TAUD UTILITY LEADERSHIP CONFERENCE The Law for Commissioners: Ignorance Is No Excuse

UTILITY DISTRICT COMMISSIONERS SELECTION STATUTE -TENNESSEE CODE § Three Primary Methods: Appointment By County Mayor Election By Members of Utility District Board Elections By Customers of Utility District BEWARE! VARIATIONS EXIST

Potential Pitfalls in Filling Vacancies Using the Wrong Selection Process Using the Wrong Selection Process Failure To Certify To County Mayor Three Failure To Certify To County Mayor Three Nominees At Least 30 Days In Advance Nominees At Least 30 Days In Advance Not Properly Certifying The List “Under Seal Of Board of Commissioners” Not Properly Certifying The List “Under Seal Of Board of Commissioners” Not Involving All County Mayors In A Multi-County Utility District Not Involving All County Mayors In A Multi-County Utility District Failing To Strictly Follow Notice, Deadline And Other Provisions In Customer Elections Failing To Strictly Follow Notice, Deadline And Other Provisions In Customer Elections

UTILITY DISTRICT COMMISSIONER COMPENSATION Compensation Authorized By Statute Only TENNESSEE CODE § AND 309 TENNESSEE CODE § AND 309 Per Diem Payments Per Diem Payments - $ For Water and Sewer Districts - $ For Gas Utility Districts Group Medical and Life Insurance Group Medical and Life Insurance Reimbursement of Actual Expenses Incurred Reimbursement of Actual Expenses Incurred

RECEIPT OF OTHER COMPENSATION Demand to Repay the District Possible Ouster From Office Possible Criminal Prosecution – Tennessee Code §

TAKING AND FILING OATH OF OFFICE Article 10, Section 1 Of Tennessee Constitution Tennessee Code § to 114 Take Oath Before Undertaking Duties File With County Clerk Penalty For Failure to Do So?

Commissioner’s Authority To Act On Behalf Of Utility District Power Vested In Commissioners Power Vested In Commissioners Tennessee Code § Tennessee Code § Commissioners Must Act In Open Meetings Commissioners Must Act In Open Meetings Tennessee Code § – 201 Tennessee Code § – 201 Participation By Electronic Means Participation By Electronic Means Can Participate If Requirements Of Tennessee Can Participate If Requirements Of Tennessee Code § Followed Code § Followed

LEGAL DUTIES IMPOSED ON COMMISSIONERS Annual Reporting o Publication Of Information Including 1. Financial Condition Of District 2. Earnings Of District 3. Water Rates Charged 4. Methodology of Determining Rates o Filing of Annual Audit with County Mayor o Notification To Customers Of UMRB And Method Of Filling Vacancies On Board of Method Of Filling Vacancies On Board of Commissioners Commissioners

LEGAL DUTIES IMPOSED ON COMMISSIONERS Fraud Reporting  Local Government Instances Of Fraud Reporting Act Reporting Act Tennessee Code § – 505  Affirmative Duty To Report Fraud to Comptroller

LEGAL DUTIES IMPOSED ON COMMISSIONERS Code of Ethics Comprehensive Governmental Ethics Reform Act of 2006 Comprehensive Governmental Ethics Reform Act of 2006 Know How To Handle Ethics Complaint Know How To Handle Ethics Complaint

LEGAL DUTIES IMPOSED ON COMMISSIONERS Conflict Of Interest No Direct Interest In Contract With District No Direct Interest In Contract With District No Indirect Interest Unless Acknowledged No Indirect Interest Unless Acknowledged

LEGAL DUTIES IMPOSED ON COMMISSIONERS Approval Of Bill Adjustments Uniform Accounting Manual For Tennessee Utility Districts Uniform Accounting Manual For Tennessee Utility Districts - only legitimate adjustments - only legitimate adjustments - adjustments documented - adjustments documented Monitor Employee Pay and Payroll Adopt Payroll Policy Adopt Payroll Policy Adopt Pay Plan Adopt Pay Plan Review Benefits Packages To Ensure Compliance With Board Action Review Benefits Packages To Ensure Compliance With Board Action

LEGAL DUTIES IMPOSED ON COMMISSIONERS Ensure Adequate Separation Of Employee Duties No Complete Control Over Transactions No Complete Control Over Transactions Board Involvement? Board Involvement? Competitive Bidding Requirements Utility Districts Subject To Competitive Bidding Utility Districts Subject To Competitive Bidding Document Purchases And Any Exceptions Document Purchases And Any Exceptions

LEGAL DUTIES IMPOSED ON COMMISSIONERS Use Of Licensed Contractors Maintenance Of Minutes Use Of Utility Facilities For Personal Gain

QUESTIONS, COMMENTS & OTHER OBSERVATIONS