Tuesday, July 19, 2016
County Proposal Requests State Legislature to Make Law Change Regarding Utility District Consolidations
At the July 26th Regular Session meeting of the Lawrence County Board of Commissioners, a proposal will be considered that asks State Representatives Doss and Byrd as well as State Senator Joey Hensley, to sponsor a repeal of a recent law change that deals with the consolidation of utility districts in the State of Tennessee.
The proposal, which is co-sponsored by commissioners Wayne Yocom, Bobby Clifton, Chris Jackson, Nathan Keeton and Scott Franks, deals specifically with Tennessee Code Annotated 7-82-704. The law, which was revised in 2015, gives the State considerably more authority in pushing utility district consolidations across the state.
Specifically, the law states:
In the event the utility management review board determines that such a consolidation is in the best interest of the public being served by the utility district and the utility management review board is able to negotiate an agreement among all affected parties for the consolidation, the utility management review board shall enter an order approving the consolidation agreement and shall require the utility district to enter into the consolidation agreement.
If the utility management review board determines that the utility district, any other utility district, municipal utility system or county utility system with whom the utility district may consolidate, or any other affected party, has refused or failed to enter into good faith negotiations on a consolidation, then the utility management review board shall petition the chancery court in a jurisdiction in which the utility district is operating to require the party or parties to engage in good faith negotiations concerning a consolidation.
In the event the board of commissioners of the utility district does not enter into the approved consolidation agreement or fails to abide by the terms and conditions of the consolidation agreement, then the utility management review board shall petition the chancery court in a jurisdiction in which the utility district is operating to enforce the utility management review board's order to require the board of commissioners to enter into the approved consolidation agreement and to abide by and implement all of the terms and conditions of the consolidation agreement.
The issue is relevant locally as the State Comptroller's Office has pushed for a consolidation between the City of St. Joseph and the Iron City Utility District since 2015. The State has suggested the two entities consolidate because of Iron City's financially distressed status which is caused in large part to having too few customers. However, in April of this year, the City of St. Joseph officially announced their wishes not to consolidate with the Iron City Utility District at the current time.
In June, officials with City of St. Joseph, received a letter from the State saying pursuant to Tennessee Code Annotated 7-82-704, they were initiating consolidation negotiations between the City of St. Joseph and the Iron City Utility District later this year. By law, if the State feels St. Joseph has not negotiated in "good faith", they can then petition chancery court to approve the merger, despite St. Joseph's opposition to the consolidation. Local officials worry that language is too open for interpretation and could cede too much power to the State.
"We are not opposed to consolidations in general," says Commissioner Wayne Yocom. “What we are opposed to are forced and unfriendly consolidations where the State pushes a consolidation on an entity that doesn’t want to consolidate,” he added.
Others see the law as an overreach by the State. "It's big government overreach," says Commissioner Chris Jackson. "It's a sad day when the decisions of duly elected representatives of a city can be overruled by bureaucrats in Nashville. If the State can give itself this kind of authority, what's next," asked Jackson.
"More than anything, we want to let Representatives Doss and Byrd and Senator Hensley know we fully support and respect the independence of each municipality or public utility district along representatives, to make their own decisions regarding any consolidations that may be proposed," added Commissioner Nathan Keeton.
Commissioners will address this proposal along with several others at their meeting next Tuesday. The meeting will start at 5:00 PM and is open to the public.
