TN Code § 7-82-307 (2021)
2021 Tennessee Code|Title 7 - Consolidated Governments and Local Governmental Functions and Entities|Chapter 82 - Utility District Law of 1937|Part 3 - Operation and Powers|§ 7-82-307. Commissioners — Numbers — Terms — Vacancies — Election of Commissioners

   Each utility district shall have three (3) commissioners, except those multi-county utility districts and utility districts having a greater number of commissioners on May 6, 2004.    Each utility district shall select board members using the selection method set forth in subdivisions (a)(4) or (a)(5).   The commissioners of any single-county utility district using a selection method other than appointment by a county mayor as provided in subdivision (a)(4) on May 6, 2004, shall be appointed by the county mayor unless, on July 1, 2011, or hereafter approved by the general assembly, the selection method used by a single-county utility district is a plurality vote of customers of the utility district voting in an election held by the utility district or the single-county district is located in a county with a metropolitan form of government and the selection method is by appointment by a county probate judge.   No later than July 1, 2014, vacancies occurring in multi-county utility districts shall be as provided in subdivision (a)(5) or subsection (h), unless, on July 1, 2011, or hereafter approved by the general assembly, the selection method used by a multi-county utility district is a plurality vote of customers of the utility district voting in an election held by the utility district or the multi-county district is located in a county with a metropolitan form of government and the selection method is by appointment by a county probate judge.     The term of office of each commissioner shall be four (4) years after the initial appointment by the county mayor to create staggered terms, except for replacement commissioners filling unexpired terms. Each member, upon expiration of such member's term, shall continue to hold office until a successor is appointed or elected and qualified.   Vacancies on the board of commissioners of single-county utility districts shall be filled by appointment of the county mayor. Within sixty (60) days after the occurrence of a vacancy in the office of any commissioner caused by death, resignation, disability, or forfeiture of office, and no later than thirty (30) days prior to the expiration of the term of office of any incumbent commissioner, the board of commissioners or its remaining members shall select three (3) nominees to fill such office, in full accordance with any residential requirements that may apply to the office vacated or to be vacated, and under the seal of the board of commissioners, shall certify such list of nominees in order of preference recommended by such commissioners, to the county mayor of the county in which the utility district or its principal office is located; or of the county in which the commissioners of the district customarily meet if the district has no principal office. Within twenty-one (21) days after the issuance of any certification by the board of commissioners to the county mayor, the county mayor may enter an order either appointing one (1) of the nominees or rejecting the entire list or may refrain from taking any action, in which event the first name on the list of nominees shall be deemed appointed to fill the vacancy or new term by operation of law. Any order either appointing or rejecting a list of nominees shall be entered of record on the minutes of the county legislative body and a certified copy of the order shall be furnished to the board of commissioners and to the appointee; provided, however, that upon the rejection of any entire list of nominees by the county mayor, the board of commissioners shall, to the extent authorized in this subdivision (a)(4), submit a new non-identical list or lists of three (3) nominees to the county mayor within sixty (60) days after the date of the written request to the board of commissioners or its remaining members to submit an additional list as required in subdivision (a)(6). If the county mayor enters an order rejecting the third list of nominees within twenty-one (21) days after the submission of the third list of nominees, then the county legislative body shall appoint a commissioner from any of the three (3) lists of nominees previously submitted to the county mayor to fill the vacancy at the meeting of the county legislative body in which the mayor's order rejecting the third list of nominees is entered of record on the minutes of the county legislative body.    Effective July 1, 2014, and thereafter, unless, on July 1, 2011, or hereafter approved by the general assembly, the selection method used by a multi-county utility district is a plurality vote of customers of the utility district voting in an election held by the board of commissioners of the utility district, the procedure as provided in subdivision (a)(4) for submitting nominees to the county mayor to fill a vacancy shall be followed by the board of commissioners of multi-county utility districts for the filling of vacancies occurring on the board of commissioners of such multi-county utility district, except that, the utility district's charter, bylaws, state law or prior order creating or recreating such utility district board of commissioners shall be followed to determine which county mayor is the appropriate county mayor to fill the vacancy. In certifying the list of nominees to the appropriate county mayor, the board of commissioners shall send copies of the certification to the county mayor of every county which is a part of the multi-county utility district. The original certification shall include a statement listing all counties to which copies of the certification shall be furnished to the county mayors.   As provided in its charter, bylaws, state law or prior order creating or recreating the multi-county utility district, if an appointee to the board of commissioners rotates between or among the counties which are included in the multi-county utility district, then the appropriate county mayor to make the appointment shall be the county mayor in the next rotation for the appointment. If a vacancy must be filled for an unexpired term, the county mayor which made the original appointment for that commissioner shall be the appropriate county mayor to fill the appointment for the unexpired term.   Except for the appointment of the commissioner which is a rotating appointment, in all multi-county utility districts, the appointee shall be a resident of the same county as the appointee's predecessor.     If the first or second list is rejected in its entirety, then within fourteen (14) days following the entry of the order rejecting the entire list of nominees, the county mayor shall make a written request to the board of commissioners or its remaining members to submit an additional list in accordance with subdivision (a)(4) or (a)(5).   The method of filling vacancies set forth in subdivisions (a)(2), (4) and (5) is the uniform method created by the legislature for the filling of vacancies on a utility district board of commissioners. It is the legislature's intent to create a uniform general law of statewide application for selecting utility district commissioners.   At least two (2) weeks prior to the board meeting at which the board of commissioners intends to select three (3) nominees to certify to the county mayor or county mayors to fill an existing vacancy or upcoming vacancy on the utility district’s board of commissioners under subdivisions (a)(4) and (5), the utility district shall notify its customers in writing of the board’s intent to select three (3) nominees to certify to the county mayor or county mayors at such board meeting and shall invite its customers to submit the names of qualified persons to be considered for nomination to fill the vacancy. The notice shall be:  Mailed to the district’s customers by including the notice on the customer’s bill or by a separate insert with the customer’s bill;   Mailed to the district’s customers by including the notice in a general mailing to its customers or by a separate insert with a general mailing to its customers; or   Published in a newspaper of general circulation in the county or counties in which the utility district is created or recreated.     Notwithstanding any law to the contrary, the board of commissioners of a utility district excepted by subdivision (a)(2) from the uniform method created by the legislature for the filling of vacancies may, by resolution, choose to change its present method of selection to appointment by a county mayor or mayors under subdivision (a)(4) or (a)(5). Upon the filing of a certified copy of the resolution with the utility management review board, the board shall enter an order either approving or disapproving the resolution. The board shall approve the resolution upon finding that a change in the method of filling vacancies to appointment by a county mayor under subdivision (a)(4) or (a)(5) is in the best interest of the utility district and its customers. All vacancies on the utility district's board of commissioners that occur after the entry of an order approving the resolution shall be by appointment by a county mayor under subdivision (a)(4) or (a)(5). If the board enters an order disapproving the resolution, then the utility district's method of filling vacancies shall remain unchanged, and the utility district shall continue to fill vacancies under the method the utility district has been using before the adoption of the resolution.       Upon the petition of at least twenty percent (20%) of the customers of a utility district to the utility management review board requesting the removal of a member or members of the utility district board of commissioners, the board shall conduct a contested case hearing on the question of whether such member or members should be removed from office and a new member or members appointed or elected. To be considered by the board, the customer or customers initiating the petition must file a letter of intent to compile and file the petition with the board before the petition is signed. All signatures of customers on the petition must have been obtained within ninety (90) days of the date the notice of intent to compile and file petition is filed with the board. The petition must contain the genuine signatures of the customers of the utility district. All information submitted in the petition must be legible. Each customer signing the petition shall include the address at which the customer receives utility service and the date the customer signed the petition. Upon receipt of the petition, the board shall verify the names and addresses of the signers of the petition to ensure that they are bona fide customers of the utility district and to ensure that all signatures have been obtained within ninety (90) days of the date the notice of intent to compile and file petition is filed with the board. As used in this subdivision (b)(1), “customer” means a person who receives a bill for utility services and pays money for such services. Each utility account shall be entitled to one (1) signature, but no person shall sign the petition more than once. Only one petition to remove a utility district commissioner under this section can be filed in any twelve-month period.   Upon filing the petition as provided in this subdivision (b)(1), the petitioners shall also file a cash bond or attorney or corporate surety bond in the sum of three hundred fifty dollars ($350); the bond being made payable to the state of Tennessee. Such bond shall be for the costs of hearing and processing the petition. The bond may be refunded if the utility management review board determines that the member or members of the utility district board of commissioners that are the subject of the petition should be removed; in such instance the cost of the hearing shall be assessed against the district. The administrative judge may assess additional costs against either the petitioners or the district, in accordance with this subdivision (b)(1)(B), to cover the total cost of the hearing.   For purposes of this subdivision (b)(1), “genuine signatures” means written, original signatures and excludes facsimile and electronic signatures of any kind.      If the comptroller of the treasury investigates or conducts an audit of a utility district, the comptroller shall forward to the utility management review board any published investigative audit reports involving a utility district incorporated under this chapter. The board shall review those reports and may conduct a contested case hearing on the question of whether utility district commissioners should be removed from office for knowingly or willfully committing misconduct in office, knowingly or willfully neglecting to fulfill any duty imposed upon the member by law, or failing to fulfill the commissioner’s or commissioners’ fiduciary responsibility in the operation or oversight of the district.   If the board concludes the member or members of the utility district board of commissioners has knowingly or willfully committed misconduct in office or has knowingly or willfully neglected to perform any duty imposed upon such member by law, or failed to fulfill the commissioner’s or commissioners’ fiduciary responsibility in the operation or oversight of the district, then the board shall issue an order removing such member from office. Any vacancy on the board of commissioners shall then be filled by the selection method used by the utility district to fill vacancies; provided, that no member of the board of commissioners ousted by order of the board shall be eligible for reappointment, reelection, or to participate in either the nomination, appointment or election of new members by the board of commissioners.        If a utility district is under the jurisdiction of the utility management review board pursuant to § 7-82-701(a), then the utility management review board may initiate a contested case hearing on the question of whether a member or members of the board of commissioners of the utility district should be removed from office and a new member or members appointed or elected on the grounds that either:  The utility district failed to comply with an order of the utility management review board, which shall include failing to comply with an order concerning excessive water losses;   A member or members failed to fulfill the commissioner’s or commissioners’ fiduciary responsibility in the operation or oversight of the district; or   A member or members of the board of commissioners of the utility district committed misconduct in connection with such office or failed to perform any duty imposed by law on such office, including taking appropriate actions pursuant to § 7-82-709(b) to reduce water loss to an acceptable level as determined by the board.     Failure of a member to vote in favor of a rate structure prescribed by the utility management review board that has been adopted by the utility district does not in itself constitute grounds for removal.     If the utility management review board concludes a member or members of the board of commissioners of the utility district should be removed from office for failure to comply with an order of the utility management review board or should be removed from office for committing misconduct in connection with such office or failing to perform any duty imposed by law, then the utility management review board shall issue an order removing such member or members from office. Any vacancy on the board of commissioners shall then be filled by the selection method used by the utility district to fill vacancies; provided, that no member of the board of commissioners ousted by order of the utility management review board shall be eligible for reappointment or reelection or shall participate in either the nomination, appointment or election of new members by the board of commissioners.   This subdivision (b)(3) shall not be construed as limiting any civil or criminal liability of any such member of the board of commissioners or the applicability of the ouster law, compiled in title 8, chapter 47.     When the member of a utility district board of commissioners is absent from four (4) consecutive regular board meetings or from one half (½) or more of the regular board meetings in a calendar year, the utility district shall report such absenteeism in writing to the county mayor of the county in which the utility district commissioner resides or is a customer and to the county mayor of the county in which the utility district's principal office is located, if different. The utility district's written report of absenteeism shall be sent to the county mayor or mayors within thirty (30) days after:  The fourth consecutive unattended board meeting; or   The end of the calendar year in which one half (½) or more of the regular board meetings were not attended, with a copy of such written report sent to the utility district commissioner, all such reports to be sent by certified mail.     A utility district commissioner who fails to meet the training and continuing education requirements set forth in § 7-82-308 before the end of the commissioner's term of office or before the end of any extension approved by the comptroller of the treasury or the comptroller's designee shall not be eligible for reappointment or reelection to another term of office. For the purposes of this subdivision (b)(5), the continuing education period used to determine whether a utility district commissioner has met the training and continuing education requirements set forth in § 7-82-308 shall be the last full continuing education period before the utility district commissioner's term of office ends.   As used in this subsection (b):  “Failing to fulfill a commissioner's fiduciary responsibility” includes, but is not limited to, an action where a utility district commissioner derives a personal benefit from the underlying misconduct, breach of duty, or failure in the operation or oversight of the utility district; and   “Fiduciary responsibility” means a responsibility to act with:   The highest degree of honesty and loyalty towards a utility district and in the best interests of the utility district; and   The utmost good faith for the benefit of the utility district when exercising the duties, powers, and authority enumerated in this chapter.         When the utility management review board reviews the audited annual financial report and operations of a financially distressed utility district pursuant to § 7-82-703, and the utility district fills vacancies on its board of commissioners by a method other than appointment by a county mayor or mayors, the board may elect to hold a public hearing on the issue of whether the method of filling vacancies on the district's board should be changed. If the board elects to hold a public hearing, then the board shall conduct a contested case hearing on this issue. If the board finds that it is in the best interest of the public served by the utility district that the method of filling vacancies on the utility district's board be changed, then the board shall enter an order that provides that all future vacancies on the utility district board shall be filled by appointment of the county mayor or mayors pursuant to the procedures set forth in subdivisions (a)(4) and (5).   Notwithstanding this section to the contrary, if a utility district board of commissioners fails to undertake the necessary actions as prescribed in this section to provide for the appointment or election of a new commissioner to take office upon the expiration of a term or fill a vacancy that may occur for any reason within the period of time set forth in this section, then the county mayor of the county in which such utility district was incorporated shall have the power and responsibility to make an interim appointment to such board of commissioners until such time as the proper actions required pursuant to this section have been undertaken.   In implementing this section, the appointing and electing authorities that fill vacancies on utility district boards of commissioners shall give due consideration to the need for racial, gender, age and ethnic minority diversity on utility district boards of commissioners.   Immediately upon indictment for misconduct in office, the indicted utility district commissioner shall be suspended from office pending the final disposition of the criminal proceeding or until the expiration of the commissioner's term of office, whichever occurs first. While suspended, an indicted commissioner shall be ineligible to receive any payments or benefits as provided in § 7-82-308(a). In a single county utility district, the county mayor of that county shall have the power and responsibility to make an interim appointment to fill the vacancy created by the suspension from office. In a multi-county utility district, the county mayor of the county in which the indicted utility district commissioner resides or is a customer shall have the power and responsibility to make an interim appointment to fill the vacancy created by the suspension from office. If the criminal proceeding against the suspended utility district commissioner has not terminated by the expiration of the term, the office will be considered vacant and be filled as provided by law. If the criminal proceeding is terminated with a finding or verdict of guilty on any of the charges on which the commissioner was indicted, then the suspension shall be made permanent, the office will be considered vacant, and the interim appointee shall serve until the office is filled as provided by law. If the criminal proceeding against the suspended utility district commissioner related to the indictment for misconduct in office is terminated by any finding, adjudication or deferral of the proceedings, including a not guilty verdict or a dismissal on the merit, the suspension of the utility district commissioner shall be removed, and the commissioner shall become eligible to serve the commissioner's office; simultaneously the county mayor's interim appointee shall cease to hold office.    Notwithstanding this section or any other law to the contrary, any water utility district having less than one thousand six hundred (1,600) customers in any county having a population of not less than thirty-nine thousand nine hundred (39,900) nor more than forty thousand (40,000), according to the 2000 federal census or any subsequent federal census, shall be governed by a five-member board of utility district commissioners. No person shall be eligible for appointment as utility district commissioner unless the person is a customer of the utility district and resides within the service area of the utility district. As used in this subdivision (g)(1), “customer” means a person who is regularly billed for utility service rendered by the district and who pays money for such service.   The regular term of office of each utility district commissioner shall be four (4) years. In order to establish staggered terms on the board, the three (3) incumbent commissioners serving on May 24, 2004, shall each serve an initial term of four (4) years, commencing on May 24, 2004. Thereafter, those three (3) offices shall be subject to appointment every four (4) years in accordance with the requirements and procedures set forth in this subsection (g). The initial term of office of each of the two (2) commissioners added by this subsection (g) shall be two (2) years, commencing on May 24, 2004, to be filled in accordance with the requirements and procedures set forth in this subsection (g). Thereafter, those two (2) offices shall be subject to appointment every four (4) years in accordance with the requirements and procedures set forth in this subsection (g). All unscheduled vacancies arising after May 24, 2004, shall be filled, for the remainder of the unexpired term, in accordance with the requirements and procedures set forth in this subsection (g).   Within sixty (60) days after the occurrence of any vacancy in the office of any utility district commissioner caused by death, resignation, disability, or forfeiture of office, and no later than sixty (60) days prior to the expiration of the term of office of any incumbent utility district commissioner, the board of utility district commissioners or its remaining members shall select three (3) qualified nominees to fill such office for the remainder of the term or for the full term, as the case may be, and, under the seal of the board of commissioners, shall certify such list of nominees in order of preference recommended by such commissioners, to the county mayor. Within fourteen (14) days after issuance of certification by the board of commissioners to the county mayor, the county mayor shall enter an order either appointing one of the nominees or rejecting the entire list. If this or any subsequent list of nominees is not timely submitted to the county mayor, then the county mayor shall proceed to appoint a qualified person to serve on the board of utility commissioners. Any order either making an appointment or rejecting the entire list of nominees shall be entered of record on the minutes of the county legislative body, and a certified copy of the order shall be furnished to the board of utility district commissioners. However, if the entire list of nominees is rejected by the county mayor, then the board of commissioners shall select a second list consisting of three (3) other qualified nominees to fill such office and, under the seal of the board of commissioners, shall certify such second list of other nominees in order of preference recommended by such commissioners, to the county mayor within fourteen (14) days following entry of the order rejecting the first list of nominees. Within fourteen (14) days after the second issuance of certification by the board of utility district commissioners to the county mayor, the county mayor shall enter an order either appointing one of the nominees or rejecting the entire second list. Any order either making an appointment or rejecting the entire list of nominees shall be entered of record on the minutes of the county legislative body, and a certified copy of the order shall be furnished to the board of utility district commissioners. However, if the entire second list of nominees is rejected by the county mayor, then, within fourteen (14) days following entry of such order, the county mayor shall request the board of commissioners or its remaining members to submit the third and final list consisting of three (3) other qualified nominees to fill such office or, alternatively, the county mayor shall request the county legislative body to submit the third and final list consisting of three (3) other, qualified nominees to fill such office; provided, further, however, that prior to requesting a list of nominees from the county legislative body, the county mayor must file a written statement with the county legislative body setting forth the mayor's specific reasons for rejecting each of the six (6) nominees previously selected by the utility district board of commissioners or its remaining members. Such written statement shall constitute a public record and shall be available for public inspection. Within fourteen (14) days following such request, the board of utility district commissioners or the county legislative body shall select the final list consisting of three (3) other qualified nominees to fill such office and shall certify such list of additional nominees in order of preference recommended to the county mayor. Within fourteen (14) days following such certification, the county mayor shall enter an order either appointing one of the nominees or rejecting the entire final list. Any order either making an appointment or rejecting the entire list of nominees shall be entered of record on the minutes of the county legislative body, and a certified copy of the order shall be furnished to the board of utility district commissioners. If the county mayor rejects the entire final list, then the vacant, or to be vacated, office of utility district commissioner shall be filled by appointment by the county mayor without any further nominations.   In implementing this subsection (g), the nominating and appointing authorities shall give due consideration to the need for racial, gender, age and ethnic minority diversity on the utility district board of commissioners.   No later than January 31 of each calendar year, any water utility district subject to this subsection (g) shall notify the county mayor of the county that created the utility district, in writing, of the beginning and ending dates of the terms of office of each member of the utility district's board of commissioners in office on January 1 of each calendar year.      Notwithstanding this section or any other law to the contrary, the membership of the board of commissioners for any multi-county water utility district, whose principal office is located in, and whose present service area primarily lies within, the boundaries of any county having a population of not less than seventeen thousand four hundred (17,400) nor more than seventeen thousand four hundred fifty (17,450), according to the 2000 federal census or any subsequent federal census, and containing and physically divided by a United States government corps of engineers dam and reservoir project of thirty-four thousand (34,000) acres, shall be as provided in this subsection (h). On June 3, 2004, board membership from the county containing the principal office and the primary service area of such utility district shall be increased by two (2) members giving such county three (3) members on the board. The other two (2) counties within the service area having not less than one hundred fifty (150) customers shall be represented by one (1) board member from each such county and the two (2) present board members shall continue to serve on the board for the remainder of their terms and be appointed from such counties as otherwise provided by law.   The two (2) new members of the board of commissioners added pursuant to subdivision (h)(1) shall be filled by appointment of the county mayor of the county containing the principal office and the primary service area of such utility district. As soon as possible after June 3, 2004, the existing board of commissioners shall select three (3) nominees for each of such two (2) new members, in full accordance with any residential requirements that may apply to the office created, and under the seal of the board of commissioners, shall certify such lists of nominees to such county mayor. Within twenty-one (21) days after the issuance of certification by the board of commissioners to the county mayor, the county mayor may enter an order either appointing one of the nominees from each such list or rejecting one of the lists or both lists. Any order either appointing or rejecting a list of nominees shall be entered of record on the minutes of the county legislative body and a certified copy of the order shall be furnished to the board of commissioners and to the appointee; provided, however, that upon the rejection of any entire list of nominees by the county mayor, the board of commissioners shall continue to submit new nonidentical lists of three (3) nominees to the county mayor within sixty (60) days after each such rejection until such procedure shall result in the position being filled for the new term, as provided in this subdivision (h)(2). If the county mayor fails to make an appointment for a position from such list or lists following three (3) submissions for such position, then the county mayor shall appoint the director or directors for such position or positions, as the case may be, without any further nominations.   Notwithstanding this section or any other law to the contrary, within two (2) weeks after the occurrence of a vacancy in the office of any commissioner and no later than thirty (30) days prior to the scheduled expiration of the term of office of any incumbent commissioner, the board of commissioners or its remaining members shall select three (3) nominees to fill such office, in full accordance with residential requirements applicable to the office vacated or to be vacated, and, under the seal of the board of commissioners, shall certify such list of nominees to the county mayor of the county whose representation on the board shall be directly affected by the vacancy. Copies shall also be sent to the county mayors of the other two (2) counties. If all three (3) nominees are rejected by the mayor of the affected county, then the nominating process shall be repeated and repeated again, if necessary. Thereafter, without any further nominations, the county mayor shall appoint a person to fill such vacancy for the remainder of the term or for the next term of office.   No later than January 31 of each year, the chair of the board of commissioners shall certify the number of customers within each county and mail a list of customers from each such county to the appropriate county mayor.   Notwithstanding this section or any other law to the contrary, no contract entered into or renewed after June 3, 2004, for the sale of water to a water utility district described in subdivision (h)(1) shall, and it is against public policy for such a contract to, contain a clause that prohibits the district from lawfully selling water to other municipalities or governmental entities.