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1069~ ~ .~' ~ '~ ORDINANCE N0. .1069 AN ORDINANCE TO ESTABLISH A PUBLIC UTILITY COMMISSION FOR THE CITY OF WEST MEMPHIS, ARKANSAS, CONSISTING OF SEVEN (7) MEMBERS, DEFINING THEIR DUTIES AND PROVIDING THEIR AUTHORITY TO OPERATE, MANAGE, AND CONTROL THE WEST MEMPHIS UTILITY DEPARTMENT, AND DECLARING AN EMERGENCY. L BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF WEST MEMPHIS, ARKANSAS: SECTION 1. Creation. There is hereby created a West Memphis Utility Commission, hereinafter called, "The Commission", consisting of seven (7) resident qualified electors who shall be experienced in some type of business management. SECTION 2. Appointment. Members of "The Commission" shall be nominated by any member of ~ihe City Council and elected by a majority vote of such governing body. SECTION 3. Terms. "The Commission Members" shall be r t elected for two (2) year terms; and, each with the right of succession upon the expiration of their respective terms. Their successors shall be appointed or reappointed as provided in SECTION 2 above. Vacancies by death, resignation, or other reasons may be filled as provided for in the original selection. SECTION 4. Quorum. Four (4) members of "The Commission" shall constitute a quorum for transaction of business. SECTION 5. Compensation. The Commissioners shall be paid $150.00 monthly for their services and shall be paid for such expense which might occur while away from home conducting commission business. No Commissioner shall receive pay who does not attend a regular meeting of the Utility Commission. SECTION 6. Meeting. The regular meeting date of "The Commission" shall be the Second Thursday of each month at such times as "The Commission" may designate. Special Call Meetings shall be held as often as necessary to conduct special business of "The Commission". 1. ti• SECTION 7. Removal. The Commissioners shall be removed l for cause by two-thirds (2/3) vote of the City Council or the failure to attend two (2) regular successive meetings of "The Commission" without reason satisfactory to "The Commission". SECTION 8. Powers. "The Commission" shall have the authority and power to employ Engineers, Auditors, Consultants, and other experts where the need and occasion arises. Likewise, "The Commission" shall have the authority to manage, operate, improve, recommend salaries, establish policies, and to extend the facilities of the Utility Department. Their powers are not limited to, but include the purchase of electric current, contracting for the purchase of supplies necessary for current operation, letting and opening bids; and, all other necessary things essential for their operation, providing any purchase over Twenty-Five Thousand Dollars ($25,000.00) is confirmed by the City Council. SECTION 9. City Attorney. The City Attorney shall be the City Attorney for "The Commission" and custodian of all legal documents of "The Commission". When additional legal assistance is required by "The Commission" it must be approved by a majority vote of "The Commission". The City Attorney shall recommend Counsel desired. SECTION 10. Financial Director. The Financial Director for the City of West Memphis shall be the Financial Director for "The Commission" and perform such duties as "The Commission" may direct. SECTION 11. Rates. "The Commission" shall have the authority to recommend the rates for the electric and water rates after two (2) Public Hearings. The Date, Place, and Time of the Public Meeting shall be at the discretion of "The Commission" provided there shall be fourteen (14) days before the Second Meeting. The City Council shall have final authority for rates. SECTION 12. Payment in Lieu of Taxes. There shall be paid to the City of West Memphis General Fund by "The Commission" in lieu of taxes, a sum not more than the amount a private utility 2. I~ ~ . Y L would pay for the privilege of operating such utility within a city, an annual sum of five per cent (5%) of the gross revenue for the franchise charge, the sum to be payable one-twelfth (1/12) at the end of each month. SECTION 13. General Manager. "The Commission" shall have the authority to employ a General Manager who shall have the responsibility for the employment and regulation of all employees of "The Commission" subject to the policies established by "The Commission". SECTION 14. Reports. The City Council shall receive a report, monthly, on the financial affairs of "The Commission" and such other reports as may be requested from time to time. SECTION 15. Oath. Before entering upon the duties of "The Commission" each member shall take the oath prescribed by the Arkansas Constitution, Article 1, Section 20. SECTION 16. Officers of the Board. "The Commission" shall elect a Chairman and Vice Chairman who shall be elected annually. "The Commission Chairman" or "Vice Chairman" shall preside at all meetings. SECTION 17. Disposition of Revenue. The Revenue received each year from utility operations. before being used for any other purpose, shall be used by "The Commission" for the following purposes in the order named: A. Payment of all operating expenses. B. Payment of all current bonded indebtedness of the City where revenues have been pledged; not limited to, but including Depreciation Fund; and, any other fund specifically designated by law. C. For the payment to the City General Fund, one-twelfth. (1/12) each month, a sum not more than five per cent (5%) of the Gross Revenue. 3. . . • SECTION 18. This Commission sYiall take office subject to any previous contracts for bonds or notes, purchase of supplies, and services performed, all of which are re-adopted and confirmed by the members of the new commission. SECTION 19. All Ordinances or Parts of Ordinances in conflict herewith are hereby repealed. SECTION 20. It having been found and determined by~the City Council of the City of West Memphis, Arkansas, that there is an immediate need to revise the Utility'Commission, an emergency is declared to exist, and this Ordinance being necessary to protect the safety, health and welfare of the Citizens of West Memphis, Arkansas, shall become effective upon its passage and approval. PASSED AND APPROVED this _`~ day of , 1981. CE-MAYOR nmmL+~m . SPONSORED BY: Robert Bentley Curtis Dalton Larry Shelton Gary Walker i ~~ ~~~~.~ ~ ~ ~~~, 4~ ~ 1 ~1 ~ ~ ", Vie` ~'"~.`~ ~ 7~ ~98'~ ~. ~' ,;r T0: West Pdemphis City Council FROM: Mayor Joyce T. Ferguson SUBJECT: Mayor's Veto of Ordinance No. 1068 and Ordinance No. 1069 In accordance with the procedures established in Arkansas Statutes 19-1014, I am herein filing my written statement concerning my veto of Ordinance No. 1068 and Ordinance No. 1069, which was adopted by the City Council of West Memphis on t~tay 21, 1981, and filing this with the office of the City Clerk prior to the next regular meeting of the City Council. I have vetoed Ordinance No. 1068 which abolishes the present West Memphis Utility Commission, in order to prevent the existence of a void in the operations of the utilities, until such time as the legal questions concerning Ordinance No. 1069 can be resolved. I have vetoed Ordinance No. 1069, adopted by the City Council on Thursday, May 21, 1981, for the reason that serious que_st~:szns have been raised concerning the validity of certain sections of the Ordinance. The following explanation is given as my reasons for vetoing Ordinance No. 1069: The City of West Memphis is a municipal corporation and authorized and created as set forth in the Arkansas Constitution, as per Article 12, Section 3, which states: "CITIES AND TOWNS - ORGANIZATION UNDER GENERAL LAWS. - The General Assembly shall provide, by general laws, for the organization of cities (which may be classified) and incorporated towns, and restrict their power of taxation, assessment, borrowing money and contracting debts, so as to prevent the abuse of such power." Cities cannot pass laws or ordinances contrary to the general laws of the State as per Article 12, Section 4 which states: "LIMITATION ON LEGISLATIVE AND TAXING POWER - LOCAL BOND ISSUES. - No municipal corporation shall be author- ized to pass any law contrary to the general laws of the State." The enabling Statutes for the Constitution with reference to municipal corporations are contained in Sections 19-2301. The enabling legislation grants to municipalities specific powers subject to the rules and restrictions of the enabling Statutes - 19-2302 reads: "All municipal corporations organized or to be organized under the provisions of this Act, shall have general powers and privileges, and be sub- ject to the rules and restrictions of this Act prescribed." This Act specifically grants the power to municipalities to furnish sewer services as stated in 19-2313, which reads: "They (municipal corporations) shall have power.....to open and con- struct and keep in order and repair sewers and drains;....." water supplies and stated in 19-2317, which reads: "They (municipal corporations) shall have power to provide a supply of water by construction or acquiring.....; to regulate ~- Page 2-----Mayor's Veto Message on Ordinance No. 1068 and Ordinance 1069 the same;...." and electrical power to its residents as set forth in 19-2318 which reads: "They (municipal corporations) shall have power.... to furnish power to consumers, or to purchase such power, gas or electricity for such purposes from any individual, company or corporation manufacturing the same, and in connection wherewith furnish lights and power to private consumers upon just compensation therefore;". The power granted to a municipality concerning sewers is to "open and construct and keep in order and repair sewers and drains". The power granted to a municipality concerning water is to "provide a supply of water.....; and to re- gulate the same;". The Statute concerning electrical power grants to the City the "power to provide for or construct or acquire works....or to furnish power to consumers, or to purchase such power, gas or electricity for such purposes...., and in connection therewith to furnish lights and power to private consumers upon just compensation;...". In order to carry into effect or discharging the powers or duties conferred upon it, a municipal corporation is granted the power to make ordinances which are "not inconsistent with the laws of the State", as per Ark. Statute 19-2401, which reads: "Municipal corporations shall have the power to make and publish, from time to time, bylaws or ordinances, not inconsistent with the laws of the state, for carrying into effect or discharging the powers or duties conferred by the provisions of this Act...". The Arkansas General Assembly has enacted laws con- cerning the operation of a sewer system and the operation of a waterworks supply. It has not enacted laws concerning the operation of the electrical utilities, ex- cept in the form of commissions. As far as the operations by the City of the sewage system, they must comply with the provisions of Ark Statutes 19-4101-4130 which reads: "The construction, acquisition, improvement, equipment, custody, operation and maintenance of any such works for the collection, treatment or disposal of sewage and the collection of revenue therefrom for the service rendered thereby, shall be effected and supervised by a committee to be designated for such purpose by the municipal council; which committee, however, will act under the control of the council to such an extent as may be provided in the ordinance and resolution appointing the committee." With regard to the operations of a water- works and water supply system by the City, it must comply with the provisions of Arkansas Statutes Sec. 19-4201, which reads: ".......Municipalities are authorized to purchase and/or construct such waterworks system or any intrical part thereof and to purchase and hold title to, lease or rent in connection therewith any land, lake, watercourse or water supply, either inside or outside the limits of the county in which the municipality is located.........A municipality constructing such a ~ ~• '~/epli Page 3-----Mayor's Veto message on Ordinance No. 1068 and Ordinance N. 1069 waterworks system or intrical part thereof may sell the water to private consumers located inside and outside of said municipality...." Ark. Statute 19-4202.1 "DEFINITIONS. Definitions of terms used in this Act are as follows: (a) The term "operating authority" as used herein is defined to mean either the City Council, legislative body or board of commissioner, whichever, in a given ' instance, shall be charged with the responsibility of operating the municipal waterworks system. (b) ............ (c) The term "operation and maintenance" as used herein, and in all other Acts relating to municipally owned waterworks system, is defined as including, among other items of operation and maintenance, taxes, improvements, extensions and additions to the waterworks system." In 1953 the Arkansas General Assembly enacted Act No. 562 which authorized a commission to operate municipally owned water, sewer and/or light plants in cities of the first class, as per Ark. Statutes 19-4051 19-4060, which reads: "Hereafter a city of the first class may, by the enactment of an ordinance or ordinances, create a commission or commissions to operate, control and supervise such of its municipally owned water, sewer and/or light plants as may be prescribed by an ordinance or ordinances which are not now being operated by a commission or commissions created by or pursuant to valid, special or local acts of the Arkansas Ligislature.......". The original Utility Commission of the City of West Memphis was set up by ordinance under the provision of this Act. In 1957 the General Assembly enacted Act No. 115, Arkansas Statute 19-4061, which reads: "Any city of the first class owning and operating either a waterworks and distribution system or electrical light plant and system, or both, for a period of at least ten (10) years prior to the passage of this Act, which system or systems were built by the municipality or an improvement district, may by appropriate action by its city council create a commission for the pu~:pose of operating and managing such waterworks and distribution system or electrical light plant and system or both;.......". This Act may have superseded Act 562 of 1953. The Ordinance passed by the City Council on May 21, 1981, attempting to establish a public utility commission for the City of [4est Memphis, does not comply with the Arkansas law establishing a "commission" for the operation of public utilities, nor does it comply with the Statutes governing the operations of the waterworks system and sewer system by the City. In addition, it grants to the body, legis- lative functions which cannot be delegated by the City Council. Although the City i,.,i: ~. l .Page 4--------Mayor's Veto message on Ordinance No. 1068 and Ordinance No. 1069 Council can delegate ministerial, administrative or executive powers, it cannot delegate legislative matters properly resting in the judgment and discretion of the Council. (Adams v Bryant, Ark. 370 S.W.2d 432). The Ordinance appears to be defective with regard to the following matters: 1. The terms of the members of the agency must coincide with the terms of the City Council, as they are agents of the City Council. Under Sec. 3 of the Ordi- nance, the terms of the commission would commence upon the appointment by the City Council under Sec. 2. 2. The "commission" has been delegated the authority and power to determine the need for certain individuals. In my opinion, the determination of the "need" for the employment of certain types of individuals is a legislative function of the City Council. The City Council should determine the need, number and type of individuals, and it can delegate to the "Commission" the responsibility to hire such an individual. Under the powers of Section 8, the "commission" has also been delegated the authority to establish policies, extend the facilities and make certain purchases for supplies. The establishment of policies and extension of the facilities are a proper function of the City Council. With regard to the letting of bids, the City Council cannot delegate this authority to such a commission. The conduct of the fiscal affairs of the City are governed by Arkansas Statutes 19-4401 through 19-4433. Arkansas Statute 19-4425 provides that the Mayor, or her duly authorized representative, shall have exclusive power and responsibility to make purchases of all supplies. In addition, it requires competitive bidding for all sums in excess of $2,000.00. The Mayor can designate a representative to act for her, but it cannot be in an ordinance, since this is a discretionary act on the part of the Mayor. The authorization of such representative may be with- drawn at any time and cannot be delegated such as is attempted in the ordinance. Although the Arkansas General Assembly in 1971 enacted additional powers to cities of the first class concerning "municipal affairs", as set forth in 19-1042, which reads: "Any city of the first class is hereby authorized to perform any function and exercise full legislative power in any and all matter of whatsoever nature pertaining to its municipal affairs, including, but not limited to, the power to tax." Ark Stat. 19-1043 states: "For the purpose of this Act, the term "municipal affairs" means all matter and affairs of government germain to, affecting or concerning the municipality or its government, except the following which are state affairs and subject to the general laws of the State of Arkansas: ....uniform requirements for competitive bidding on contracts;...hours, vacation, holidays and other fringe benefits of employees; the definition, use and control ~ ~ Page 5--- Mayor's Veto Message on Ordinance No. 1068 and Ordinance No. 1069 surplus revenues of municically owned utilities;....provided that the municipality may exercise any function or legislative power upon the foregoing state affairs if not in conflict with state laws." It expressly prohibits cities of the first class to enact an ordinance which did not follow the "uniform requirements for competitive bidding on contracts;....the definition, use and control of surplus revenues of municipally owned utilities;". Sections 12 and 17 of Ordinance 1069 violates this law. It appears that the City of West Memphis can choose between either operating the utilities as a commission or operating the utilities under the control of the City Council and the authorized committees. If the utilities should operate as a commission, then the City might be qualified to come under either Act 562 of 1953 or Act No. 115 of 1957, according to an interpretation of the word "built" which appears in Act No. 115 of 1957. The City purchased its utility system in 1941. Since that time, it has been enlarged, and if the system is interpreted under such situation as having been "built" by the municipality, then Act 115 of 1957 would apply. If it is interpreted that this Act only applies to municipalities which actually "built" their system, either by the municipality or an improvement district, then it would not apply to the City of West Memphis, since the City of West Memphis "purchased" its original utility systems. Based upon such an inter- pretation, then an ordinance could be enacted creating a commission like the one which was originally established in 1954. It would have the authority to supervise and control the water, sewer and light plants of the City. It should be noted that Act No. 115 of 1957 only provides for a commission to operate the water system and electrical system only. Therefore, it would still be necessary to establish a sewer committee as provided by Ark. Stats., Sec. 19-4101. Sec. 19-4102 provides that the operation and maintenance of a sewer system in a city, "shall be effected and supervised by a committee to be designated for such purpose by the municipal council;" The Statutes concerning the waterworks provides that the "operating authority" may mean either the City Council, legislative body or a board of commissioners, whichever shall be charged with the responsibility of operating the municipal waterworks system. The applicable Statutes should be examined in order to determine the extent of the authority for both of these committees. Since there is no statutory provision for the operations of an electrical system by a committee, only ministerial and administrative acts may be delegated by the City Council to such a committee if it is established. The legislative functions and decisions concerning the operations of the electrical system must remain with the City Council. ~~ Page 6---Mayor's Veto message on Ordinance No. 1068 and Ordinance 1069 I feel that Ordinance No. 1069, which was passed by the City Council on May 21, 1981, is in conflict with State Statutes, which have been listed above, and therefore, I feel that said ordinance is invalid. T(/ FERGUSON, MAYOR OF THE/C~TY OF WEST MEMPHIS, ARKANSAS ~~~/~~ L