City Officials Legal Handbook: 2019 Edition

The Kentucky League of Cities serves as the united voice of cities by supporting community innovation, effective leadership and quality governance.

KLC’s Core Values serve as the cultural foundation of the organization. They embody the spirit and collective conscience of KLC and its employees. Our core values describe how we fulfill our mission by representing the enduring ideals and principles that guide all of our actions.

We believe:

Kentucky’s cities play an essential role in shaping the future of the Commonwealth.

Local decisions are best made at the local level.

Our exceptional services and products help cities function effectively and enhance the quality of life within communities.

Building and cultivating relationships with governments, organizations, and individuals furthers the mission of KLC.

We embrace:

Customer service based on attentive listening and measured by timely and appropriate responses.

Credibility built on a commitment to high ethical standards, accountability, competence, and nonpartisanship.

Teamwork and continuous learning that drives improvement and innovation.

Caring and mutual respect that fosters a supportive working environment.

For additional copies of this Handbook, please contact the Kentucky League of Cities at 1-800-876-4552 or visit www.klc.org.

About this Handbook

Some city officials learn the hard way that good intentions are not enough. Lawmakers and courts have created a tangled web of dos and don’ts for elected and appointed officials. Whether you are a mayor, legislative body member, city attorney, or city manager, you have to find a way to navigate the legal maze to serve your citizens.

Fortunately, you have the basis for what you need to know in your hands. The City Officials Legal Handbook represents a portion of the training and education you will need to help you understand your role as a city official. Each chapter breaks down complicated legal issues into plain language to provide the most important information to you. While the legal Handbook is not intended as legal advice or as a substitute for consultations with your city attorney, it is designed to provide city officials a source of first resort in Kentucky municipal law.

The Handbook is updated every odd year to provide basic information about the framework of city government and how it functions, planning and conducting meetings, budgeting, taxes, planning and zoning, ethics, and more. As with any legal publication, there is always a chance the law will change between updates. Please work closely with your city attorney on legal matters, and contact the KLC Municipal Law and Training staff with questions about the legal information provided in this Handbook.

About KLC

The Kentucky League of Cities is a nonprofit association that provides a number of services including legal research and information, legislative advocacy, training, insurance, loss control, and employee benefits to nearly 400 cities across the state.

Our job at the Kentucky League of Cities is to connect members with educational opportunities that will deepen your understanding of your role as a city official and help you to be the public servant who truly contributes to an improved quality of life for your citizens through effective local governance. Some of the most popular legal services KLC provides include:

Access to sample ordinances on common topics such as nuisance enforcement, animal control, alcohol regulation, business licenses, and zoning

Assistance with general questions about municipal law, including providing existing written opinions, regulations, statutes, cases, or articles

Access to the city attorney listserve, where city attorneys can discuss legal issues with other municipal attorneys across the state

City attorney continuing legal education opportunities

News updates on OAG opinions, court rulings and reminders on important deadlines and requirements for city governments

Training and seminars on a wide range of municipal law topics

Additionally, cities are represented through KLC’s legislative advocacy and legal advocacy programs, which represent the collective interests of KLC’s member cities to the General Assembly and the Kentucky court system.

For additional information about these services or the City Officials Legal Handbook, you may contact the KLC Municipal Law and Training staff at 1-800-876-4552 or visit www.klc.org. We wish you well during your term in office or employment and look forward to assisting you in your role.

Sincerely,

Jon Steiner

Executive Director/CEO

Kentucky League of Cities

PART I: THE FRAMEWORK OF CITY GOVERNMENT

Chapter 1: The Legal Basis for Kentucky’s Cities

Chapter 2: Creation, Alteration, Merger, and Dissolution of Cities

Chapter 3: Powers of City Governments

Chapter 4: Organization of City Governments

Chapter 5: Commissions, Committees, Boards, and Other City Authorities

PART II: CITY OFFICERS AND EMPLOYEES

Chapter 6: Municipal Elections

Chapter 7: Vacancies and Incompatibilities in Elected Offices

Chapter 8: Nonelected City Officers and the City Attorney

Chapter 9: Officer and Employee Compensation

Chapter 10: Officer and Employee Ethics

Chapter 11: Personnel and Employment Matters

PART III: MUNICIPAL PROCEDURES

Chapter 12: Ordinances, Orders, and Resolutions

Chapter 13: Legal Requirements for Meetings

Chapter 14: Planning and Conducting Effective Meetings

Chapter 15: Open Records Law

PART IV: SPENDING, FINANCE AND TAXATION

Chapter 16: Taxes and Fees

Chapter 17: Public Purpose Spending

Chapter 18: Contracting, Procurement, and Disposition of Surplus Property

Chapter 19: Budgeting, Auditing, and Reporting

Chapter 20: Municipal Finance and Investment

PART V: MUNICIPAL POLICE POWERS

Chapter 21: Basics of Planning and Zoning

Chapter 22: Local Alcoholic Beverage Control

PART VI: MUNICIPAL LIABILITY AND IMMUNITY

Chapter 23: Municipal Liability and Immunity

CHAPTER 1: THE LEGAL BASIS FOR KENTUCKY’S CITIES

I. INTRODUCTION

A. What is a City?

American law currently recognizes no concrete definition of a city. The United States Supreme Court stated, [t]he city is a miniature state. Paulsen v. City of Portland, 13 S.Ct. 750, 753 (1893). [T]he municipal corporation exists merely for the benefit of the people in their public capacity within its territorial area. 1 McQuillin Mun. Corp. § 1:59 (3d ed.). The purpose of municipal corporations is, first, to serve the local inhabitants in regulating and promoting community affairs, and second, to serve the inhabitants of the state residing in the locality in common state matters as an agency of the state. 1 McQuillin Mun. Corp. § 2:11 (3d ed.). See Nourse v. City of Russellville, 257 Ky. 525, 78 S.W.2d 761 (1935).

Kentucky currently has 416 cities. These municipalities offer a broad range of services, and home rule authority grants cities wide latitude to provide for the health, safety, and welfare of their citizens. Among the many city services offered are street maintenance, garbage collection, police and fire protection, emergency medical services, parks and recreation, public transportation, water and sewer services, electricity plants, historic preservation, and community events.

B. How a City Relates to State and Federal Government

The sharp distinctions which once existed between the activities of federal, state, and local governments continue to blur as populations grow and the needs and interests of residents become increasingly complex. No level of government can meet the demands placed upon it by relying solely on its own officers and resources. As the dividing lines between the federal, state, and local governments become more and more clouded, a system of shared government has evolved in which all levels of government work interdependently. Consequently, cities exercise critical relationships with state and federal governments to efficiently and adequately serve the public need. Within the realm of a divided sovereignty based on democratic principles the orderly functioning of every aspect of government performed at each level must be continually watched. The lines of demarcation separating the various areas of governmental authority may tend to dissolve in the interest of more adequate and efficient public service; yet the policy of local control over local affairs serves an equal public purpose, the vital idea of democracy. 1 McQuillin Mun. Corp. § 3A:1 (3d ed.).

Although cities have an increased interdependence with the state and federal governments, cities remain subordinate to both. The supremacy doctrine means that the federal constitution, as well as the statutes and regulations enacted by Congress and federal agencies, are superior to actions taken by city governments. Likewise, state government has plenary, or absolute, authority over cities, and the legislature can make laws that control the powers and duties of cities.

Municipal ordinances are inferior and subordinate to both state and federal laws. Therefore, city governments are preempted from acting in areas where state and federal laws fully occupy a field or where specific state or federal statutes prohibit local action.

C. Responsibility and Authority of City Officials

City officials are elected to serve the public interest. Municipal officers are not empowered merely for the purpose of generating revenue for the city as a corporation but also to supply such municipal needs, conveniences, and comforts as will advance the prosperity of the whole community. 1 McQuillin Mun. Corp. § 1.59 (3rd ed.). Holding public office signifies a position of trust. Individuals occupy municipal offices to efficiently allocate the city’s resources. [P]ublic corporations are such as are created by the government for political purposes, as counties, cities, towns, and villages; they are invested with subordinate legislative powers to be exercised for local purposes connected with the public good, and such powers are subject to the control of the legislature of the state. 1 McQuillin Mun. Corp. § 1:60 (3d ed.).

In Kentucky, there are more than 2,600 elected city officials. These officials have statutory responsibilities that must be strictly observed. Additionally, as the Kentucky Supreme Court has held, municipal officers have implied authority to perform those acts necessary to carry out their prescribed duties. City of Winchester v. Winchester Bank, 205 S.W.2d 997, 999 (Ky. 1947). City officials are therefore afforded necessary flexibility to most effectively serve the public need.

II. KENTUCKY CONSTITUTIONAL PROVISIONS PERTAINING TO CITY GOVERNMENTS

The current version of the Kentucky Constitution became effective in 1891. Since that time, the majority of the constitutional provisions specifically relating to city government have remained unchanged. The Kentucky Constitution does not explicitly create any city. It does, however, envision cities as a part of the governmental structure of the Commonwealth and establishes an elemental framework allowing cities to be created, organized and operated through acts of the state legislature. For reference purposes, the most important sections of the Kentucky Constitution relating to the creation and organization of city governments are summarized below. These sections and other provisions of the Kentucky Constitution relating to city officers and various aspects of the operation of city government are also referred to in subsequent chapters.

A. Section 152 - Vacancies in Elected Public Offices

Establishes the requirements for filling vacancies in public offices, including city offices.

B. Section 156a - City Classification

In November 1994, the Commonwealth’s voters approved a constitutional amendment creating sections 156a and 156b of the Kentucky Constitution. Section 156a replaced Section 156 (now repealed). Section 156a delegates to the Kentucky General Assembly the authority to provide for the creation, alteration of boundaries, consolidation, merger, dissolution, government, functions and officers of cities. Additionally, Section 156a establishes a set of criteria that may be used by the General Assembly to classify cities. Formerly, Section 156 established six classes of cities based solely on population. Section 156a provides that the General Assembly shall create classifications of cities as it deems necessary based on population, tax base, form of government, geography, or any other reasonable basis. Since the approval of Section 156a, there had been no attempt to reclassify cities using criteria other than population until the passage of House Bill 331 in 2014. HB 331 organized cities into two classes based on their form of government instead of population.

C. Section 156b - Home Rule

Authorizes, but does not require, the General Assembly to grant home rule authority to cities. The General Assembly chose to grant home rule through enactment of KRS 82.082. Home rule authority is discussed in greater detail in Chapter 3.

D. Section 160 - City Officers

Requires mayors (chief executives) and legislative body members to be elected by the voters, except that it allows mayors in fourth, fifth, and sixth class cities to be appointed, if authorized by statute. Currently, the statutes do not authorize appointment of mayors and with the passage of HB 331, fourth, fifth, and sixth class cities no longer exist; so all mayors continue to be elected. Section 160 establishes a four-year term of office for mayors and a two-year term of office for city legislative body members. The section prohibits mayors in first and second class cities from serving more than three consecutive terms; however, it places no limit on the number of terms a mayor may serve in other classes of cities. Finally, Section 160 authorizes the General Assembly to establish the qualifications of all city officers, the causes for which they may be removed from office, and how vacancies in office are to be filled.

E. Section 161 - Compensation of Local Government Officers

The compensation of a city officer shall not be changed after his election, or appointment, or during his term of office. Furthermore, it prohibits extending the term of office of any city officer beyond the period for which the officer was elected.

F. Section 165 - Incompatible Offices and Employments

Prohibits any person from simultaneously holding two city offices, either in the same or different cities. It prohibits any person from simultaneously holding a state office and an office or position of employment with a city.

G. Section 167 - Time of Elections

Requires all city and urban county officers to be elected at the general election in November in even-numbered years. Prior to the amendment of Section 167 in 1992, city mayors were elected in odd-numbered years and legislative body members were elected in even-numbered years.

H. Section 228 - Oath of Office

Establishes the constitutional oath that all public officers, including city officers, are required to take prior to assuming office.

Members of the General Assembly and all officers, before they enter upon the execution of the duties of their respective offices, and all members of the bar, before they enter upon the practice of their profession, must take the following oath or affirmation:

I do solemnly swear (or affirm, as the case may be) that I will support the Constitution of the United States and the Constitution of this Commonwealth, and be faithful and true to the Commonwealth of Kentucky so long as I continue a citizen thereof, and that I will faithfully execute, to the best of my ability, the office of ______________ according to law; and I do further solemnly swear (or affirm) that since the adoption of the present Constitution, I, being a citizen of this State, have not fought a duel with deadly weapons within this State, nor out of it, nor have I sent or accepted a challenge to fight a duel with deadly weapons, nor have I acted as second in carrying a challenge, nor aided or assisted any person thus offending, so help me God.

I. Section 234 - Residence and Place of Office of Public Officers

Requires all city officers to reside within their city.

For purposes of this section, only the mayor and legislative body members are considered to be officers. See Newport v. Schindler, 449 S.W. 2d 17 (Ky. 1970).

J. Section 246 - Maximum Limit on Compensation of Public Officers

This section, which was last amended in 1949, sets a limit on the annual compensation that may be paid to public officers. Under this section, first class city mayors are limited to $12,000 per year. All other mayors and all city legislative body members are limited to $7,200 per year.

The limits on compensation have been increased under a cost-of-living theory by court decisions interpreting Section 246 and by enactments of the Kentucky General Assembly. KRS 83A.075 states that the Department for Local Government shall compute, by the second Friday of February each year, the annual increase or decrease in the consumer price index from the prior year using 1949 as the base year for calculation in accordance with Section 246. See also Matthews v. Allen, 360 S.W. 2d 135 (Ky. 1962).

III. KENTUCKY REVISED STATUTES PERTAINING TO CITY GOVERNMENTS

Since the Kentucky Constitution contains only a bare-bones framework to govern the creation and organization of cities, one must look to the laws enacted by the state legislature to find the detailed requirements in this area. The General Assembly of the Commonwealth of Kentucky meets in a 30-day regular session each odd-numbered year and a 60-day regular session every even-numbered year to enact our state laws. In addition, the General Assembly may meet in extraordinary session, upon the call of the Governor, to enact laws for specific purposes. The laws enacted by the General Assembly in its regular and extraordinary sessions are codified in the Kentucky Revised Statutes. The following are references to some of the most important chapters within the Kentucky Revised Statutes (KRS) relating to city governments and city officials.

A. KRS Chapter 65 - General Provisions Applicable to Counties, Cities, and Other Local Units

Contains provisions applicable to cities and other local governments, including: interlocal cooperation authority; land bank authority; short-term borrowing requirements; governmental leasing requirements; uniform financial reporting requirements; code enforcement boards; and provisions relating to the tort liability of local governments.

B. KRS Chapter 65A – Special Purpose Governmental Entities

This chapter of the Kentucky Revised Statutes designates certain agencies and organizations as special purpose governmental entities. The section requires entities to abide by certain audit requirements and budget publication requirements. It assesses penalties for entities that fail to abide by the requirements of Chapter 65A. The section also requires the Department for Local Government to maintain certain forms and fees pertaining to special purpose governmental entities.

C. KRS Chapter 67 - Charter County Governments and Unified Local Governments

Establishes requirements for the creation, organization, and operation of charter county governments and unified local governments. Currently, no cities in Kentucky operate under these plans of government.

D. KRS Chapter 67A - Urban County Governments

Establishes requirements for the creation, organization, and operation of urban county governments. The city of Lexington and Fayette County were merged under this authority in 1974.

E. KRS Chapter 67C - Consolidated Local Governments

Establishes a process for and requirements related to the creation of a consolidated local government in counties containing a city of the first class. The city of Louisville and Jefferson County were merged under this authority effective on January 1, 2003.

F. KRS Chapter 81 - City Creation, Classification, Merger and Dissolution

Establishes requirements for the creation, reclassification, merger, and dissolution of cities.

G. KRS Chapter 81A - Annexation

Establishes requirements for annexation and reduction of territory by cities.

H. KRS Chapter 82 - General Provisions Applicable to Cities

Contains numerous sections granting specific authority to cities or setting limitations on authority, including, most importantly, the home rule statute.

I. KRS Chapter 83 - First Class City Organization and Government

Establishes requirements for the organization and government of first class cities. This chapter contains a separate home rule provision in KRS 83.420 that applies only to first class cities.

J. KRS Chapter 83A - Organization of City Governments

Establishes requirements for the organization of city governments. Chapter 83A applies to all classes of cities; however, the more specific provisions contained in Chapters 67A and 67C control the organization of urban county governments and consolidated local governments, respectively, rather than the more general provisions of Chapter 83A.

CHAPTER 2: CREATION, ALTERATION, MERGER, AND DISSOLUTION OF CITIES

I. INCORPORATION OF CITIES

The General Assembly has established procedural requirements and standards for the incorporation of cities in KRS 81.050 and 81.060. The county circuit court containing the area to be incorporated issues an order creating the city after the specified standards and procedures have been followed.

A. Procedure

Proceedings to incorporate a city must be commenced by a petition filed with the circuit court clerk by those seeking to create the new city. KRS 81.050(1). The petition must contain the following:

1. The signatures and addresses of:

a. a number of registered voters equal to 2/3 of the voters of the territory to be incorporated; or

b. a number of real property owners who own property in the area with a value equal to at least 2/3 of the assessed value of all real property in the area to be incorporated. KRS 81.050(1)(a)(1) and (2).

2. A statement of the boundaries of the area to be incorporated and the number of residents. KRS 81.050(1)(b).

3. An accurate map of the area to be incorporated. KRS 81.050(1)(c).

4. A detailed statement of the reasons for incorporation, including the services sought from the proposed city. KRS 81.050(1)(d).

5. A description of the existing facilities and services within the area to be incorporated. KRS 81.050(1)(e).

6. A statement of the form of government under which the proposed city will operate. KRS 81.050(1)(f).

Notice of the petition’s filing and its purpose must be advertised pursuant to KRS Chapter 424. Once the petition is properly filed, the court is required to hold a public hearing no earlier than 20 days from the date it is filed and determine if the required standards have been met. KRS 81.050(2).

B. Standards

1. The standards for incorporation are set forth in KRS 81.060. At the hearing, if the court finds that the proper notice has been given or publication made, and no defense to incorporation is made, the court is required to enter a judgment establishing the city if it finds as a matter of law the following standards have been met:

a. At least 300 persons reside in the area to be incorporated. KRS 81.060(1)(a).

b. Incorporation constitutes a reasonable way of providing the public services sought by the voters or property owners of the territory, and there is no other reasonable way to provide the services. KRS 81.060(1)(b).

c. The area to be incorporated is contiguous. KRS 81.060(1)(c).

d. The territory is able to provide necessary services within a reasonable time after incorporation. KRS 81.060(1)(d).

e. The interest of other areas and adjacent local governments is not unreasonably prejudiced by the incorporation. KRS 81.060(1)(e).

2. In determining whether the above statutory requirements have been met, KRS 81.060(2) requires the court to consider the following, in addition to any other relevant information:

a. Whether the area is urban or rural in character. KRS 81.060(2)(a).

b. The ability of any existing city, county or district to provide needed services. KRS 81.060(2)(b).

c. Whether the area and any existing city are interdependent or part of one community. KRS 81.060(2)(c).

d. The need for city services in the area. KRS 81.060(2)(d).

e. The development scheme of applicable land use plans. KRS 81.060(2)(e).

f. The area and topography of the territory to be incorporated. KRS 81.060(2)(f).

g. The effect of the proposed incorporation on the population growth and assessed valuation of the real property in the area. KRS 81.060(2)(g).

3. Any inhabitant of the area proposed for incorporation may object to the incorporation and raise a defense against it at the hearing. If a defense is made, the court must hear testimony on both sides of the issue and decide the matter by issuing a judgment establishing or refusing to establish the city, as may seem proper. KRS 81.060(3). If the court issues an order establishing the city, the order must set forth the following:

a. The name of the city.

b. A metes and bounds description of the boundaries of the city.

c. The population of the new city.

d. The form of government under which the city shall operate and the class to which the city shall be assigned by reason of its form of government under KRS 81.005.

e. The names of the officers who will hold office until the next regular election. KRS 81.060(4).

C. Jefferson County Incorporations

KRS 67C.111(2) provides that when a consolidated local government is adopted in a county containing a first class city, there shall be no further incorporations of cities within the county. All cities, other than the first class city, which were established at the adoption of the consolidated local government remain incorporated. The Louisville-Jefferson County consolidated local government was approved by the voters in November 2000 and became effective in January 2003; therefore, no other city may now be incorporated within Jefferson County.

II. ANNEXATION AND REDUCTION OF BOUNDARIES

A city may expand or reduce its boundaries through the procedures established in KRS 81A.005 to 81A.520. The requirements set forth in those statutes must be strictly followed.

A. Annexation by First Class Cities

There are two methods by which a first class city may annex unincorporated territory.

1. If a first class city is operating under a cooperative compact with its county, pursuant to KRS 79.310 to 79.330, and desires to annex unincorporated territory, the legislative body of the city must enact an ordinance stating the intention of the city to annex. The question of annexation must then be decided by the residents of the area to be annexed in an election. If a majority of resident voters favor annexation, a second ordinance is enacted formally annexing the territory. KRS 81A.005.

2. If a first class city does not have a cooperative compact with its county in place and desires to annex unincorporated territory, it must prepare a report setting out the specifics of the proposed annexation, followed by public hearings as provided in KRS 81A.060. The report must contain a map of the city and adjacent territory showing:

a. The present and proposed boundaries of the city. KRS 81A.050(1)(a).

b. Current streets, major trunk water mains, sewer interceptors, and outfalls and other utility lines. KRS 81A.050(1)(b).

c. Current areas receiving, or able to receive, major city services and the proposed extension to other areas of city services. KRS. 81A.050(1)(c).

d. The prevailing general land use patterns as they exist in the proposed annexation area. KRS 81A.050(1)(d).

e. If the annexing city has adopted zoning, then a map showing the zoning that will be effective for the annexed area. KRS 81A.050(1)(e).

In addition, the report must contain a statement showing that the area meets the requirements of KRS 81A.010, and a statement setting forth the plans of the city for extending major city services to the area. KRS 81A.050(2), (3).

Prior to the enactment of the first ordinance, the city must hold at least two public hearings on the proposed annexation, complying with the notice requirements of KRS Chapter 424, to explain the report and to provide residents and landowners an opportunity to be heard concerning the annexation. KRS 81A.060(1), (2). Following the hearings, the city must enact an ordinance stating its intent to annex the area. KRS 81A.420.

Residents and property owners have 30 days from the date of publication of the intent to annex ordinance to file a petition against the annexation. KRS 81A.020(1). If no petition is filed, the city may enact a second ordinance formally annexing the territory. KRS 81A.010(1).

If a petition is filed, the issue is tried before a circuit court jury. If the jury finds that less than 75% of the residents and property owners have petitioned against annexation, and that the annexation will be in the best interests of the city and will cause no manifest injury to property owners, the court must approve the annexation. If the court enters judgment approving the annexation, the city may then proceed to finalize the annexation. If the jury finds that 75% or more of the residents and property owners have petitioned against the annexation, then the annexation may not take place unless the city can show that the failure to annex will materially retard the prosperity of the city and of the owners and inhabitants of the territory sought to be annexed. KRS 81A.020.

NOTE: KRS 67C.111(3) places a prohibition on any annexations by cities within a consolidated local government for 12 years following adoption of the consolidated local government. As of 2015, the moratorium on annexations by cities within Louisville-Jefferson County was lifted. However, the statute prohibits these cities from annexing any territory without the prior approval of the legislative body of the consolidated local government, which must be requested by ordinance. The legislative body of the consolidated local government has 60 days from the date of receiving the request to make a decision. If the legislative body fails to make a decision within this time, then there is an automatic approval by the consolidated local government.

B. Annexation by Home Rule Cities

Any home rule city may extend the city’s boundaries to include unincorporated areas by following the statutory procedures for consensual or nonconsensual annexation, depending on whether there is opposition to the annexation. As mentioned above, before any home rule city located within a consolidated local government may annex under the following procedure, it must first receive the approval of the legislative body of the consolidated local government. KRS 67C.111(3).

1. Area Subject to Annexation

a. The territory proposed to be annexed must be adjacent or contiguous to the city at the time the annexation proceeding begins. KRS 81A.410

NOTE: In 2014, the Kentucky Supreme Court provided crucial guidance in interpreting the phrase adjacent or contiguous, the meaning of which cities have struggled with for years. The Court found the requirement that annexed territory be adjacent or contiguous allows cities to annex property that is either touching the boundary of the city or is nearby; i.e., perhaps separated by a roadway or river. There is no requirement in the law that the boundaries be natural, regular, or a particular shape. The Court made clear that courts should not disturb a city’s actions regarding annexation as long as there is a rational connection between the action taken and the supporting evidence. City of Lebanon v. Goodin, 436 S.W.3d 505 (Ky. 2014).

b. The territory proposed to be annexed must be suitable for development for urban purposes without unreasonable delay because of population density, commercial, industrial, institutional or governmental use of land, or subdivision of land. KRS 81A.410(1)(b).

c. No part of the area proposed for annexation may lie within the boundary of another incorporated city. KRS 81A.410(2).

d. No part of the territory within an agricultural district, which is a district expressly certified by the State Soil and Water Conservation Commission, may be annexed by a city. KRS 262.850(10).

e. No part of any territory proposed to be annexed may lie within another county. Town of Elsmere v. Tanner , 53 S.W. 2d 522 (Ky. 1932); Smeltzer v. Messer , 225 S.W. 2d 96 (Ky. 1949).

2. Nonconsensual Annexation Procedure

Unless each landowner in the area to be annexed provides written consent to be annexed under KRS 81A.412, a city must follow the procedures for nonconsensual annexation found in KRS 81A.420 and 81A.425.

a. The legislative body must enact an ordinance stating the intent of the city to annex unincorporated territory. This intent to annex ordinance must contain an accurate description of the territory to be annexed and declare it desirable to annex the territory. KRS 81A.420(1).

b. After the first reading of the intent to annex ordinance, the city must send a notice to each property owner within the territory proposed to be annexed. KRS 81A.425(1). This notice must be sent by first class mail to each property owner listed on the records of the county property valuation administrator as of January 1 of the year in which the intent to annex ordinance is enacted. KRS 81A.425(2). The notice must be sent no later than 14 days prior to the meeting at which the intent to annex ordinance receives its second reading, and the city clerk must certify the list of owners, which must be made a part of the official record at the meeting when the second reading of the annexation ordinance occurs. KRS 81A.425(3). The notice must include the time, date, and location of the meeting at which the intent to annex ordinance will receive its second reading. In addition, the city must include a copy of the proposed intent to annex ordinance along with the notice. KRS 81A.425(4). If the city fails to substantially comply with the notice requirement, and the failure results in material prejudice to the substantial rights of affected property owners, the ordinance annexing the territory is voidable by a circuit court with competent jurisdiction. KRS 81A.425(7).

c. After the second reading and passage of the intent to annex ordinance, the city must publish the ordinance one time. KRS 83A.060(9); KRS 81A.425(6). At the same time, the city must publish a notice designed specifically to inform the resident voters and real property owners in the area of proposed annexation of their right to present a petition to the city’s mayor to have the issue of annexation placed on the ballot. The notice must inform residents and property owners that they have 60 days from the date of publication of the intent to annex ordinance to present a valid petition. KRS 81A.420(2); Merritt v. Campbellsville , 678 S.W.2d 788 (Ky. App. 1984). The ordinance and notice must be published in the newspaper qualified under KRS 424.120 to publish legal notices of the city.

d. In addition to the first publication of the notice of right to petition, the city will have to publish the notice regarding the time period for filing a petition a second time. The second publication of the notice must occur not less than seven nor more than 21 days from the last day the petition may be filed. The city does not have to republish the intent to annex ordinance in this notice. KRS 424.130(1)(b).

e. If, within 60 days of the date of publication of the intent to annex ordinance, either 50% of the resident voters or 50% of the landowners file a valid petition with the mayor to have the issue of annexation placed upon the ballot, the issue must be placed on the ballot at the next regular election. The mayor must present the petition to the county clerk. The county clerk must certify the petition as sufficient no later than the second Tuesday in August before the regular election. Otherwise, the issue will not be placed on the ballot until the subsequent regular election. If a bona fide petition is not presented to the mayor within 60 days following the publication of the ordinance, the city may enact an ordinance annexing the territory. The territory shall become part of the city for all purposes at that time. KRS 81A.420(2), (3).

NOTE: Once the city has passed the intent to annex ordinance, and a valid petition is filed, it may not later repeal the ordinance to avoid a referendum on annexation. OAG 92-147.

f. When there is an election:

(i) If less than 55% of those voting oppose the annexation, the city must pass a final ordinance annexing the territory within 60 days of certification of the election results. If the city elected to establish zoning for the annexed territory prior to the completion of the annexation, the final ordinance must include a map showing the zoning applicable to the area. On publication of the ordinance, the territory shall become a part of the city for all purposes. KRS 81A.420(3).

(ii) If 55% or more of those voting oppose annexation, the annexation is defeated. KRS 81A.420(2)(c). When a proposal to annex is rejected by the voters, no further steps to annex the same territory may be taken for five years from the date of rejection. The five-year prohibition is absolute, meaning the city may not include any territory that was the subject to vote in a larger, smaller, or different annexation proposal for a five-year period. KRS 81A.460; City of St. Matthews v. Morrow , 408 S.W.2d 471 (Ky. 1966).

NOTE: The only persons allowed to vote in the election are those that are registered to vote in the area proposed to be annexed. This means that property owners not qualified to vote in the territory are precluded from voting.

3. Consensual Annexation Procedure

A city may annex any area meeting the requirements of KRS 81A.410 if each owner of record of the land to be annexed consents in writing to the annexation. The city is not required to enact an intent to annex ordinance or to comply with the notice requirements of KRS 81A.425. Furthermore, the city does not have to wait the 60-day period prior to enacting a final ordinance annexing the area. If the city has obtained the prior written consent of each landowner, it may proceed immediately to enact a single ordinance annexing the territory. If zoning will apply in the area to be annexed, the annexation ordinance must include a map showing the zoning. On the enactment of the ordinance, the territory becomes a part of the city. KRS 81A.412.

a. Consent annexation when litigation is pending. When a city has enacted an intent to annex ordinance and the annexation is being challenged in court, the city may proceed to annex any land contained in the area proposed to be annexed that is contiguous to the city if the owner of the land consents in writing to the annexation. KRS 81A.500.

b. Contracting for consent. A city may contract with owners of territory outside of the city for their consent to be annexed at a future date in consideration of the city providing services to nonresidents of the city. A city is also authorized to contract with property owners to waive their rights to remonstrate in consideration of the city’s provision of services. These contracts should be filed with the county clerk to place subsequent purchasers on notice. Jewell v. City of Bardstown , 260 S.W.3d 348 (Ky. App. 2008).

4. Corridor Annexation

Under extremely limited circumstances, cities are permitted to annex thin strips of territory into the city to satisfy the requirement of contiguity. The power to annex a corridor, or narrow strip of land, is limited to situations where the land has a concrete and tangible municipal value or purpose existing at the time the annexation is sought. Ridings v. Owensboro, 383 S.W.2d 510 (Ky. 1964). See also, City of Lebanon v. Goodin, 436 S.W.3d 505, 514-515 (Ky. 2014). This requirement prevents mere speculation that services might be provided at some future date from serving as a basis for annexation. If a municipal value or purpose occurs in the corridor, then a finding of contiguity may well be warranted…. If, however, only a barren corridor exists, there is no contiguity. Griffin v. City of Robards, 990 S.W. 2d 634 641 (Ky. 1999).

5. Simultaneous Annexation

When a city desires to annex two or more territories that are not contiguous to one another but contiguous to the city, it is recommended that the city enact separate ordinances for each of the territories. While enacting separate ordinances under such circumstances is not required by statute, the Kentucky Court of Appeals gave approval to Lexington’s 18 ordinances annexing 18 separate territories in Voorhes v. City of Lexington, 377 S.W. 2d 57 (Ky. 1964). In addition, OAG 84-137 suggests because of the petition and voting procedure for annexation, lumping noncontiguous territories into a single ordinance should not be allowed to dilute voting power of the individual territories. The Attorney General stated that the residents of each separate territory should be allowed to vote on the question whether or not that particular territory is to be annexed.

6. Annexation of Industrial Plants

No unincorporated territory on which an industrial plant(s) is located may be annexed by any city unless the territory is part of a broad, comprehensive plan of annexation. KRS 81A.510(2). Furthermore, the territory may only be annexed if:

a. It is contiguous to the city;

b. The territory itself is both compact and contiguous; and

c. The number of registered and qualified voters in the territory is equal to or greater than 50% of the average number of persons employed by industrial plants within the territory during the next preceding calendar year. KRS 81A.510(2).

Nothing in KRS 81A.510 prohibits any municipality from annexing any industrial plant(s) or its properties if the duly authorized representatives of the plant(s) consent to or request such action. KRS 81A.510(3). Any people within the area to be annexed shall have the right to protest as allowed under other annexation statutes. KRS 81A.510(4).

7. Annexation of an Area Containing the Utility Infrastructure Owned by Another City

Utility infrastructure means physical property existing in the territory that is used to transmit, generate, produce, distribute, etc., electricity, gas, oil, water, and sewage to or from the public for compensation. KRS 81A.427(1)(a) - (e).

If a city is annexing, either nonconsensually or consensually, territory that contains the utility infrastructure of another city, the annexing city is required to send notice of the annexation to the mayor of each city owning utility infrastructure within that territory. In the case of a nonconsensual annexation, the notice must be sent at least 14 days prior to the meeting where the intent to annex ordinance will receive its second reading. KRS 81A.427(3). The notice must be sent by certified mail, return receipt requested, and must include a copy of the intent to annex ordinance along with information regarding the date, time, and location of the meeting where the intent to annex ordinance will receive its second reading. KRS 81A.427(3)(a) and (b). The notice must additionally inform the city of its right to object to the annexation. KRS 81A.427(3)(c). In the case of consensual annexations, a notice meeting the same requirements must be sent at least 14 days prior to the meeting where the actual annexation ordinance is proposed to receive its second reading. KRS 81A.427(4).

Any city receiving notice as the owner of utility infrastructure has the right to object and prevent the annexation by sending a certified copy of a municipal order to the annexing city that states the objection and includes a description of the utility infrastructure owned by the city and its location within the area proposed to be annexed. The municipal order objecting to the annexation must be sent by certified mail or hand delivered to the annexing city at any time before or at the meeting where the ordinance is scheduled to receive its second reading. KRS 81A.427(5).

Even if a city objects to the annexation, the cities may still agree to some other arrangement under the Interlocal Cooperation Act. If the annexing city does not receive a municipal order prior to or at the meeting when the second reading takes place, the annexing city may proceed with annexation, and the city owning the utility infrastructure forfeits its right to object and is deemed to consent. KRS 81A.427(6).

Failure to follow the procedures of KRS 81A.427 renders the annexation ordinance voidable by the Circuit Court. KRS 81A.427(7).

8. Requirements Applicable to All Cities

a. A city annexing any unincorporated territory is liable for any indebtedness that is attached to the territory by reason of its having been included in any taxing district. KRS 81A.450.

b. A city annexing territory must, within 60 days of the annexation, send an accurate map and description of the territory annexed, along with a duly certified copy of the annexation ordinance, to the county clerk of the county in which the city is located and to the Secretary of State. KRS 81A.470(1).

The address for the Secretary of State is Capitol Building, 700 Capitol Avenue, Suite 80, Frankfort, KY 40601, Attention: Land Office.

The map and description must be prepared by a professional land surveyor. The annexed land must be depicted as a closed geometric figure on a plat annotated with bearings and distances, or sufficient curve data to describe each line. The surveyor is required to state on the documents the location of the existing municipal boundary, the physical features with which the boundary coincides, and a statement of the recorded deeds, plats, right-of-way plans, or other resources utilized in depicting the municipal boundary. KRS 81A.470(1). A city that has annexed territory cannot levy any tax upon the residents or property of the newly annexed territory until it has complied with the requirements of KRS 81A.470(1). KRS 81A.470(2).

It is extremely important for cities to carefully comply with the requirements for the map and description of the annexed territory. Failure to do so can result in the discovery that maps submitted to the Secretary of State do not match the city’s understanding of what property was annexed into the city. This results not only in costs associated with resurveying the territory to be annexed, but potentially in the repayment of city taxes because of a violation of the statute.

c. The legislative body of the city must, within 60 days of annexation, send the county clerk in the county where the city is located a map clearly delineating the boundaries of the area affected, along with a list of the properties within the annexed territory that includes the name and address of each property owner. KRS 81A.475. A city that has annexed territory cannot levy any tax upon the residents or property of the newly annexed territory until it has complied with this requirement. OAG 84-363 and OAG 83-188.

NOTE: The Kentucky Court of Appeals has held that a city must strictly comply with the map, ordinance, and other filing requirements of KRS 81A.470 and KRS 81A.475 to levy taxes in the annexed area. The Court ordered the city to refund taxes paid by residents of the annexed area within two years of the date of payment, since the city did not comply with the statutory requirements. The city was not obligated to pay interest on the taxes improperly collected. City of Somerset v. Bell, 156 S.W. 3d 321 (Ky. App. 2005).

d. The annexation project engineer of cities of the first class and the city clerk of cities of the home rule class must send to the county clerk, Kentucky Department of Revenue, and to each franchise taxpayer within the city, a description of the boundaries of the city after annexation by the first day of January after the annexation occurs. KRS 136.190(2).

e. The rights of utility companies providing utility services in the annexed area prior to the annexation are expressly preserved. KRS 81A.490. See also KRS 220.530 (annexation of sanitation district).

f. To challenge the legality of an annexation, a person must have standing. The case of Fourroux v. City of Shepherdsville , 148 S.W. 3d 303, 306 (Ky. App. 2004), held that for a citizen of a city to have standing, the citizen must show that he or she is being personally, substantially, and adversely affected by the annexation, and that the damage to himself is different in character from that sustained by the public generally. Id. at 306. The case stands for the proposition that only those persons that can demonstrate some unique harm apart from other city residents have standing to bring a challenge against the city’s annexation. In 2018, the Kentucky General Assembly enacted KRS 81A.482, which grants standing to persons who either own property within or adjoining the territory proposed to be annexed where there are no residents.

KRS 81A.484 imposes a statute of limitation for challenges to annexations. It provides that if the legal challenge is not filed within two years after the annexation, the annexation becomes final and the territory is deemed to be validly annexed.

C. Annexation of Cities With Populations Less Than 1,000

A city with a population of 1,000 or more may annex a city with a population less than 1,000 that has a common boundary with the annexing city. The legislative bodies of the city with less than 1,000 and the annexing city must determine that the citizens of the city with less than 1,000 can be better served through annexation, and both cities must enact identical ordinances declaring the annexation. KRS 81A.530(1).

Additionally, the following requirements must be met:

1. Identical Ordinances

The two cities must enact identical ordinances that include the following information:

a. A statement of the financial consideration, if any, between the two cities and the terms of any financial arrangements. KRS 81A.530(2)(a);

b. The resolution of any taxes or revenues from the area of the city being annexed. KRS 81A.530(2)(b);

c. A statement of the land use or zoning regulations that would be applicable to the area of the city being annexed, if planning and zoning is in effect in either city. KRS 81A.530(2)(c); and

d. The date that the annexation would be effective, which cannot be more than one year after the date on which the last of the identical ordinances is adopted. KRS 81A.530(2)(d).

2. Petition or Election

For the annexation to be completed, one of the following procedures must be followed and completed:

a. Prior to the effective date of the annexation, a petition in support of the annexation, containing a number of signatures of residents in the area of the city being annexed that is 51% or more of the number of registered voters in the area of the city being annexed, must be submitted to the county clerk where the city being annexed is located. The county clerk must, within 10 working days of the receipt of the petition, notify each city of the validity of each signature and address on the petition. KRS 81A.530(3)(a); or

b. An election must be held to determine the desire of the voters in the city being annexed. The election is required to be held at a regular election. The question on the ballot must be in substantially the following form: Are you in favor of annexing the City of _______ into the City of _______ and dissolving the City of _______ ? Yes ____ No ____. KRS 81A.530(3)(b).

If the requisite number of signatures is verified by the county clerk, or if a majority of the legal votes cast at the election in the city proposing to be annexed favors the annexation, the annexation goes forward and becomes effective and the city being annexed is dissolved at the date provided in the identical ordinances, upon adoption of an ordinance by the annexing city accepting the annexation. KRS 81A.530(4).

3. After the Annexation

a. All assets of the city being annexed existing on the date of the annexation become the property of the annexing city. All debts of the city being annexed are assumed by the annexing city so that the tax burden is uniform throughout the area of the two cities following the annexation. KRS 81A.530(5).

b. The area of the city being annexed assumes the local option status for the sale of alcoholic beverages of the annexing city. KRS 81A.530(9).

c. The annexing city must comply with the notice requirements in KRS 81A.470 by filing an accurate map of the annexed area together with a copy of the identical ordinances with the county clerk and the Secretary of State. Compliance with KRS 81A.475 is not required. The city clerk of the city being annexed is required to give written notice of the dissolution of the city to the Secretary of State within 60 days after the effective date of the dissolution. KRS 81A.530(8).

The address for the Secretary of State is Capitol Building, 700 Capitol Avenue, Suite 80, Frankfort, KY 40601, Attention: Land Office.

D. Reduction of Territory

1. Home Rule Cities

a. If the city desires to strike territory that is inhabited, the legislative body of the city must enact an ordinance stating its intent for the reduction. The ordinance must accurately define the boundaries of the area to be stricken and must provide that the question of reduction will be submitted to the registered voters in the area to be stricken. If the ordinance is filed with the county clerk no later than the second Tuesday in August, the election must be held at the next regular election. KRS 81A.440(1)(a). If a majority of those voting on the question favor the reduction, then the city must, within 10 days of the certification of the election, enact an ordinance declaring the area to be stricken from the city as of the effective date of the ordinance. KRS 81A.440(1)(b). When a city strikes territory from its boundaries, it must make the same type of filings with the county clerk and the Secretary of State that are required in the case of annexation. KRS 81A.470 and KRS 81A.475. See Section II(B)(8) of this Chapter.

b. If the city desires to strike territory that is uninhabited, the city must enact an ordinance stating the intention of the city to strike the uninhabited area from the city. The ordinance must accurately define the boundary of the uninhabited territory and declare the city’s intention to strike the territory from the city limits. Once the ordinance stating the intention to strike uninhabited territory has been enacted, the city clerk must send a copy of the ordinance to the county judge/executive of the county by certified mail, return receipt requested. KRS 81A.440(2)(a). The legislative body of the county may enact an ordinance within 30 days of the receipt of the city’s intent to strike ordinance objecting to the striking of the territory from the city’s boundaries. If the county enacts an ordinance objecting, the county must send a copy of the ordinance to the city’s mayor by certified mail, return receipt requested. The county ordinance prevents the city from striking the territory. KRS 81A.440(2)(c). If the county does not enact an ordinance objecting to the city’s striking of uninhabited territory within 30 days, it shall constitute acceptance of the city’s decision to strike the territory and the city may proceed to enact a second ordinance striking the territory. Upon the enactment of the city’s second ordinance, the territory shall cease to be a part of the city. KRS 81A.440(2)(b). In addition, the city must make the same type of filings with the county clerk and the Secretary of State that are required in the case of annexation. KRS 81A.470; KRS 81A.475. See Section II(B)(8) of this Chapter.

2. First Class Cities

The procedure and requirements for the reduction of territory by first class cities is the same under KRS 81A.010 and 81A.020 as in the case of annexations. However, KRS 81A.440 applies, on its face, to all cities; therefore, it is at least arguable that a city of the first class could use the procedures of KRS 81A.440 to reduce its territory.

III. MERGER OF CITIES

The authority for and procedural requirements governing the merger of cities are set forth in KRS 81.410 to 81.440.

A. Authority

Any two or more contiguous cities in the Commonwealth may merge or consolidate into one city by a majority vote of each city at elections called for such purpose. KRS 81.410(1).

B. Procedure

1. The legislative body of each city desiring to merge must enact an ordinance to propose the merger and to call elections in the respective cities to determine the desire of the voters on the question of merger. KRS 81.410(2).

2. An election on merger must be held at the next regular election if the ordinances enacted by the legislative bodies of the cities desiring to merge are filed with the county clerk by the second Tuesday in August preceding the regular election. KRS 81.420(1).

3. The question of merger is required to be submitted to the voters in each city in substantially the following form: Are you in favor of merging or consolidating the City of ______ and the City of ______ into one city, to be known as the City of ______? Yes_____ No_____. KRS 81.420(1).

4. If the proposal to merge is passed by a majority in each city conducting a separate election, then 30 days after the election results are certified the cities become one city of the class and organizational structure of the largest of the former cities. KRS 81.420(2).

5. Merged cities are required to record changed boundaries in the offices of the county clerk and Secretary of State pursuant to KRS 81A.470, but are not required to file a list of properties included in the merger or the names and addresses of property owners as required by KRS 81A.475. KRS 81A.420(3).

6. The members of the legislative bodies of the merging cities continue to hold their offices, constituting a combined legislative body, until their respective terms of office expire, which may be no longer than two years. KRS 81.430(1),(2). At the expiration of the terms, an election must be held to elect the correct number of legislative body members as required by the organizational structure of the city under KRS 83A.030. KRS 81.430(2).

If a member of the combined legislative body resigns prior to the end of the term of office, one of the following applies:

a. If after the resignation, the total number of combined legislative body members is greater than what will be required by the new organizational structure, the vacancy is not filled. KRS 81.430(3)(a); or

b. If after the resignation, the total number of combined legislative body members is less than what will be required by the new organizational structure, the vacancy is filled as required by KRS 83A.040. KRS 81.430(3)(b).

7. A merger of cities does not impair the contractual obligations of either of the former cities. Furthermore, all special tax levies authorized for the payment of interest and principal on bonds or to create sinking funds continue to be levied in the same area and under the same laws until the bonds are retired. KRS 81.440. KRS 81.440.

IV. TRANSFER OF INCORPORATED TERRITORY

KRS 81.500 establishes the authority, requirements and procedures for the transfer of incorporated area of one city to another city.

A. Authority

When two cities of the home rule class have a common boundary, and it is determined that a specified area within one city can be better served by the adjoining city, the specified incorporated area may be transferred to the adjoining city upon enactment of identical ordinances by each city legislative body and the submission of a petition in support of the transfer signed by voters in the area to be transferred. KRS 81.500(1).

B. Requirements and Procedures

1. The identical ordinances declaring the intent to transfer the property must contain the following:

a. A definition of the area to be transferred. KRS 81.500(2)(a).

b. A statement of the financial considerations between the two cities regarding the area and the terms of any financial agreements. KRS 81.500(2)(b).

c. The resolution of any taxes or revenues from the area. KRS 81.500(2)(c).

d. A statement of the land use or zoning regulations which would be applicable to the area being transferred, if planning and zoning is in effect in either city. KRS 81.500(2)(d).

The ordinances must be enacted as required by KRS 83A.060. KRS 81.500(4).

2. Before the effective date of the transfer, a petition in support of the transfer containing signatures of not less than 51% of the registered voters of the area being transferred must be submitted to the county clerk of the county from which the property is being transferred. Within 10 working days of receipt of the petition, the county clerk is required to notify each city of the validity of the petition. If, however, the property to be transferred contains no residents, then no petition is required, as long as all property owners consent in writing to the transfer. KRS 81.500(3).

3. The cities involved in the transfer must comply with the provisions of KRS 81A.470 and 81A.475. The statutes require a detailed map of the transferred property, including a metes and bounds description, to be filed with the county clerk and the Secretary of State within 60 days of the transfer. A list of properties included in the transferred area including names and addresses of property owners must be included in the filing with the county clerk. No city that has