Utility Commission to withdraw from city umbrella

Nita Johnson, The Sentinel Echo, London, Ky.
·3 min read

Jul. 28—The London Utility Commission, which has operated under the City of London's government umbrella, will be the next entity to withdraw from the city's rule and operate independently.

In a letter dated July 8, 2022, the Department of Local Government has given the London Utility Commission until July 1, 2023, to become fully compliant with state law by becoming an SPGE (Special Purpose Government Entity).

In a letter dated July 8, the DLG addressed the response of the LUC regarding their claim that becoming an SPGE is "voluntary." The city utility commission has operated under the umbrella of the city; however, the DLG stated in that letter that the utility commission fits the description of an SPGE and must comply with state law.

An SPGE, according to the letter, is outlined in Kentucky Revised Statute 65A.010, Section 9 as:

(a) Special purpose governmental entity, or entity, means any agency, authority or entity created and authorized by statute which: 1. Exercises less than statewide jurisdiction; 2. Exists for the purpose of providing one (1) or a limited number of services or functions; 3. Is governed by a board, council, commission, committee, authority or corporation with policy-making authority that is separate from the state and the governing body of the city, county or cities and counties in which it operates; and 4. a. Has the independent authority to generate public funds, or b. May receive and expand public funds, grants, awards, or appropriations from the state, from any agency, or authority of the state, from a city or county, or from any other special purpose governmental agency.'

Public service agencies that supply water, water conservation, sanitation, sewer, waste management and solid waste services are among those listed that qualify as an SPGE.

The DLG responded to the utility commission's claim that it does operate with less than statewide jurisdiction, but states the commission is governed by a commission that makes policies and is separate from the city.

The DLG contradicts the LUC reference in a June 10, 2022 that the commission "is governed by the Mayor and City Council" by citing City of London Ordinance 2007-07 that "the London Utility Commission shall be responsible for the policy and guidelines for the operation of the London Utility Commission."

The letter further states that the claim by the utility commission that it does not have authority to generate public funds because state and federal grants as well as State Revolving Funds must be authorized by the Mayor. The DLG disagrees, stating the utility commission does receive and expend public funds, grants, awards or appropriations from the city. It cites several agreements between the Kentucky Infrastructure Authority that were sent through the City of London on behalf of the LUC. Meetings from city council meetings show that a representative from the utility commission presented information to the city council on projects. Invoices, progress reports and other documentation was then sent to the KIA by the utility commission.

The London Utility Commission sets its own budget, thus confirming the DLG's claim that it is functioning in the same manner as other SPGEs despite claiming in a response to the DLG that it is included in the city's budget. That again contradicts the city ordinance approved when the LUC was established.

"The DLG determines that the London Utility Commission is a Special Purpose Governmental Entity as defined by KRS 65A.010(9). As a result, the LUC shall start reporting to DLG beginning with the upcoming fiscal year."

This action reflects the same action taken by the City of London Tourism to become separate from the city government, setting its own budget and handling its own employees, finances, and operations without reporting to the city and approving its own actions by its commission.