts
and disbursements of money belonging to each utility and an
annual 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 of
furnishing the commodity or service to the patrons of the municipally
owned utility or to the municipality itself.
(c) If the board wants to purchase the commodity or service from
a public utility and the parties cannot agree on a rate or charge to be
paid for it, either party may apply to the commission or other
appropriate state or federal regulatory agency to establish a fair and
reasonable 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 pay
charges legally due for sewer or sewage disposal plant service.
However, the water service may not be discontinued for nonpayment
of sewer or sewage disposal plant service charges until the charges
have been due and unpaid for at least thirty (30) days.
(e) Before water service is discontinued under subsection (d), the
board must give written notice to the water consumer or property
owner of its intention to discontinue water service if the unpaid
sewer or sewage disposal plant service charges are not paid before a
date specified in the notice. The notice must be mailed not less than
ten (10) days before water service is to be discontinued and
addressed to the water consumer or the property owner at his last
known 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 by
trust
Sec. 4.5. (a) This section applies to the award of a contract under
this chapter by acceptance of bids, proposals, or quotations.
(b) A bid, proposal, or quotation submitted by a trust (as defined
in 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 competitive
examination;
(3) investigate all claims against the utility;
(4) oversee the operation of the utility and any construction
work, repairs, or alterations to the system; and
(5) advise the board in all matters that will bring about an
efficient and economical operation and maintenance of the
utility.
(b) The superintendent is entitled to the compensation for his
services that is determined by resolution of the board.
(c) The superintendent shall give bond in a sum not less than
double the estimated amount of money that may be in his hands at
any time. The bond shall be conditioned upon the faithful discharge
of his duties and the payment to the proper person of all money in his
hands. The bond is subject to the approval of the executive of the
municipality.
(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 the
purpose 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 benefit
of the employees and past employees of each utility. The board may
provide for the method, manner, and amount of contributions by the
utility out of its earnings, reserves, or earned surplus, and by
employees if required by the plan, and may create an account for the
utilities and allocate to the account contributions sufficient to
establish the plan on a sound actuarial basis, including contributions
for past services of employees. However, the plan may not require
contributions from an employee to exceed six percent (6%) of his
wage 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 shall
furnish reasonably adequate services and facilities.
(b) The rates and charges made by a municipality for a service
rendered 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" means
rates and charges that produce sufficient revenue to:
(1) pay all the legal and other necessary expenses incident to the
operation of the utility, including:
(A) maintenance costs;
(B) operating charges;
(C) upkeep;
(D) repairs;
(E) depreciation;
(F) interest charges on bonds or other obligations, including
leases; and
(G) costs associated with the acquisition of utility property
under IC 8-1.5-2;
(2) provide a sinking fund for the liquidation of bonds or other
obligations, 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 or
obligations or the maximum annual lease rentals;
(4) provide adequate money for working capital;
(5) provide adequate money for making extensions and
replacements to the extent not provided for through
depreciation in subdivision (1); and
(6) provide money for the payment of any taxes that may be
assessed against the utility.
(d) It is the intent of this section that the rates and charges
produce an income sufficient to maintain the utility property in a
sound physical and financial condition to render adequate and
efficient service. Rates and charges too low to meet these
requirements are unlawful.
(e) The board may recommend to the municipal legislative body
rates and charges sufficient to include a reasonable return on the
utility plant of the municipality.
(f) Rates and charges established under this section are subject to
the approval of:
(1) the municipal legislative body by ordinance; and
(2) the commission, in accordance with the procedures set forth
in 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 the
municipality if the legislative body so elects.
(g) Except for a municipally owned utility taxed under
IC 6-1.1-8-3, the commission shall approve rates and charges
sufficient to compensate the municipality for taxes that would be due
the municipality on the utility property were it privately owned.
These rates and charges in lieu of taxes may be transferred to the
municipal general fund, if the legislative body so elects.
(h) The commission shall grant a request that an increase in rates
and charges not be effective until after the occurrence of a future
event if the legislative body so requests.
(i) A municipality that acquires and operates a utility under
IC 8-1.5-2 by exercising the power of eminent domain may not
impose a special rate, charge, surcharge, or other fee, other than rates
and charges approved under this section or otherwise authorized by
law, on the customers of the utility in order to pay for the costs
associated with acquiring the utility through the exercise of the
power 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 water
utilities that have been taken out of the jurisdiction of the
commission for the approval of rates and charges.
(b) After the introduction of the ordinance establishing the rates
and charges under section 8 of this chapter, but before the ordinance
is finally adopted, the municipal legislative body shall hold a public
hearing at which users of the waterworks, owners of property served
or to be served by the waterworks, and other interested persons may
be heard concerning the proposed rates and charges. Notice of the
hearing, 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 through
IC 5-3-1-9);
(2) mailed to owners of vacant or unimproved property if the
ordinance includes a fee for water service to vacant or
unimproved property; and
(3) mailed to users of the waterworks located outside the
municipality's corporate boundaries.
The notice may be mailed in any form so long as the notice of
hearing is conspicuous. The hearing may be adjourned from time to
time.
(c) After the hearing, the municipal legislative body shall adopt
the ordinance establishing the rates and charges, either as originally
introduced or as modified. A copy of the schedule of rates and
charges adopted shall be kept on file and available for public
inspection in the offices of the board and the municipal clerk.
(d) The rates and charges established for any class of users or
property shall be extended to cover any additional property that is
subsequently served and falls within the same class, without any
hearing or notice.
(e) The municipal legislative body may change or readjust the
rates and charges in the same manner as they were established.
(f) Rates and charges collected under this chapter are considered
revenues 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 water
utilities that have been taken out of the jurisdiction of the
commission for the approval of rates and charges.
(b) Owners of property connected or to be connected to and
served by the waterworks authorized under this chapter may file a
written petition objecting to the rates and charges of the waterworks
so long as:
(1) the petition contains the names and addresses of the
petitioners;
(2) the petitioners attended the public hearing provided under
section 8.1 of this chapter;
(3) the written petition is filed with the municipal legislative
body within five (5) days after the ordinance establishing the
rates and charges is adopted under section 8.1 of this chapter;
and
(4) the written petition states specifically the ground or grounds
of objection.
(c) Unless the objecting petition is abandoned, the municipal clerk
shall file in the office of the clerk of the circuit or superior court of
the county a copy of the rate ordinance or ordinances together with
the petition. The court shall then set the matter for hearing at the
earliest date possible, which must be within twenty (20) days after
the filing of the petition with the court. The court shall send notice
of the hearing by certified mail to the municipality and to the first
signer of the petition at the address shown on the petition. All
interested parties shall appear in the court without further notice, and
the municipality may not conduct any further proceedings concerning
the rates and charges until the matters presented by the petition have
been heard and determined by the court.
(d) At the discretion and upon direction of the court, the
petitioners shall file with the petition a bond in the sum and with the
security fixed by the court. The bond must be conditioned on the
petitioners' payment of all or part of the costs of the hearing and any
damages awarded to the municipality if the petition is denied, as
ordered by the court.
(e) Upon the date fixed in the notice, the court shall, without a
jury, hear the evidence produced. The court may confirm the
decision of the municipal legislative body or sustain the objecting
petition. The order of the court is final and conclusive upon all
parties to the proceeding and parties who might have appeared at the
hearing, subject only to the right of direct appeal. All questions that
were presented or might have been presented are considered to have
been adjudicated by the order of the court, and no collateral attack
upon the decision of the municipal legislative body or order of the
court is permitted.
(f) If the court sustains the petition, or if the petition is sustained
on appeal, the municipal legislative body shall set the rates and
charges 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 of
rates and charges; procedure
Sec. 9. (a) This subsection applies to a municipally owned utility
that before June 1, 1987, was taken out of the jurisdiction of the
commission for the approval of rates and charges. A utility to which
this subsection applies is removed from the jurisdiction of the
commission for approval of the issuance of stocks, bonds, notes, or
other evidence of indebtedness.
(b) Except as provided in subsection (a), a municipal legislative
body that wants to be taken out of the jurisdiction of the commission
for approval of rates and charges and of the issuance of stocks,
bonds, notes, or other evidence of indebtedness may submit the
following public question to the registered voters of the municipality
at the next election in the form prescribed by IC 3-10-9-4:
"Shall the municipally owned utility be taken out of the
jurisdiction of the utility regulatory commission for approval of
rates and charges and of the issuance of stocks, bonds, notes, or
other evidence of indebtedness?".
(c) A municipal legislative body shall certify the public question
to the county election board of the county that contains the greatest
percentage of population of the municipality under IC 3-10-9-3 and
submit the question under subsection (b) if it receives a petition that:
(1) is signed by at least the number of the registered voters of
the municipality required under IC 3-8-6-3 to place a candidate
on the ballot; and
(2) requests that the municipally owned utility be removed from
the jurisdiction of the commission for approval of rates and
charges and of the issuance of stocks, bonds, notes, or other
evidence of indebtedness.
(d) If a majority of those voting favor taking the municipally
owned utility out of the jurisdiction of the commission, the utility:
(1) is removed from the jurisdiction of the commission for
approval 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 commission
jurisdiction to the commission within thirty (30) days after the
utility'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 of
rates, charges, and evidences of indebtedness; alternative
procedure
Sec. 9.1. (a) This section applies to the following:
(1) Water utilities that are owned or operated by second class
cities.
(2) Third class cities.
(3) Towns.
(b) In addition to section 9 of this chapter, a municipally owned
utility to which this section applies may be removed from the
jurisdiction of the commission for the approval of rates and charges
and of the issuance of stocks, bonds, notes, or other evidence of
indebtedness, if the municipal legislative body adopts an ordinance
removing the utility from commission jurisdiction. The municipal
legislative body shall, at least thirty (30) days before the final vote on
the ordinance, mail written notice of the meeting to all ratepayers of
the utility and to the commission. For a second class city the
municipal legislative body must hold two (2) public meetings before
the final vote on an ordinance removing the utility from commission
jurisdiction may be adopted. An explanation of the removal process
must be provided at each public meeting under this section. Each
public 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 shall
be submitted to the registered voters of the municipality if, within the
sixty (60) day period described in subsection (c), the legislative body
receives a petition:
(1) that is signed by at least the number of the registered voters
of the municipality required under IC 3-8-6-3 to place a
candidate on the ballot; and
(2) that requests the legislative body to submit the question of
removal from commission jurisdiction to the registered voters
of the municipality at the next election.
The municipal legislative body shall certify the public question in
subsection (e) to the county election board of the county that
contains the greatest percentage of population of the municipality
under IC 3-10-9-3.
(e) If the legislative body receives a petition described in
subsection (d) in the proper form, the legislative body shall submit
the following public question to the registered voters of the
municipality at the next election in the form prescribed by
IC 3-10-9-4:
"Shall the municipally owned utility be taken out of the
jurisdiction of the Indiana utility regulatory commission for the
approval 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 to
the commission at least ten (10) days before the date of the election.
(f) If a majority of those voting on the question described in
subsection (e) favor taking the municipally owned utility out of the
jurisdiction of the commission, the utility is removed from the
jurisdiction of the commission for approval of rates and charges and
of the issuance of stocks, bonds, notes, or other evidences of
indebtedness.
(g) If the legislative body receives a petition in proper form under
subsection (d), the ordinance does not take effect until after removal
is approved by a majority of those voting. If a majority of those
voting vote against removal, the utility remains under the jurisdiction
of the commission and the ordinance does not take effect.
(h) In addition to the notice required by subsection (b), if the
municipal legislative body adopts the ordinance, described in
subsection (b), the municipal legislative body shall mail written
notice of the withdrawal from commission jurisdiction to the
commission within thirty (30) days after the ordinance becomes
effective.
(i) Notwithstanding this section or section 9 of this chapter, the
commission may require a municipally owned utility that generates
electric power to provide information to the permanent forecasting
group under IC 8-1-8.5-3.5.
(j) This section does not affect the obligations of a municipally
owned 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 utilities
that are withdrawn from commission jurisdiction under section 9 of
this chapter, including a municipally owned utility described in
section 9(a) of this chapter.
(b) A municipal legislative body that wants to return a
municipally owned utility to the jurisdiction of the commission for
approval of rates and charges and of the issuance of stocks, bonds,
notes, or other evidence of indebtedness may submit the following
public question to the registered voters of the municipality at the next
election in the form prescribed by IC 3-10-9-4:
"Shall the municipally owned utility be returned to the
jurisdiction of the utility regulatory commission for approval of
rates and charges and of the issuance of stocks, bonds, notes, or
other evidence of indebtedness?".
(c) A municipal legislative body shall certify the public question
to the county election board of the county that contains the greatest
percentage of population of the municipality under IC 3-10-9-3. The
county 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 of
the municipality required under IC 3-8-6-3 to place a candidate
on the ballot; and
(2) requests that the municipally owned utility be returned to
the jurisdiction of the commission for approval of rates and
charges and of the issuance of stocks, bonds, notes, or other
evidence of indebtedness.
(d) If a majority of those voting favor returning the municipally
owned utility to the jurisdiction of the commission, the utility is
returned to the jurisdiction of the commission for approval of rates
and charges and of the issuance of stocks, bonds, notes, or other
evidence of indebtedness. If a majority of those voting disapprove of
returning the municipally owned utility to the jurisdiction of the
commission, an election may not be conducted on the public question
of returning to the jurisdiction of the commission for four (4) years
from the date of the last election on that public question.
(e) The public question of returning to the jurisdiction of the
commission may not be submitted to the registered voters of the
municipality at an election conducted within four (4) years after the
date the municipally owned utility was last withdrawn from
commission jurisdiction.
(f) If a municipally owned utility is returned to the jurisdiction of
the commission under this section, the municipal legislative body
shall 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 removal
under alternative procedure
Sec. 9.6. (a) This section applies to municipally owned utilities
that are withdrawn from commission jurisdiction under section 9.1
of this chapter.
(b) The municipal legislative body may adopt an ordinance
returning the municipally owned utility to the jurisdiction of the
commission for the approval of rates and charges and of the issuance
of stocks, bonds, notes, or other evidence of indebtedness if it
receives a petition:
(1) that is signed by at least the number of the registered voters
of the municipality required under IC 3-8-6-3 to place a
candidate on the ballot; and
(2) that requests the legislative body to adopt an ordinance
returning the municipally owned utility to the jurisdiction of the
commission.
If the municipal legislative body fails to adopt an ordinance under
this subsection within ninety (90) days after receipt of the petition,
a petition requesting the adoption of an ordinance to return to
commission jurisdiction may not be submitted for four (4) years from
the date the last petition was submitted under this subsection.
(c) If the municipal legislative body fails to adopt the ordinance
described in subsection (b) within ninety (90) days after receipt of
the petition, the public question of the return to commission
jurisdiction shall be submitted to the registered voters of the
municipality if the legislative body receives a second petition:
(1) that is signed by at least the number of the registered voters
of the municipality required under IC 3-8-6-3 to place a
candidate on the ballot;
(2) that requests the legislative body to submit the question of
the return to commission jurisdiction to the registered voters of
the municipality at the next election; and
(3) that is submitted to the legislative body after the expiration
of the ninety (90) day period described in this subsection.
The municipal legislative body shall certify the public question
described in subsection (d) to the county election board of the county
that contains the greatest percentage of population of the
municipality under IC 3-10-9-3.
(d) If the legislative body receives a petition described in
subsection (c) in the proper form, the legislative body shall submit
the following public question to the registered voters of the
municipality at the next election in the form prescribed by
IC 3-10-9-4:
"Shall the municipally owned utility be returned to the
jurisdiction of the utility regulatory commission for the
approval 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 to
the commission at least ten (10) days before the date of the election.
(e) If a majority of those voting on the question described in
subsection (d) favor returning the municipally owned utility to the
jurisdiction of the commission, the utility is returned to the
jurisdiction of the commission for approval of rates and charges and
of the issuance of stocks, bonds, notes, or other evidence of
indebtedness. If a majority of those voting disapprove of returning
the municipally owned utility to the jurisdiction of the commission,
an election may not be conducted on the public question of returning
to the jurisdiction of the commission for four (4) years from the date
of the last election on that public question.
(f) The public question of returning to the jurisdiction of the
commission may not be submitted to the registered voters of the
municipality at an election conducted within four (4) years after the
date the municipally owned utility was last withdrawn from
commission jurisdiction. In addition, a petition requesting the
adoption of an ordinance under subsection (b) may not be submitted
within four (4) years after the date the municipally owned utility was
last withdrawn from commission jurisdiction.
(g) If a municipally owned utility is returned to commission
jurisdiction under this section, the municipal legislative body shall
mail 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 that
provides service outside the corporate boundaries of the
municipality, the charges for service outside the corporate
boundaries may not differ from the charges for service inside the
corporate boundaries unless the utility clearly demonstrates
significant cost factors that make different charges
nondiscriminatory, 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 owned
utility shall be kept by the municipal fiscal officer as separate funds
as required by any bond ordinance or accounting procedures
established by the commission or the state board of accounts. The
municipal legislative body, with the approval of the board, may
transfer surplus earnings of the utility to the general fund. The money
may not, however, be transferred unless the terms and conditions of
any 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 carried
on the records of the utility or utilities by providing for monthly
contributions or transfers to the cash reserve fund of surplus earnings
of the utility or utilities.
(c) "Surplus earnings" are those cash earnings remaining after
provision 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 body
may include in the municipal general fund budget, as revenue in lieu
of taxes, an amount equal to the actual balance in the cash reserve
fund as of June 30 of the current year. However, the available cash
reserve fund balance may be transferred to the municipal general
fund only during the calendar year for which the budget was adopted,
and transfers may not be made from any utility funds to the general
fund except from the cash reserve fund.
(e) If at any time after the final approval of the budget an
emergency should arise for further appropriations from the general
fund, the legislative body may, by ordinance, transfer additional
money from the cash reserve fund to the general fund to provide for
the additional appropriations, the transfer to be limited to the
accretions to the cash reserve fund since the preceding June 30.
(f) A cash reserve fund, if authorized by ordinance, may be used
to make loans to another utility owned by the same municipality, for
periods not to exceed five (5) years, at any interest rate. The
repayment of the loan and interest shall be returned to the cash
reserve 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 on
amount
Sec. 12. (a) A municipality may, by ordinance of its legislative
body, borrow money from a utility owned by the municipality for any
of the following purposes:
(1) Current purposes in anticipation of taxes levied and to be
collected during the current or following year.
(2) Carrying out an eligible efficiency project (as defined in
IC 36-9-41-1.5) within the municipality.
(b) The board may by resolution lend money to the municipality
if the utility has on hand:
(1) a surplus of cash exceeding by at least the amount loaned
the sum of all amounts required to pay the indebtedness of the
utility falling due during the current calendar year and the
following year;
(2) the amount necessary to meet current expenses during the
year; and
(3) the amount necessary to pay for improvements contemplated
to be made during the current calendar year minus the estimated
receipts during the calendar year.
(c) A loan made under subsection (a)(1) may not be made for a
sum in excess of fifty percent (50%) of the amount estimated to be
collected 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 the
payment of anticipated taxes, in the case of a loan made
under 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 loan
made 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 money
of 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 of
the commission for approval of rates and charges and of the issuance
of stocks, bonds, notes, or other evidence of indebtedness shall file
with the commission an annual report of the operation of the plant on
forms prescribed by the commission. The annual reports shall be kept
in the office of the commission as a public record. A municipally
owned utility that has withdrawn from commission jurisdiction under
IC 8-1-2-100 (before its repeal on January 1, 1983) or section 9 or
9.1 of this chapter is not required to file the annual report required by
this section.
(b) The state board of accounts shall examine all accounts of
every municipally owned utility at regular intervals. In the
examination, 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 the
utilities examined.
The examination shall be made without notice, and its cost shall be
paid 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 and
powers conferred by IC 8-1-11.1-3.1, notwithstanding section 1 of
this chapter. As added by Acts 1982, P.L.74, SEC.1.
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, except
consolidated 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 board
operating a municipally owned utility as determined under section 3
of 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 class
cities; ordinance; creation of utility service board
Sec. 3. (a) The legislative body of a municipality may, by
ordinance, provide for the control of any or all of its municipally
owned utilities by:
(1) the municipal works board;
(2) a board consisting of the members of the municipal
legislative body;
(3) a utility service board established under subsection (f) or
established before January 1, 1983, under IC 8-1-2-100
(repealed); or
(4) the board of directors of a department of waterworks
established under IC 8-1.5-4.
The legislative body of a third class city also may adopt an ordinance
under this subsection to provide for the control of any or all of its
storm water facilities by a board described in subdivisions (1)
through (4). An ordinance granting control of any or all of a third
class city's storm water facilities to a board described in this
subsection may be separate from or combined with an ordinance
granting control of the third class city's municipally owned utilities
to a board described in this subsection.
(b) If, at the time an ordinance is adopted under subsection (a) to
grant control of any or all of a third class city's storm water facilities
to a board described in subsection (a) the third class city has a
department of storm water management under IC 8-1.5-5, the
ordinance must specify a procedure for the transition of control of
the affected storm water facilities from the board of directors of the
department of storm water management to the board described in
subsection (a).
(c) The registered voters of a municipality may file a petition
addressed to the legislative body requesting that the question of the
creation of a utility service board be submitted to a referendum. The
petition 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 on
the ballot.
(d) Within thirty (30) days after a petition is filed, the municipal
clerk shall certify to the legislative body and to the county election
board that a sufficient petition has been filed.
(e) Following certification, the legislative body shall submit the
question of the creation of a utility service board to a referendum at
the next election. The question shall be submitted to the registered
voters of the municipality by placement on the ballot in the form
prescribed 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 service
board to operate ____________ (Insert name of utility here)?".
(f) If a majority of the voters voting on the question vote for the
creation of a utility service board, the legislative body shall, by
ordinance, establish a utility service board consisting of not less than
three (3) nor more than seven (7) members. Not more than two-thirds
(2/3) of the members may be of the same political party. All
members must be residents of the area served by the board. The
ordinance must provide for:
(1) a majority of the members to be appointed by the executive
and a minority of the members to be appointed by the legislative
body;
(2) the terms of the members, which may not exceed four (4)
years, with initial terms prescribed so that the members' terms
will 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 be
considered the head of a department for purposes of
IC 36-4-9-2.
(g) The registered voters of the municipality may also file a
petition requesting that the question of the abolition of the utility
service board be submitted to a referendum. The procedure for filing
of the petition and the referendum is the same as that prescribed by
subsections (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 the
utilities under its control, with responsibility for the detailed
supervision of each utility to be vested in its superintendent, who is
responsible to the board for the business and technical operation of
the utility. The board shall:
(1) fix the number and compensation of employees;
(2) adopt rules governing the appointment of employees
including making proper classifications and rules to:
(A) determine the eligibility of applicants;
(B) determine by competitive examination the relative
fitness of applicants for positions;
(C) establish eligible lists arranged according to the ratings
secured;
(D) provide for the appointment of those having the highest
ratings; and
(E) provide for the promotion of employees;
(3) subject to IC 36-4-9-2, appoint a superintendent or manager
of each utility under its control who is responsible to the board
for the business and technical operation of the utility; the board
shall make the appointment on the basis of fitness to manage
the particular utility to which he is to be assigned, taking into
account his executive ability and his knowledge of the utility
industry;
(4) subject to IC 36-4-9-12, hire attorneys when required for the
operation of the utility;
(5) hire professional or expert personnel when required for the
operation of the utility;
(6) submit a budget of its financial needs for the next year in the
detail required by the municipal legislative body;
(7) recommend to the legislative body reasonable and just rates
and charges for services to the patrons of each utility;
(8) appropriate, lease, rent, purchase, and hold all real and
personal property of the utility;
(9) enter upon lands for the purpose of surveying or examining
the land to determine the location of any plant or
appurtenances;
(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 full
and efficient construction, management, and operation of
each utility;
(11) adopt rules for the safe, economical, and efficient
management and protection of each utility;
(12) deposit at least weekly with the municipal fiscal officer all
money collected from each utility to be kept in a separate fund
subject to the order of the board; and
(13) make monthly reports to the fiscal officer of the receipts
and disbursements of money belonging to each utility and an
annual 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 of
furnishing the commodity or service to the patrons of the municipally
owned utility or to the municipality itself.
(c) If the board wants to purchase the commodity or service from
a public utility and the parties cannot agree on a rate or charge to be
paid for it, either party may apply to the commission or other
appropriate state or federal regulatory agency to establish a fair and
reasonable 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 pay
charges legally due for sewer or sewage disposal plant service.
However, the water service may not be discontinued for nonpayment
of sewer or sewage disposal plant service charges until the charges
have been due and unpaid for at least thirty (30) days.
(e) Before water service is discontinued under subsection (d), the
board must give written notice to the water consumer or property
owner of its intention to discontinue water service if the unpaid
sewer or sewage disposal plant service charges are not paid before a
date specified in the notice. The notice must be mailed not less than
ten (10) days before water service is to be discontinued and
addressed to the water consumer or the property owner at his last
known 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 by
trust
Sec. 4.5. (a) This section applies to the award of a contract under
this chapter by acceptance of bids, proposals, or quotations.
(b) A bid, proposal, or quotation submitted by a trust (as defined
in 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 competitive
examination;
(3) investigate all claims against the utility;
(4) oversee the operation of the utility and any construction
work, repairs, or alterations to the system; and
(5) advise the board in all matters that will bring about an
efficient and economical operation and maintenance of the
utility.
(b) The superintendent is entitled to the compensation for his
services that is determined by resolution of the board.
(c) The superintendent shall give bond in a sum not less than
double the estimated amount of money that may be in his hands at
any time. The bond shall be conditioned upon the faithful discharge
of his duties and the payment to the proper person of all money in his
hands. The bond is subject to the approval of the executive of the
municipality.
(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 the
purpose 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 benefit
of the employees and past employees of each utility. The board may
provide for the method, manner, and amount of contributions by the
utility out of its earnings, reserves, or earned surplus, and by
employees if required by the plan, and may create an account for the
utilities and allocate to the account contributions sufficient to
establish the plan on a sound actuarial basis, including contributions
for past services of employees. However, the plan may not require
contributions from an employee to exceed six percent (6%) of his
wage 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 shall
furnish reasonably adequate services and facilities.
(b) The rates and charges made by a municipality for a service
rendered 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" means
rates and charges that produce sufficient revenue to:
(1) pay all the legal and other necessary expenses incident to the
operation of the utility, including:
(A) maintenance costs;
(B) operating charges;
(C) upkeep;
(D) repairs;
(E) depreciation;
(F) interest charges on bonds or other obligations, including
leases; and
(G) costs associated with the acquisition of utility property
under IC 8-1.5-2;
(2) provide a sinking fund for the liquidation of bonds or other
obligations, 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 or
obligations or the maximum annual lease rentals;
(4) provide adequate money for working capital;
(5) provide adequate money for making extensions and
replacements to the extent not provided for through
depreciation in subdivision (1); and
(6) provide money for the payment of any taxes that may be
assessed against the utility.
(d) It is the intent of this section that the rates and charges
produce an income sufficient to maintain the utility property in a
sound physical and financial condition to render adequate and
efficient service. Rates and charges too low to meet these
requirements are unlawful.
(e) The board may recommend to the municipal legislative body
rates and charges sufficient to include a reasonable return on the
utility plant of the municipality.
(f) Rates and charges established under this section are subject to
the approval of:
(1) the municipal legislative body by ordinance; and
(2) the commission, in accordance with the procedures set forth
in 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 the
municipality if the legislative body so elects.
(g) Except for a municipally owned utility taxed under
IC 6-1.1-8-3, the commission shall approve rates and charges
sufficient to compensate the municipality for taxes that would be due
the municipality on the utility property were it privately owned.
These rates and charges in lieu of taxes may be transferred to the
municipal general fund, if the legislative body so elects.
(h) The commission shall grant a request that an increase in rates
and charges not be effective until after the occurrence of a future
event if the legislative body so requests.
(i) A municipality that acquires and operates a utility under
IC 8-1.5-2 by exercising the power of eminent domain may not
impose a special rate, charge, surcharge, or other fee, other than rates
and charges approved under this section or otherwise authorized by
law, on the customers of the utility in order to pay for the costs
associated with acquiring the utility through the exercise of the
power 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 water
utilities that have been taken out of the jurisdiction of the
commission for the approval of rates and charges.
(b) After the introduction of the ordinance establishing the rates
and charges under section 8 of this chapter, but before the ordinance
is finally adopted, the municipal legislative body shall hold a public
hearing at which users of the waterworks, owners of property served
or to be served by the waterworks, and other interested persons may
be heard concerning the proposed rates and charges. Notice of the
hearing, 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 through
IC 5-3-1-9);
(2) mailed to owners of vacant or unimproved property if the
ordinance includes a fee for water service to vacant or
unimproved property; and
(3) mailed to users of the waterworks located outside the
municipality's corporate boundaries.
The notice may be mailed in any form so long as the notice of
hearing is conspicuous. The hearing may be adjourned from time to
time.
(c) After the hearing, the municipal legislative body shall adopt
the ordinance establishing the rates and charges, either as originally
introduced or as modified. A copy of the schedule of rates and
charges adopted shall be kept on file and available for public
inspection in the offices of the board and the municipal clerk.
(d) The rates and charges established for any class of users or
property shall be extended to cover any additional property that is
subsequently served and falls within the same class, without any
hearing or notice.
(e) The municipal legislative body may change or readjust the
rates and charges in the same manner as they were established.
(f) Rates and charges collected under this chapter are considered
revenues 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 water
utilities that have been taken out of the jurisdiction of the
commission for the approval of rates and charges.
(b) Owners of property connected or to be connected to and
served by the waterworks authorized under this chapter may file a
written petition objecting to the rates and charges of the waterworks
so long as:
(1) the petition contains the names and addresses of the
petitioners;
(2) the petitioners attended the public hearing provided under
section 8.1 of this chapter;
(3) the written petition is filed with the municipal legislative
body within five (5) days after the ordinance establishing the
rates and charges is adopted under section 8.1 of this chapter;
and
(4) the written petition states specifically the ground or grounds
of objection.
(c) Unless the objecting petition is abandoned, the municipal clerk
shall file in the office of the clerk of the circuit or superior court of
the county a copy of the rate ordinance or ordinances together with
the petition. The court shall then set the matter for hearing at the
earliest date possible, which must be within twenty (20) days after
the filing of the petition with the court. The court shall send notice
of the hearing by certified mail to the municipality and to the first
signer of the petition at the address shown on the petition. All
interested parties shall appear in the court without further notice, and
the municipality may not conduct any further proceedings concerning
the rates and charges until the matters presented by the petition have
been heard and determined by the court.
(d) At the discretion and upon direction of the court, the
petitioners shall file with the petition a bond in the sum and with the
security fixed by the court. The bond must be conditioned on the
petitioners' payment of all or part of the costs of the hearing and any
damages awarded to the municipality if the petition is denied, as
ordered by the court.
(e) Upon the date fixed in the notice, the court shall, without a
jury, hear the evidence produced. The court may confirm the
decision of the municipal legislative body or sustain the objecting
petition. The order of the court is final and conclusive upon all
parties to the proceeding and parties who might have appeared at the
hearing, subject only to the right of direct appeal. All questions that
were presented or might have been presented are considered to have
been adjudicated by the order of the court, and no collateral attack
upon the decision of the municipal legislative body or order of the
court is permitted.
(f) If the court sustains the petition, or if the petition is sustained
on appeal, the municipal legislative body shall set the rates and
charges 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 of
rates and charges; procedure
Sec. 9. (a) This subsection applies to a municipally owned utility
that before June 1, 1987, was taken out of the jurisdiction of the
commission for the approval of rates and charges. A utility to which
this subsection applies is removed from the jurisdiction of the
commission for approval of the issuance of stocks, bonds, notes, or
other evidence of indebtedness.
(b) Except as provided in subsection (a), a municipal legislative
body that wants to be taken out of the jurisdiction of the commission
for approval of rates and charges and of the issuance of stocks,
bonds, notes, or other evidence of indebtedness may submit the
following public question to the registered voters of the municipality
at the next election in the form prescribed by IC 3-10-9-4:
"Shall the municipally owned utility be taken out of the
jurisdiction of the utility regulatory commission for approval of
rates and charges and of the issuance of stocks, bonds, notes, or
other evidence of indebtedness?".
(c) A municipal legislative body shall certify the public question
to the county election board of the county that contains the greatest
percentage of population of the municipality under IC 3-10-9-3 and
submit the question under subsection (b) if it receives a petition that:
(1) is signed by at least the number of the registered voters of
the municipality required under IC 3-8-6-3 to place a candidate
on the ballot; and
(2) requests that the municipally owned utility be removed from
the jurisdiction of the commission for approval of rates and
charges and of the issuance of stocks, bonds, notes, or other
evidence of indebtedness.
(d) If a majority of those voting favor taking the municipally
owned utility out of the jurisdiction of the commission, the utility:
(1) is removed from the jurisdiction of the commission for
approval 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 commission
jurisdiction to the commission within thirty (30) days after the
utility'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 of
rates, charges, and evidences of indebtedness; alternative
procedure
Sec. 9.1. (a) This section applies to the following:
(1) Water utilities that are owned or operated by second class
cities.
(2) Third class cities.
(3) Towns.
(b) In addition to section 9 of this chapter, a municipally owned
utility to which this section applies may be removed from the
jurisdiction of the commission for the approval of rates and charges
and of the issuance of stocks, bonds, notes, or other evidence of
indebtedness, if the municipal legislative body adopts an ordinance
removing the utility from commission jurisdiction. The municipal
legislative body shall, at least thirty (30) days before the final vote on
the ordinance, mail written notice of the meeting to all ratepayers of
the utility and to the commission. For a second class city the
municipal legislative body must hold two (2) public meetings before
the final vote on an ordinance removing the utility from commission
jurisdiction may be adopted. An explanation of the removal process
must be provided at each public meeting under this section. Each
public 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 shall
be submitted to the registered voters of the municipality if, within the
sixty (60) day period described in subsection (c), the legislative body
receives a petition:
(1) that is signed by at least the number of the registered voters
of the municipality required under IC 3-8-6-3 to place a
candidate on the ballot; and
(2) that requests the legislative body to submit the question of
removal from commission jurisdiction to the registered voters
of the municipality at the next election.
The municipal legislative body shall certify the public question in
subsection (e) to the county election board of the county that
contains the greatest percentage of population of the municipality
under IC 3-10-9-3.
(e) If the legislative body receives a petition described in
subsection (d) in the proper form, the legislative body shall submit
the following public question to the registered voters of the
municipality at the next election in the form prescribed by
IC 3-10-9-4:
"Shall the municipally owned utility be taken out of the
jurisdiction of the Indiana utility regulatory commission for the
approval 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 to
the commission at least ten (10) days before the date of the election.
(f) If a majority of those voting on the question described in
subsection (e) favor taking the municipally owned utility out of the
jurisdiction of the commission, the utility is removed from the
jurisdiction of the commission for approval of rates and charges and
of the issuance of stocks, bonds, notes, or other evidences of
indebtedness.
(g) If the legislative body receives a petition in proper form under
subsection (d), the ordinance does not take effect until after removal
is approved by a majority of those voting. If a majority of those
voting vote against removal, the utility remains under the jurisdiction
of the commission and the ordinance does not take effect.
(h) In addition to the notice required by subsection (b), if the
municipal legislative body adopts the ordinance, described in
subsection (b), the municipal legislative body shall mail written
notice of the withdrawal from commission jurisdiction to the
commission within thirty (30) days after the ordinance becomes
effective.
(i) Notwithstanding this section or section 9 of this chapter, the
commission may require a municipally owned utility that generates
electric power to provide information to the permanent forecasting
group under IC 8-1-8.5-3.5.
(j) This section does not affect the obligations of a municipally
owned 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 utilities
that are withdrawn from commission jurisdiction under section 9 of
this chapter, including a municipally owned utility described in
section 9(a) of this chapter.
(b) A municipal legislative body that wants to return a
municipally owned utility to the jurisdiction of the commission for
approval of rates and charges and of the issuance of stocks, bonds,
notes, or other evidence of indebtedness may submit the following
public question to the registered voters of the municipality at the next
election in the form prescribed by IC 3-10-9-4:
"Shall the municipally owned utility be returned to the
jurisdiction of the utility regulatory commission for approval of
rates and charges and of the issuance of stocks, bonds, notes, or
other evidence of indebtedness?".
(c) A municipal legislative body shall certify the public question
to the county election board of the county that contains the greatest
percentage of population of the municipality under IC 3-10-9-3. The
county 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 of
the municipality required under IC 3-8-6-3 to place a candidate
on the ballot; and
(2) requests that the municipally owned utility be returned to
the jurisdiction of the commission for approval of rates and
charges and of the issuance of stocks, bonds, notes, or other
evidence of indebtedness.
(d) If a majority of those voting favor returning the municipally
owned utility to the jurisdiction of the commission, the utility is
returned to the jurisdiction of the commission for approval of rates
and charges and of the issuance of stocks, bonds, notes, or other
evidence of indebtedness. If a majority of those voting disapprove of
returning the municipally owned utility to the jurisdiction of the
commission, an election may not be conducted on the public question
of returning to the jurisdiction of the commission for four (4) years
from the date of the last election on that public question.
(e) The public question of returning to the jurisdiction of the
commission may not be submitted to the registered voters of the
municipality at an election conducted within four (4) years after the
date the municipally owned utility was last withdrawn from
commission jurisdiction.
(f) If a municipally owned utility is returned to the jurisdiction of
the commission under this section, the municipal legislative body
shall 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 removal
under alternative procedure
Sec. 9.6. (a) This section applies to municipally owned utilities
that are withdrawn from commission jurisdiction under section 9.1
of this chapter.
(b) The municipal legislative body may adopt an ordinance
returning the municipally owned utility to the jurisdiction of the
commission for the approval of rates and charges and of the issuance
of stocks, bonds, notes, or other evidence of indebtedness if it
receives a petition:
(1) that is signed by at least the number of the registered voters
of the municipality required under IC 3-8-6-3 to place a
candidate on the ballot; and
(2) that requests the legislative body to adopt an ordinance
returning the municipally owned utility to the jurisdiction of the
commission.
If the municipal legislative body fails to adopt an ordinance under
this subsection within ninety (90) days after receipt of the petition,
a petition requesting the adoption of an ordinance to return to
commission jurisdiction may not be submitted for four (4) years from
the date the last petition was submitted under this subsection.
(c) If the municipal legislative body fails to adopt the ordinance
described in subsection (b) within ninety (90) days after receipt of
the petition, the public question of the return to commission
jurisdiction shall be submitted to the registered voters of the
municipality if the legislative body receives a second petition:
(1) that is signed by at least the number of the registered voters
of the municipality required under IC 3-8-6-3 to place a
candidate on the ballot;
(2) that requests the legislative body to submit the question of
the return to commission jurisdiction to the registered voters of
the municipality at the next election; and
(3) that is submitted to the legislative body after the expiration
of the ninety (90) day period described in this subsection.
The municipal legislative body shall certify the public question
described in subsection (d) to the county election board of the county
that contains the greatest percentage of population of the
municipality under IC 3-10-9-3.
(d) If the legislative body receives a petition described in
subsection (c) in the proper form, the legislative body shall submit
the following public question to the registered voters of the
municipality at the next election in the form prescribed by
IC 3-10-9-4:
"Shall the municipally owned utility be returned to the
jurisdiction of the utility regulatory commission for the
approval 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 to
the commission at least ten (10) days before the date of the election.
(e) If a majority of those voting on the question described in
subsection (d) favor returning the municipally owned utility to the
jurisdiction of the commission, the utility is returned to the
jurisdiction of the commission for approval of rates and charges and
of the issuance of stocks, bonds, notes, or other evidence of
indebtedness. If a majority of those voting disapprove of returning
the municipally owned utility to the jurisdiction of the commission,
an election may not be conducted on the public question of returning
to the jurisdiction of the commission for four (4) years from the date
of the last election on that public question.
(f) The public question of returning to the jurisdiction of the
commission may not be submitted to the registered voters of the
municipality at an election conducted within four (4) years after the
date the municipally owned utility was last withdrawn from
commission jurisdiction. In addition, a petition requesting the
adoption of an ordinance under subsection (b) may not be submitted
within four (4) years after the date the municipally owned utility was
last withdrawn from commission jurisdiction.
(g) If a municipally owned utility is returned to commission
jurisdiction under this section, the municipal legislative body shall
mail 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 that
provides service outside the corporate boundaries of the
municipality, the charges for service outside the corporate
boundaries may not differ from the charges for service inside the
corporate boundaries unless the utility clearly demonstrates
significant cost factors that make different charges
nondiscriminatory, 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 owned
utility shall be kept by the municipal fiscal officer as separate funds
as required by any bond ordinance or accounting procedures
established by the commission or the state board of accounts. The
municipal legislative body, with the approval of the board, may
transfer surplus earnings of the utility to the general fund. The money
may not, however, be transferred unless the terms and conditions of
any 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 carried
on the records of the utility or utilities by providing for monthly
contributions or transfers to the cash reserve fund of surplus earnings
of the utility or utilities.
(c) "Surplus earnings" are those cash earnings remaining after
provision 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 body
may include in the municipal general fund budget, as revenue in lieu
of taxes, an amount equal to the actual balance in the cash reserve
fund as of June 30 of the current year. However, the available cash
reserve fund balance may be transferred to the municipal general
fund only during the calendar year for which the budget was adopted,
and transfers may not be made from any utility funds to the general
fund except from the cash reserve fund.
(e) If at any time after the final approval of the budget an
emergency should arise for further appropriations from the general
fund, the legislative body may, by ordinance, transfer additional
money from the cash reserve fund to the general fund to provide for
the additional appropriations, the transfer to be limited to the
accretions to the cash reserve fund since the preceding June 30.
(f) A cash reserve fund, if authorized by ordinance, may be used
to make loans to another utility owned by the same municipality, for
periods not to exceed five (5) years, at any interest rate. The
repayment of the loan and interest shall be returned to the cash
reserve 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 on
amount
Sec. 12. (a) A municipality may, by ordinance of its legislative
body, borrow money from a utility owned by the municipality for any
of the following purposes:
(1) Current purposes in anticipation of taxes levied and to be
collected during the current or following year.
(2) Carrying out an eligible efficiency project (as defined in
IC 36-9-41-1.5) within the municipality.
(b) The board may by resolution lend money to the municipality
if the utility has on hand:
(1) a surplus of cash exceeding by at least the amount loaned
the sum of all amounts required to pay the indebtedness of the
utility falling due during the current calendar year and the
following year;
(2) the amount necessary to meet current expenses during the
year; and
(3) the amount necessary to pay for improvements contemplated
to be made during the current calendar year minus the estimated
receipts during the calendar year.
(c) A loan made under subsection (a)(1) may not be made for a
sum in excess of fifty percent (50%) of the amount estimated to be
collected 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 the
payment of anticipated taxes, in the case of a loan made
under 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 loan
made 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 money
of 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 of
the commission for approval of rates and charges and of the issuance
of stocks, bonds, notes, or other evidence of indebtedness shall file
with the commission an annual report of the operation of the plant on
forms prescribed by the commission. The annual reports shall be kept
in the office of the commission as a public record. A municipally
owned utility that has withdrawn from commission jurisdiction under
IC 8-1-2-100 (before its repeal on January 1, 1983) or section 9 or
9.1 of this chapter is not required to file the annual report required by
this section.
(b) The state board of accounts shall examine all accounts of
every municipally owned utility at regular intervals. In the
examination, 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 the
utilities examined.
The examination shall be made without notice, and its cost shall be
paid 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 and
powers conferred by IC 8-1-11.1-3.1, notwithstanding section 1 of
this chapter. As added by Acts 1982, P.L.74, SEC.1.
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, except
consolidated 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 board
operating a municipally owned utility as determined under section 3
of 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 class
cities; ordinance; creation of utility service board
Sec. 3. (a) The legislative body of a municipality may, by
ordinance, provide for the control of any or all of its municipally
owned utilities by:
(1) the municipal works board;
(2) a board consisting of the members of the municipal
legislative body;
(3) a utility service board established under subsection (f) or
established before January 1, 1983, under IC 8-1-2-100
(repealed); or
(4) the board of directors of a department of waterworks
established under IC 8-1.5-4.
The legislative body of a third class city also may adopt an ordinance
under this subsection to provide for the control of any or all of its
storm water facilities by a board described in subdivisions (1)
through (4). An ordinance granting control of any or all of a third
class city's storm water facilities to a board described in this
subsection may be separate from or combined with an ordinance
granting control of the third class city's municipally owned utilities
to a board described in this subsection.
(b) If, at the time an ordinance is adopted under subsection (a) to
grant control of any or all of a third class city's storm water facilities
to a board described in subsection (a) the third class city has a
department of storm water management under IC 8-1.5-5, the
ordinance must specify a procedure for the transition of control of
the affected storm water facilities from the board of directors of the
department of storm water management to the board described in
subsection (a).
(c) The registered voters of a municipality may file a petition
addressed to the legislative body requesting that the question of the
creation of a utility service board be submitted to a referendum. The
petition 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 on
the ballot.
(d) Within thirty (30) days after a petition is filed, the municipal
clerk shall certify to the legislative body and to the county election
board that a sufficient petition has been filed.
(e) Following certification, the legislative body shall submit the
question of the creation of a utility service board to a referendum at
the next election. The question shall be submitted to the registered
voters of the municipality by placement on the ballot in the form
prescribed 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 service
board to operate ____________ (Insert name of utility here)?".
(f) If a majority of the voters voting on the question vote for the
creation of a utility service board, the legislative body shall, by
ordinance, establish a utility service board consisting of not less than
three (3) nor more than seven (7) members. Not more than two-thirds
(2/3) of the members may be of the same political party. All
members must be residents of the area served by the board. The
ordinance must provide for:
(1) a majority of the members to be appointed by the executive
and a minority of the members to be appointed by the legislative
body;
(2) the terms of the members, which may not exceed four (4)
years, with initial terms prescribed so that the members' terms
will 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 be
considered the head of a department for purposes of
IC 36-4-9-2.
(g) The registered voters of the municipality may also file a
petition requesting that the question of the abolition of the utility
service board be submitted to a referendum. The procedure for filing
of the petition and the referendum is the same as that prescribed by
subsections (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 the
utilities under its control, with responsibility for the detailed
supervision of each utility to be vested in its superintendent, who is
responsible to the board for the business and technical operation of
the utility. The board shall:
(1) fix the number and compensation of employees;
(2) adopt rules governing the appointment of employees
including making proper classifications and rules to:
(A) determine the eligibility of applicants;
(B) determine by competitive examination the relative
fitness of applicants for positions;
(C) establish eligible lists arranged according to the ratings
secured;
(D) provide for the appointment of those having the highest
ratings; and
(E) provide for the promotion of employees;
(3) subject to IC 36-4-9-2, appoint a superintendent or manager
of each utility under its control who is responsible to the board
for the business and technical operation of the utility; the board
shall make the appointment on the basis of fitness to manage
the particular utility to which he is to be assigned, taking into
account his executive ability and his knowledge of the utility
industry;
(4) subject to IC 36-4-9-12, hire attorneys when required for the
operation of the utility;
(5) hire professional or expert personnel when required for the
operation of the utility;
(6) submit a budget of its financial needs for the next year in the
detail required by the municipal legislative body;
(7) recommend to the legislative body reasonable and just rates
and charges for services to the patrons of each utility;
(8) appropriate, lease, rent, purchase, and hold all real and
personal property of the utility;
(9) enter upon lands for the purpose of surveying or examining
the land to determine the location of any plant or
appurtenances;
(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 full
and efficient construction, management, and operation of
each utility;
(11) adopt rules for the safe, economical, and efficient
management and protection of each utility;
(12) deposit at least weekly with the municipal fiscal officer all
money collected from each utility to be kept in a separate fund
subject to the order of the board; and
(13) make monthly reports to the fiscal officer of the receipts
and disbursements of money belonging to each utility and an
annual 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 of
furnishing the commodity or service to the patrons of the municipally
owned utility or to the municipality itself.
(c) If the board wants to purchase the commodity or service from
a public utility and the parties cannot agree on a rate or charge to be
paid for it, either party may apply to the commission or other
appropriate state or federal regulatory agency to establish a fair and
reasonable 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 pay
charges legally due for sewer or sewage disposal plant service.
However, the water service may not be discontinued for nonpayment
of sewer or sewage disposal plant service charges until the charges
have been due and unpaid for at least thirty (30) days.
(e) Before water service is discontinued under subsection (d), the
board must give written notice to the water consumer or property
owner of its intention to discontinue water service if the unpaid
sewer or sewage disposal plant service charges are not paid before a
date specified in the notice. The notice must be mailed not less than
ten (10) days before water service is to be discontinued and
addressed to the water consumer or the property owner at his last
known 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 by
trust
Sec. 4.5. (a) This section applies to the award of a contract under
this chapter by acceptance of bids, proposals, or quotations.
(b) A bid, proposal, or quotation submitted by a trust (as defined
in 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 competitive
examination;
(3) investigate all claims against the utility;
(4) oversee the operation of the utility and any construction
work, repairs, or alterations to the system; and
(5) advise the board in all matters that will bring about an
efficient and economical operation and maintenance of the
utility.
(b) The superintendent is entitled to the compensation for his
services that is determined by resolution of the board.
(c) The superintendent shall give bond in a sum not less than
double the estimated amount of money that may be in his hands at
any time. The bond shall be conditioned upon the faithful discharge
of his duties and the payment to the proper person of all money in his
hands. The bond is subject to the approval of the executive of the
municipality.
(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 the
purpose 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 benefit
of the employees and past employees of each utility. The board may
provide for the method, manner, and amount of contributions by the
utility out of its earnings, reserves, or earned surplus, and by
employees if required by the plan, and may create an account for the
utilities and allocate to the account contributions sufficient to
establish the plan on a sound actuarial basis, including contributions
for past services of employees. However, the plan may not require
contributions from an employee to exceed six percent (6%) of his
wage 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 shall
furnish reasonably adequate services and facilities.
(b) The rates and charges made by a municipality for a service
rendered 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" means
rates and charges that produce sufficient revenue to:
(1) pay all the legal and other necessary expenses incident to the
operation of the utility, including:
(A) maintenance costs;
(B) operating charges;
(C) upkeep;
(D) repairs;
(E) depreciation;
(F) interest charges on bonds or other obligations, including
leases; and
(G) costs associated with the acquisition of utility property
under IC 8-1.5-2;
(2) provide a sinking fund for the liquidation of bonds or other
obligations, 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 or
obligations or the maximum annual lease rentals;
(4) provide adequate money for working capital;
(5) provide adequate money for making extensions and
replacements to the extent not provided for through
depreciation in subdivision (1); and
(6) provide money for the payment of any taxes that may be
assessed against the utility.
(d) It is the intent of this section that the rates and charges
produce an income sufficient to maintain the utility property in a
sound physical and financial condition to render adequate and
efficient service. Rates and charges too low to meet these
requirements are unlawful.
(e) The board may recommend to the municipal legislative body
rates and charges sufficient to include a reasonable return on the
utility plant of the municipality.
(f) Rates and charges established under this section are subject to
the approval of:
(1) the municipal legislative body by ordinance; and
(2) the commission, in accordance with the procedures set forth
in 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 the
municipality if the legislative body so elects.
(g) Except for a municipally owned utility taxed under
IC 6-1.1-8-3, the commission shall approve rates and charges
sufficient to compensate the municipality for taxes that would be due
the municipality on the utility property were it privately owned.
These rates and charges in lieu of taxes may be transferred to the
municipal general fund, if the legislative body so elects.
(h) The commission shall grant a request that an increase in rates
and charges not be effective until after the occurrence of a future
event if the legislative body so requests.
(i) A municipality that acquires and operates a utility under
IC 8-1.5-2 by exercising the power of eminent domain may not
impose a special rate, charge, surcharge, or other fee, other than rates
and charges approved under this section or otherwise authorized by
law, on the customers of the utility in order to pay for the costs
associated with acquiring the utility through the exercise of the
power 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 water
utilities that have been taken out of the jurisdiction of the
commission for the approval of rates and charges.
(b) After the introduction of the ordinance establishing the rates
and charges under section 8 of this chapter, but before the ordinance
is finally adopted, the municipal legislative body shall hold a public
hearing at which users of the waterworks, owners of property served
or to be served by the waterworks, and other interested persons may
be heard concerning the proposed rates and charges. Notice of the
hearing, 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 through
IC 5-3-1-9);
(2) mailed to owners of vacant or unimproved property if the
ordinance includes a fee for water service to vacant or
unimproved property; and
(3) mailed to users of the waterworks located outside the
municipality's corporate boundaries.
The notice may be mailed in any form so long as the notice of
hearing is conspicuous. The hearing may be adjourned from time to
time.
(c) After the hearing, the municipal legislative body shall adopt
the ordinance establishing the rates and charges, either as originally
introduced or as modified. A copy of the schedule of rates and
charges adopted shall be kept on file and available for public
inspection in the offices of the board and the municipal clerk.
(d) The rates and charges established for any class of users or
property shall be extended to cover any additional property that is
subsequently served and falls within the same class, without any
hearing or notice.
(e) The municipal legislative body may change or readjust the
rates and charges in the same manner as they were established.
(f) Rates and charges collected under this chapter are considered
revenues 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 water
utilities that have been taken out of the jurisdiction of the
commission for the approval of rates and charges.
(b) Owners of property connected or to be connected to and
served by the waterworks authorized under this chapter may file a
written petition objecting to the rates and charges of the waterworks
so long as:
(1) the petition contains the names and addresses of the
petitioners;
(2) the petitioners attended the public hearing provided under
section 8.1 of this chapter;
(3) the written petition is filed with the municipal legislative
body within five (5) days after the ordinance establishing the
rates and charges is adopted under section 8.1 of this chapter;
and
(4) the written petition states specifically the ground or grounds
of objection.
(c) Unless the objecting petition is abandoned, the municipal clerk
shall file in the office of the clerk of the circuit or superior court of
the county a copy of the rate ordinance or ordinances together with
the petition. The court shall then set the matter for hearing at the
earliest date possible, which must be within twenty (20) days after
the filing of the petition with the court. The court shall send notice
of the hearing by certified mail to the municipality and to the first
signer of the petition at the address shown on the petition. All
interested parties shall appear in the court without further notice, and
the municipality may not conduct any further proceedings concerning
the rates and charges until the matters presented by the petition have
been heard and determined by the court.
(d) At the discretion and upon direction of the court, the
petitioners shall file with the petition a bond in the sum and with the
security fixed by the court. The bond must be conditioned on the
petitioners' payment of all or part of the costs of the hearing and any
damages awarded to the municipality if the petition is denied, as
ordered by the court.
(e) Upon the date fixed in the notice, the court shall, without a
jury, hear the evidence produced. The court may confirm the
decision of the municipal legislative body or sustain the objecting
petition. The order of the court is final and conclusive upon all
parties to the proceeding and parties who might have appeared at the
hearing, subject only to the right of direct appeal. All questions that
were presented or might have been presented are considered to have
been adjudicated by the order of the court, and no collateral attack
upon the decision of the municipal legislative body or order of the
court is permitted.
(f) If the court sustains the petition, or if the petition is sustained
on appeal, the municipal legislative body shall set the rates and
charges 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 of
rates and charges; procedure
Sec. 9. (a) This subsection applies to a municipally owned utility
that before June 1, 1987, was taken out of the jurisdiction of the
commission for the approval of rates and charges. A utility to which
this subsection applies is removed from the jurisdiction of the
commission for approval of the issuance of stocks, bonds, notes, or
other evidence of indebtedness.
(b) Except as provided in subsection (a), a municipal legislative
body that wants to be taken out of the jurisdiction of the commission
for approval of rates and charges and of the issuance of stocks,
bonds, notes, or other evidence of indebtedness may submit the
following public question to the registered voters of the municipality
at the next election in the form prescribed by IC 3-10-9-4:
"Shall the municipally owned utility be taken out of the
jurisdiction of the utility regulatory commission for approval of
rates and charges and of the issuance of stocks, bonds, notes, or
other evidence of indebtedness?".
(c) A municipal legislative body shall certify the public question
to the county election board of the county that contains the greatest
percentage of population of the municipality under IC 3-10-9-3 and
submit the question under subsection (b) if it receives a petition that:
(1) is signed by at least the number of the registered voters of
the municipality required under IC 3-8-6-3 to place a candidate
on the ballot; and
(2) requests that the municipally owned utility be removed from
the jurisdiction of the commission for approval of rates and
charges and of the issuance of stocks, bonds, notes, or other
evidence of indebtedness.
(d) If a majority of those voting favor taking the municipally
owned utility out of the jurisdiction of the commission, the utility:
(1) is removed from the jurisdiction of the commission for
approval 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 commission
jurisdiction to the commission within thirty (30) days after the
utility'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 of
rates, charges, and evidences of indebtedness; alternative
procedure
Sec. 9.1. (a) This section applies to the following:
(1) Water utilities that are owned or operated by second class
cities.
(2) Third class cities.
(3) Towns.
(b) In addition to section 9 of this chapter, a municipally owned
utility to which this section applies may be removed from the
jurisdiction of the commission for the approval of rates and charges
and of the issuance of stocks, bonds, notes, or other evidence of
indebtedness, if the municipal legislative body adopts an ordinance
removing the utility from commission jurisdiction. The municipal
legislative body shall, at least thirty (30) days before the final vote on
the ordinance, mail written notice of the meeting to all ratepayers of
the utility and to the commission. For a second class city the
municipal legislative body must hold two (2) public meetings before
the final vote on an ordinance removing the utility from commission
jurisdiction may be adopted. An explanation of the removal process
must be provided at each public meeting under this section. Each
public 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 shall
be submitted to the registered voters of the municipality if, within the
sixty (60) day period described in subsection (c), the legislative body
receives a petition:
(1) that is signed by at least the number of the registered voters
of the municipality required under IC 3-8-6-3 to place a
candidate on the ballot; and
(2) that requests the legislative body to submit the question of
removal from commission jurisdiction to the registered voters
of the municipality at the next election.
The municipal legislative body shall certify the public question in
subsection (e) to the county election board of the county that
contains the greatest percentage of population of the municipality
under IC 3-10-9-3.
(e) If the legislative body receives a petition described in
subsection (d) in the proper form, the legislative body shall submit
the following public question to the registered voters of the
municipality at the next election in the form prescribed by
IC 3-10-9-4:
"Shall the municipally owned utility be taken out of the
jurisdiction of the Indiana utility regulatory commission for the
approval 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 to
the commission at least ten (10) days before the date of the election.
(f) If a majority of those voting on the question described in
subsection (e) favor taking the municipally owned utility out of the
jurisdiction of the commission, the utility is removed from the
jurisdiction of the commission for approval of rates and charges and
of the issuance of stocks, bonds, notes, or other evidences of
indebtedness.
(g) If the legislative body receives a petition in proper form under
subsection (d), the ordinance does not take effect until after removal
is approved by a majority of those voting. If a majority of those
voting vote against removal, the utility remains under the jurisdiction
of the commission and the ordinance does not take effect.
(h) In addition to the notice required by subsection (b), if the
municipal legislative body adopts the ordinance, described in
subsection (b), the municipal legislative body shall mail written
notice of the withdrawal from commission jurisdiction to the
commission within thirty (30) days after the ordinance becomes
effective.
(i) Notwithstanding this section or section 9 of this chapter, the
commission may require a municipally owned utility that generates
electric power to provide information to the permanent forecasting
group under IC 8-1-8.5-3.5.
(j) This section does not affect the obligations of a municipally
owned 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 utilities
that are withdrawn from commission jurisdiction under section 9 of
this chapter, including a municipally owned utility described in
section 9(a) of this chapter.
(b) A municipal legislative body that wants to return a
municipally owned utility to the jurisdiction of the commission for
approval of rates and charges and of the issuance of stocks, bonds,
notes, or other evidence of indebtedness may submit the following
public question to the registered voters of the municipality at the next
election in the form prescribed by IC 3-10-9-4:
"Shall the municipally owned utility be returned to the
jurisdiction of the utility regulatory commission for approval of
rates and charges and of the issuance of stocks, bonds, notes, or
other evidence of indebtedness?".
(c) A municipal legislative body shall certify the public question
to the county election board of the county that contains the greatest
percentage of population of the municipality under IC 3-10-9-3. The
county 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 of
the municipality required under IC 3-8-6-3 to place a candidate
on the ballot; and
(2) requests that the municipally owned utility be returned to
the jurisdiction of the commission for approval of rates and
charges and of the issuance of stocks, bonds, notes, or other
evidence of indebtedness.
(d) If a majority of those voting favor returning the municipally
owned utility to the jurisdiction of the commission, the utility is
returned to the jurisdiction of the commission for approval of rates
and charges and of the issuance of stocks, bonds, notes, or other
evidence of indebtedness. If a majority of those voting disapprove of
returning the municipally owned utility to the jurisdiction of the
commission, an election may not be conducted on the public question
of returning to the jurisdiction of the commission for four (4) years
from the date of the last election on that public question.
(e) The public question of returning to the jurisdiction of the
commission may not be submitted to the registered voters of the
municipality at an election conducted within four (4) years after the
date the municipally owned utility was last withdrawn from
commission jurisdiction.
(f) If a municipally owned utility is returned to the jurisdiction of
the commission under this section, the municipal legislative body
shall 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 removal
under alternative procedure
Sec. 9.6. (a) This section applies to municipally owned utilities
that are withdrawn from commission jurisdiction under section 9.1
of this chapter.
(b) The municipal legislative body may adopt an ordinance
returning the municipally owned utility to the jurisdiction of the
commission for the approval of rates and charges and of the issuance
of stocks, bonds, notes, or other evidence of indebtedness if it
receives a petition:
(1) that is signed by at least the number of the registered voters
of the municipality required under IC 3-8-6-3 to place a
candidate on the ballot; and
(2) that requests the legislative body to adopt an ordinance
returning the municipally owned utility to the jurisdiction of the
commission.
If the municipal legislative body fails to adopt an ordinance under
this subsection within ninety (90) days after receipt of the petition,
a petition requesting the adoption of an ordinance to return to
commission jurisdiction may not be submitted for four (4) years from
the date the last petition was submitted under this subsection.
(c) If the municipal legislative body fails to adopt the ordinance
described in subsection (b) within ninety (90) days after receipt of
the petition, the public question of the return to commission
jurisdiction shall be submitted to the registered voters of the
municipality if the legislative body receives a second petition:
(1) that is signed by at least the number of the registered voters
of the municipality required under IC 3-8-6-3 to place a
candidate on the ballot;
(2) that requests the legislative body to submit the question of
the return to commission jurisdiction to the registered voters of
the municipality at the next election; and
(3) that is submitted to the legislative body after the expiration
of the ninety (90) day period described in this subsection.
The municipal legislative body shall certify the public question
described in subsection (d) to the county election board of the county
that contains the greatest percentage of population of the
municipality under IC 3-10-9-3.
(d) If the legislative body receives a petition described in
subsection (c) in the proper form, the legislative body shall submit
the following public question to the registered voters of the
municipality at the next election in the form prescribed by
IC 3-10-9-4:
"Shall the municipally owned utility be returned to the
jurisdiction of the utility regulatory commission for the
approval 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 to
the commission at least ten (10) days before the date of the election.
(e) If a majority of those voting on the question described in
subsection (d) favor returning the municipally owned utility to the
jurisdiction of the commission, the utility is returned to the
jurisdiction of the commission for approval of rates and charges and
of the issuance of stocks, bonds, notes, or other evidence of
indebtedness. If a majority of those voting disapprove of returning
the municipally owned utility to the jurisdiction of the commission,
an election may not be conducted on the public question of returning
to the jurisdiction of the commission for four (4) years from the date
of the last election on that public question.
(f) The public question of returning to the jurisdiction of the
commission may not be submitted to the registered voters of the
municipality at an election conducted within four (4) years after the
date the municipally owned utility was last withdrawn from
commission jurisdiction. In addition, a petition requesting the
adoption of an ordinance under subsection (b) may not be submitted
within four (4) years after the date the municipally owned utility was
last withdrawn from commission jurisdiction.
(g) If a municipally owned utility is returned to commission
jurisdiction under this section, the municipal legislative body shall
mail 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 that
provides service outside the corporate boundaries of the
municipality, the charges for service outside the corporate
boundaries may not differ from the charges for service inside the
corporate boundaries unless the utility clearly demonstrates
significant cost factors that make different charges
nondiscriminatory, 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 owned
utility shall be kept by the municipal fiscal officer as separate funds
as required by any bond ordinance or accounting procedures
established by the commission or the state board of accounts. The
municipal legislative body, with the approval of the board, may
transfer surplus earnings of the utility to the general fund. The money
may not, however, be transferred unless the terms and conditions of
any 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 carried
on the records of the utility or utilities by providing for monthly
contributions or transfers to the cash reserve fund of surplus earnings
of the utility or utilities.
(c) "Surplus earnings" are those cash earnings remaining after
provision 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 body
may include in the municipal general fund budget, as revenue in lieu
of taxes, an amount equal to the actual balance in the cash reserve
fund as of June 30 of the current year. However, the available cash
reserve fund balance may be transferred to the municipal general
fund only during the calendar year for which the budget was adopted,
and transfers may not be made from any utility funds to the general
fund except from the cash reserve fund.
(e) If at any time after the final approval of the budget an
emergency should arise for further appropriations from the general
fund, the legislative body may, by ordinance, transfer additional
money from the cash reserve fund to the general fund to provide for
the additional appropriations, the transfer to be limited to the
accretions to the cash reserve fund since the preceding June 30.
(f) A cash reserve fund, if authorized by ordinance, may be used
to make loans to another utility owned by the same municipality, for
periods not to exceed five (5) years, at any interest rate. The
repayment of the loan and interest shall be returned to the cash
reserve 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 on
amount
Sec. 12. (a) A municipality may, by ordinance of its legislative
body, borrow money from a utility owned by the municipality for any
of the following purposes:
(1) Current purposes in anticipation of taxes levied and to be
collected during the current or following year.
(2) Carrying out an eligible efficiency project (as defined in
IC 36-9-41-1.5) within the municipality.
(b) The board may by resolution lend money to the municipality
if the utility has on hand:
(1) a surplus of cash exceeding by at least the amount loaned
the sum of all amounts required to pay the indebtedness of the
utility falling due during the current calendar year and the
following year;
(2) the amount necessary to meet current expenses during the
year; and
(3) the amount necessary to pay for improvements contemplated
to be made during the current calendar year minus the estimated
receipts during the calendar year.
(c) A loan made under subsection (a)(1) may not be made for a
sum in excess of fifty percent (50%) of the amount estimated to be
collected 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 the
payment of anticipated taxes, in the case of a loan made
under 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 loan
made 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 money
of 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 of
the commission for approval of rates and charges and of the issuance
of stocks, bonds, notes, or other evidence of indebtedness shall file
with the commission an annual report of the operation of the plant on
forms prescribed by the commission. The annual reports shall be kept
in the office of the commission as a public record. A municipally
owned utility that has withdrawn from commission jurisdiction under
IC 8-1-2-100 (before its repeal on January 1, 1983) or section 9 or
9.1 of this chapter is not required to file the annual report required by
this section.
(b) The state board of accounts shall examine all accounts of
every municipally owned utility at regular intervals. In the
examination, 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 the
utilities examined.
The examination shall be made without notice, and its cost shall be
paid 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 and
powers conferred by IC 8-1-11.1-3.1, notwithstanding section 1 of
this chapter. As added by Acts 1982, P.L.74, SEC.1.
