COMMITTEE SUBSTITUTE
FOR
Senate Bill No. 266
(By Senator Tomblin, Mr. President)
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[Originating in the Committee on the Judiciary;
reported March 27, 1997.]
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A BILL to amend and reenact sections three, four, seven and
twenty-five, article thirteen-a, chapter sixteen of the code
of West Virginia, one thousand nine hundred thirty-one, as
amended, all relating to the public service commission;
allowing for the appointment of five public service district
board members in consolidated or merged public service
districts; requiring public service districts to notify the
public service commission when a new board member is
appointed; authorizing the county commission to determine
public service district board members' compensation for
regular and special board meetings; requiring public service
districts to notify the public service commission if the
district changes its corporate name; raising the amount of
allowable expenditure before having to advertise for bids
from five thousand dollars to ten thousand dollars for
public service districts; and providing for a waiver of public service commission approval of contracts for
engineering, design or feasibility studies under certain
conditions.
Be it enacted by the Legislature of West Virginia:
That sections three, four, seven and twenty-five, article
thirteen-a, chapter sixteen of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, be amended and
reenacted, all to read as follows:
ARTICLE 13A. PUBLIC SERVICE DISTRICTS FOR WATER, SEWERAGE AND
GAS SERVICES.
§16-13A-3. District to be a public corporation and political
subdivision; powers thereof; public service boards.
From and after the date of the adoption of the order
creating any public service district, it is a public corporation
and political subdivision of the state, but without any power to
levy or collect ad valorem taxes. Each district may acquire, own
and hold property, both real and personal, in its corporate name,
and may sue, may be sued, may adopt an official seal and may
enter into contracts necessary or incidental to its purposes,
including contracts with any city, incorporated town or other
municipal corporation located within or without its boundaries
for furnishing wholesale supply of water for the distribution
system of the city, town or other municipal corporation, and
contract for the operation, maintenance, servicing, repair and
extension of any properties owned by it or for the operation and improvement or extension by the district of all or any part of
the existing municipally owned public service properties of any
city, incorporated town or other municipal corporation included
within the district:
Provided, That no contract shall extend
beyond a maximum of forty years, but provisions may be included
therein for a renewal or successive renewals thereof and shall
conform to and comply with the rights of the holders of any
outstanding bonds issued by the municipalities for the public
service properties.
The powers of each public service district shall be vested
in and exercised by a public service board consisting of not less
than three members, who shall be persons residing within the
district, who possess certain educational, business or work
experience which will be conducive to operating a public service
district. Each board member shall, within six months of taking
office, successfully complete the training program to be
established and administered by the public service commission in
conjunction with the division of environmental protection and the
bureau of public health. Board members shall not be or become
pecuniarily interested, directly or indirectly, in the proceeds
of any contract or service, or in furnishing any supplies or
materials to the district nor shall a former board member be
hired by the district in any capacity within a minimum of twelve
months after
such board member's term has expired or such board
member has resigned from the district board. The members shall be appointed in the following manner:
Each city, incorporated town or other municipal corporation
having a population of more than three thousand but less than
eighteen thousand is entitled to appoint one member of the board,
and each
such city, incorporated town or other municipal
corporation having a population in excess of eighteen thousand
shall be entitled to appoint one additional member of the board
for each additional eighteen thousand population. The members of
the board representing such cities, incorporated towns or other
municipal corporations shall be residents thereof and shall be
appointed by a resolution of the governing bodies thereof and
upon the filing of a certified copy or copies of the resolution
or resolutions in the office of the clerk of the county
commission which entered the order creating the district, the
persons so appointed become members of the board without any
further act or proceedings. If the number of members of the
board so appointed by the governing bodies of cities,
incorporated towns or other municipal corporations included in
the district equals or exceeds three, then no further members
shall be appointed to the board and the members so appointed are
the board of the district
except in cases of merger or
consolidation where the number of board members may equal five.
If no city, incorporated town or other municipal corporation
having a population of more than three thousand is included
within the district, then the county commission which entered the order creating the district shall appoint three members of the
board, who are persons residing within the district, which three
members become members of the board of the district without any
further act or proceedings
except in cases of merger or
consolidation where the number of board members may equal five.
If the number of members of the board appointed by the
governing bodies of cities, incorporated towns or other municipal
corporations included within the district is less than three,
then the county commission which entered the order creating the
district shall appoint such additional member or members of the
board, who are persons residing within the district, as is
necessary to make the number of members of the board equal three
except in cases of merger or consolidation where the number of
board members may equal five, and the member or members appointed
by the governing bodies of the cities, incorporated towns or
other municipal corporations included within the district and the
additional member or members appointed by the county commission
as aforesaid, are the board of the district. A person may serve
as a member of the board in one or more public service districts.
The population of any city, incorporated town or other
municipal corporation, for the purpose of determining the number
of members of the board, if any, to be appointed by the governing
body or bodies thereof, is the population stated for such city,
incorporated town or other municipal corporation in the last
official federal census.
Notwithstanding any provision of this code to the contrary,
whenever a district is consolidated or merged pursuant to section
two of this article, the terms of office of the existing board
members shall end on the effective date of the merger or
consolidation. The county commission shall appoint a new board
according to rules promulgated by the public service commission.
Whenever districts are consolidated or merged no provision of
this code prohibits the expansion of membership on the new board
to five.
The respective terms of office of the members of the first
board shall be fixed by the county commission and shall be as
equally divided as may be, that is approximately one third of the
members for a term of two years, a like number for a term of four
years, the term of the remaining member or members for six
years,
from the first day of the month during which the appointments are
made. The first members of the board appointed as aforesaid
shall meet at the office of the clerk of the county commission
which entered the order creating the district as soon as
practicable after the appointments and shall qualify by taking an
oath of office:
Provided, That any member or members of the
board may be removed from their respective office as provided in
section three-a of this article.
Any vacancy shall be filled for the unexpired term within
thirty days, otherwise successor members of the board shall be
appointed for terms of six years and the terms of office shall continue until successors have been appointed and qualified. All
successor members shall be appointed in the same manner as the
member succeeded was appointed.
The district shall provide to
the public service commission, within thirty days of the
appointment, the following information: The new board member's
name, home address, home and office phone numbers, date of
appointment, length of term, who the new member replaces and if
the new appointee has previously served on the board. The public
service commission shall notify each new board member of the
legal obligation to attend training as prescribed in this
section.
The board shall organize within thirty days following the
first appointments and annually thereafter at its first meeting
after the first day of January of each year by selecting one of
its members to serve as chair and by appointing a secretary and
a treasurer who need not be members of the board. The secretary
shall keep a record of all proceedings of the board which shall
be available for inspection as other public records. Duplicate
records shall be filed with the county commission and shall
include the minutes of all board meetings. The treasurer is
lawful custodian of all funds of the public service district and
shall pay same out on orders authorized or approved by the board.
The secretary and treasurer shall perform other duties
appertaining to the affairs of the district and shall receive
salaries as shall be prescribed by the board. The treasurer shall furnish bond in an amount to be fixed by the board for the
use and benefit of the district.
The members of the board, and the chair, secretary and
treasurer thereof, shall make available to the county commission,
at all times, all of its books and records pertaining to the
district's operation, finances and affairs, for inspection and
audit. The board shall meet at least monthly.
§16-13A-4. Board chairman; members' compensation; procedure;
district name.
The chairman shall preside at all meetings of the board and
may vote as any other members of the board but if he should be
absent from any meeting, the remaining members may select a
temporary chairman and if the member selected as chairman resigns
as such or ceases for any reason to be a member of the board, the
board shall select one of its members as chairman to serve until
the next annual organization meeting. Salaries of each of its
board members
shall be as follows are to be determined by the
county commission in which the public service district is
located: Provided, That such salaries may not exceed the
following amounts: For districts with fewer than six hundred
customers, each board member
shall may receive
fifty seventy-five
dollars per attendance at regular monthly meetings and
thirty
fifty dollars per attendance at additional special meetings,
total salary not to exceed
nine fifteen hundred dollars per
annum; for districts with six hundred customers or more but fewer than two thousand customers, each board member
shall may receive
one hundred dollars per attendance at regular monthly meetings
and
fifty seventy-five dollars per attendance at additional
special meetings, total salary not to exceed
eighteen two
thousand five hundred
fifty dollars per annum;
and for districts
with two thousand customers or more, each board member
shall may
receive one hundred
twenty-five dollars per attendance at regular
monthly meetings and
fifty seventy-five dollars per attendance at
additional special meetings, total salary not to exceed three
thousand
seven hundred fifty dollars per annum;
and for districts
with four thousand or more customers, each board member may
receive one hundred fifty dollars per attendance at regular
monthly meetings and one hundred dollars per attendance at
additional special meetings, total salary not to exceed five
thousand four hundred dollars per annum. The public service
district shall certify the number of customers served to the
public service commission beginning on the first day of July, one
thousand nine hundred eighty-six, and continue each fiscal year
thereafter. Board members may be reimbursed for all reasonable
and necessary expenses actually incurred in the performance of
their duties as provided for by the rules
and regulations of the
board. The board shall by resolution determine its own rules of
procedure, fix the time and place of its meetings and the manner
in which special meetings may be called. Public notice of
meetings shall be given in accordance with section three, article nine-a, chapter six of this code. Emergency meetings may be
called as provided by said section. A majority of the members
constituting the board also constitute a quorum to do business.
The members of the board are not personally liable or responsible
for any obligations of the district or the board but are
answerable only for willful misconduct in the performance of
their duties. At any time prior to the issuance of bonds as
hereinafter provided, the board may by resolution change the
official or corporate name of the public service district and
such change shall be effective from and after filing an
authenticated copy of such resolution with the clerk of the
county commission of each county in which the territory embraced
within such district or any part thereof is located
and with the
public service commission. The official name of any district
created under the provisions of this article may contain the name
or names of any city, incorporated town or other municipal
corporation included therein or the name of any county or
counties in which it is located.
§16-13A-7. Acquisition and operation of district properties.
The board of such districts shall have the supervision and
control of all public service properties acquired or constructed
by the district, and shall have the power, and it shall be its
duty, to maintain, operate, extend and improve the same. All
contracts involving the expenditure by the district of more than
five ten thousand dollars for construction work or for the purchase of equipment and improvements, extensions or
replacements, shall be entered into only after notice inviting
bids shall have been published as a Class I legal advertisement
in compliance with the provision of article three, chapter fifty- nine of this code, and the publication area for such publication
shall be as specified in section two of this article in the
county or counties in which the district is located. The
publication shall not be less than ten days prior to the making
of any such contract. To the extent allowed by law, in-state
contractors shall be given first priority in awarding public
service district contracts. It shall be the duty of the board to
ensure that local in-state labor shall be utilized to the
greatest extent possible when hiring laborers for public service
district construction or maintenance repair jobs. It shall
further be the duty of the board to encourage contractors to use
American made products in their construction to the extent
possible. Any obligations incurred of any kind or character
shall not in any event constitute or be deemed an indebtedness
within the meaning of any of the provisions or limitations of the
constitution, but all such obligations shall be payable solely
and only out of revenues derived from the operation of the public
service properties of the district or from proceeds of bonds
issued as hereinafter provided. No continuing contract for the
purchase of materials or supplies or for furnishing the district
with electrical energy or power shall be entered into for a longer period than fifteen years.
§16-13A-25. Borrowing and bond issuance; procedure.
Notwithstanding any other provisions of this article to the
contrary, a public service district shall not borrow money, enter
into contracts for the provision of engineering, design or
feasibility studies, issue or contract to issue revenue bonds or
exercise any of the powers conferred by the provisions of section
thirteen, twenty or twenty-four of this article, without the
prior consent and approval of the public service commission.
The
public service commission may waive the provision of prior
consent and approval for entering into contracts for engineering,
design or feasibility studies pursuant to this section for good
cause shown which is evidenced by the public service district
filing a request for waiver of this section stated in a letter
directed to the commission with a brief description of the
project, evidence of compliance with chapter five-g of this code,
and further explanation of ability to evaluate their own
engineering contract, including, but not limited to: (1)
Experience with the same engineering firm in the past two years
requiring engineering services; or (2) completion of a
construction project within the past two years requiring
engineering services. The district shall also forward an
executed copy of the engineering contract to the commission after
receiving approval of the waiver. Unless the properties to be
constructed or acquired represent ordinary extensions or repairs of existing systems in the usual course of business, a public
service district must first obtain a certificate of public
convenience and necessity from the public service commission in
accordance with the provisions of chapter twenty-four of this
code, when a public service district is seeking to acquire or
construct public service property.
Thirty days prior to making formal application for the
certificate, the public service district shall prefile with the
public service commission its plans and supporting information
for the project and shall publish a Class II legal advertisement
in a newspaper or newspapers of general circulation in each city,
incorporated town or municipal corporation if available in the
public service district, which legal advertisement shall state:
(a) The amount of money to be borrowed, or the amount of
revenue bonds to be issued:
Provided, That if the amount is an
estimate, the notice may be stated in terms of an amount "not to
exceed" a specific amount;
(b) The interest rate and terms of the loan or bonds:
Provided, That if the interest rate is an estimate, the notice
may be stated in terms of a rate "not to exceed" a specific rate;
(c) The public service properties to be acquired or
constructed, and the cost of the public service properties;
(d) The anticipated rates which will be charged by the
public service district:
Provided, That if the rates are an
estimate, the notice may be stated in terms of rates "not to exceed" a specific rate; and
(e) The date that the formal application for a certificate
of public convenience and necessity is to be filed with the
public service commission. The public service commission may
grant its consent and approval for the certificate, or any other
request for approval under this section, subject to such terms
and conditions as may be necessary for the protection of the
public interest, pursuant to the provisions of chapter
twenty-four of this code, or may withhold such consent and
approval for the protection of the public interest.
In the event of disapproval, the reasons for the disapproval
shall be assigned in writing by the commission.
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(NOTE: The purpose of this bill is to allow five public
service board members to be appointed in consolidated or merged
districts, require public service districts to notify the public
service commission when a new board member is appointed, allow
the county commission to determine public service district board
member compensation for meetings, require public service
districts to notify the public service commission if they change
their name, raise the amount of allowable expenditure without
public service districts having to solicit bids, and provide for
a waiver of public service commission approval of contracts for
engineering, design or feasibility studies if certain conditions
are met.
Strike-throughs indicate language that would be stricken
from the present law and underscoring indicates new language that
would be added.)