Sec. 3. (a) The board of directors for utilities shall have, within and outside such city as provided in this chapter, the exclusive government, management, regulation, and control of all public utilities consisting of any waterworks, gasworks, electric light works, heating and power plants of any kind or character, telephone and other systems of communication, and local transportation systems of any kind operated upon, above, or below any street or territory within the city, or outside the city within the limits authorized by law, and all property held by and relating or belonging thereto. Any of which public utilities any such city may acquire or construct for the service of the public as consumers, users, or patrons, and including any public utility and all property which such city may hold as trustee for the benefit of the inhabitants of such city. Such board of directors may furnish and sell service and products of and make all necessary construction, reconstruction, repairs, renewals, enlargements, extensions, or additions to any such plant or property of any such public utility so owned or at any time so held in trust, which in the judgment of the board of directors is desirable or necessary for the proper conduct of such business and the proper serving of the inhabitants of the city and adjacent, contiguous, or suburban communities or territory within the county wherein such city is situated and served, or reasonably capable of being served, in any manner by or with respect to any such utility.

     (b) The board of directors may lease any such utility property for a term not exceeding thirty-five (35) years to any person, partnership, limited liability company, or corporation, and without the approval of the commission, such lease to be upon such terms and conditions as the board may deem to be to the best interest of such city and the city’s inhabitants. No such lease shall be valid or effective until it has been approved by the board of trustees and duly ratified and approved by an ordinance of the city. The board and the city-county legislative body must each vote such approval by a two-thirds (2/3) vote of their total membership. In any such lease an option may be given to such lessee to extend the same for a period not to exceed ten (10) additional years.

     (c) In connection with the duties devolving upon such board of directors in the government, management, regulation, control, and operation of all such utilities, it may act as follows:

(1) To condemn, appropriate, lease, rent, purchase, and hold any real estate, rights-of-way, materials, or personal property within such city or within five (5) miles of the corporate limits of the city needed for the proper giving of service by any such utility to the inhabitants of the city and the community contiguous thereto and served from any such utility plant.

(2) To design, order, contract for, and construct any and all necessary or desirable extensions of or additions to any utility plant and property owned or so held in trust by the city, and to enter into all necessary contracts with reference thereto, and with reference to the purchase of materials and supplies needed for the operation of any such plant or plants, in accordance with such rules as may be adopted by such board of directors, and without the necessity of advertising for bids, or without such other restrictions as are imposed by any law of Indiana with reference to the letting of contracts for work, material, or supplies by municipal bodies or other governmental agencies.

(3) To sell any products or byproducts, and enter into executory contracts for the sale, to anyone whatsoever and without any restriction concerning the taking of bids therefor or otherwise.

(4) To operate any such plant or plants, to receive and collect all money due on account of such operation or otherwise relating to such plant or plants or business and in connection therewith to employ such managers, superintendents, assistant managers, assistant superintendents, engineers, attorneys, auditors, clerks, foremen, and other employees necessary for the proper carrying on and operation of any such utility plant or plants and the business and to fix the compensation of all such employees. No contract of employment shall be made for a longer fixed period than four (4) years. However, a contract of employment may be extended or renewed from time to time thereafter. The directors may elect from their membership an executive committee consisting of not more than three (3), who may be assigned to the supervision of any one (1) or more of such utilities and who shall, in the intervals between the meetings of the directors, exercise all the powers and duties of the directors, all of their acts to be subject, however, to the approval of the directors, and to fix any such additional compensation to the members of the executive committee, in addition to their salaries as directors, as shall be reasonable. The additional compensation shall be fixed by a resolution of the directors entered of record at the time of the appointment of the executive committee. Whenever any such city shall acquire, hold, own, or so hold in trust for the city’s inhabitants more than one (1) such public utility and the property of the city, such board of directors shall have power to select additional executive committees from their membership in the same manner and with the same power as the executive committee first selected, which committee may be assigned by such board to any such utilities deemed necessary. In the selection of employees, other than managers, superintendents, assistant managers, assistant superintendents, engineers, attorneys, and auditors, the board of directors shall provide for a merit system of employment to be determined by competitive examination, except as to unskilled and common laborers, in which political, religious, or other personal affiliations may not be considered. In selecting managers the directors shall consider character, training, and general expert and executive fitness and experience for the position in the particular utility to which such manager is to be assigned, as the necessary requirements for appointment.

(5) To rent such offices and other real estate and property for the conduct of the business of such utility or utilities as may be deemed needful and enter into contracts with reference to the rental and use of the offices, real estate, and property. No such contract shall be made for a longer period than ten (10) years.

(6) In the event there be an open mortgage upon any utility property acquired by any such city, either in absolute ownership or in trust, by the terms of which mortgage additional bonds may be taken down from the trustee under such mortgage to meet in whole or in part the cost of extensions and improvements to the mortgaged property, the board of directors may perform all things necessary in order to secure the benefit of such mortgage provisions and to enable the escrow bonds held by the trustee under any such mortgage to be taken down and sold in order to defray the cost of any extensions and betterments to such property and to sell any such bonds so taken down for the purpose of assisting in defraying the costs of any such extensions or betterments to such property.

(7) To take over, adopt, and assume the performance of the provisions of any lease under which any utility property may be held at the time of the acquisition of any utility by any such city, either in absolute ownership or in trust and to take any and all steps necessary to perform and fulfill the terms of any such lease, and to obtain and preserve the benefits from the lease. In the event there be any outstanding open mortgage upon the property covered by such lease so taken over under the provisions of which bonds may be withdrawn from the trustee under such mortgage for the purpose of paying all or part of the cost of additions to the property covered by such mortgage, to do all things necessary in order to secure the benefit of such mortgage provisions and to enable the escrow bonds held by the trustee under any such mortgage to be taken down and sold in order to defray the cost of any extensions and betterments to such leased property and to sell any such bonds so taken down for the purpose of assisting in defraying the costs of any such extensions or betterments to such leased property.

(8) To preserve the corporate organization of any company engaged in the mining of coal, or any other commercial or manufacturing business, the stock of which may be owned by any utility whose property and assets may be taken over by any such city, either in absolute ownership or in trust and in connection with the taking of the property by the city to cause the stock of any such company to be issued in the name of the board of directors for utilities except as to qualifying shares for directors and to cause such qualifying shares to be issued in the names of such individuals as the board of directors may name and to vote any such stock for the election of directors, who may be members of such board of trustees for utilities. However, no member of such board of directors shall receive any compensation, directly or indirectly, as a director, officer, or employee of any such company, other than the compensation provided in this chapter as a member of the board of directors for utilities. Through the control thus given of any company, the board of directors for utilities shall be authorized to do all things necessary to cause any such coal mining company or other company efficiently to carry on its operations and to conduct its business in the same manner as if its stocks were owned by private individuals.

(9) To adopt rules for service and rates for service in connection with the furnishing of any public utility service by the city to consumers, users, or patrons. However, any such rules and rates for service shall be in effect only after the rules and rates have been filed with and approved by the commission and such approval shall be granted by the commission only after notice of hearing and hearing as provided by IC 8-1-1 and IC 8-1-2, and only after determining compliance of the rates of service with IC 8-1.5-3-8 and IC 8-1.5-3-10 and only after determining compliance of the rules of service with IC 8-1-1 and IC 8-1-2, along with the rules and standards of service for municipal utilities of Indiana approved by the commission.

(10) To take over all contracts and rights of any kind or character, and to fulfill and perform all obligations relating to the property and business of any utility company whose property may be taken over by any such city, either in absolute ownership or in trust.

(11) To make all rules and bylaws customary in private corporations for their own conduct of business and necessary for the proper government and supervision of the utilities under their control. Any such rules and bylaws shall be subject to the approval of the board of trustees.

[Pre-Local Government Recodification Citation: 19-3-24-3.]

As added by Acts 1981, P.L.11, SEC.43. Amended by P.L.23-1988, SEC.42; P.L.3-1989, SEC.57; P.L.8-1993, SEC.122.