PRIVATIZATION OF PUBLIC SERVICES

K.S.A. ch. 12, art. 55

in effect

K.S.A. 12-5501 Privatization of public services; definitions.

12-5501. Privatization of public services; definitions. As used in this act: (a) "Capital intensive public service" means a public service which requires the investment of capital by a private contractor in physical facilities which would be amortized over a period exceeding one year; (b) "public service" means (1) the collection, transportation, processing, recycling or disposal of solid wastes or (2) the acquisition, treatment or distribution of water; (c) "municipality" means any city or county or two or more cities or counties acting jointly; (d) "private contractor" means one or more persons who are not a municipality; (e) "service agreement" means any contract between a municipality and a private contractor under which the private contractor agrees to furnish to the municipality or to any other user a capital intensive public service and the municipality agrees to pay or cause to be paid to the private contractor a service fee for such service setting forth the terms and conditions thereof; (f) "service fee" means the payment the municipality is required under the service agreement to make, or cause to be made, to the private contractor, including payments made by third parties to the private contractor for products or services and credited against payments the municipality otherwise would have to make or cause to be made under the service agreement; (g) "user" means the municipality and all other persons who use the capital intensive public service furnished by the private contractor. L. 1990, ch. 64, § 1; July 1.

K.S.A. 12-5502 Same; contract with private contractor.

12-5502. Same; contract with private contractor. Any municipality may contract with a private contractor to furnish in accordance with a service agreement any capital intensive public service which the municipality is authorized by law to furnish and for that purpose a municipality may exercise any and all of the powers provided in this act. L. 1990, ch. 64, § 2; July 1.

K.S.A. 12-5503 Same; service agreement; term; service fee; limitations.

12-5503. Same; service agreement; term; service fee; limitations. (a) Subject to provisions contained in this act, a municipality may enter into a service agreement for a term not to exceed 30 years. However, the service agreement may permit the municipality either to extend or renew the term of the service agreement, so long as the municipality is not bound under the service agreement for an extended period or renewal period of more than 30 years. Under the service agreement, the municipality may: (1) Obligate itself to pay or cause to be paid a service fee for the availability and use of the capital intensive public service to be furnished under the service agreement; (2) enter into other agreements relating to the services to be provided which the municipality considers appropriate and which are not otherwise contrary to law; and (3) either pledge its full faith and credit or obligate a specific source of payment for the payment of the service fee. (b) The obligation of the municipality to pay the service fee under the service agreement shall not be within any statutory limitation on the bonded indebtedness of the municipality. The amount of money to be paid by a municipality pursuant to a service agreement shall not exceed 5% of the bonded debt limit of the municipality. L. 1990, ch. 64, § 3; July 1.

K.S.A. 12-5504 Same; proposals; public hearing, feasibility analysis; protest petition.

12-5504. Same; proposals; public hearing, feasibility analysis; protest petition. (a) Any municipality considering the privatization of a public service as provided by this act shall prepare a request for proposals which shall describe the public service and related facilities under consideration for performance by contract. A notice of such request for proposals shall be published once in the municipality's official newspaper at least 30 days prior to any action thereon. Any person who expresses in writing an interest in submitting a proposal shall be provided such performance specifications, terms and conditions and other information as deemed advisable by the municipality to facilitate the submission of a comprehensive proposal. (b) Upon receiving one or more proposals to provide a capital intensive public service, the municipality may negotiate the detailed provisions of a proposed service agreement with any private contractor or contractors whom the municipality determines would provide the proposed service in an efficient and effective manner. Following such negotiations, and the development of a proposed service agreement, a public hearing shall be held not sooner than 10 days following publication of a notice thereon, giving the date, time and place and specifying the general purpose of the public hearing. At the time of the hearing, a feasibility analysis prepared by the municipality shall be made available, which includes a comparative analysis of the costs of the service if provided directly by the municipality or by a private contractor. In addition, a feasibility analysis shall be obtained from the Kansas department of health and environment as to any proposed service agreement affecting solid waste or water. (c) No agreement shall be entered into under the provisions of this act unless the governing body of the municipality shall find, by resolution, following the public hearing, that the proposed service agreement is in the public interest and would provide the public service in an efficient and effective manner, at a cost that would not exceed the cost if the municipality had directly provided such service, and specifying its intent to enter into the agreement, the nature and purpose of the agreement and the estimated annual service fee to be paid from public funds to the contractor under the agreement. (d) If the estimated annual payment under the agreement exceeds 3% of the total amount budgeted by the municipality for expenditure during the current year, excluding debt service, such resolution shall be published once each week for two consecutive weeks in a newspaper of general circulation within the municipality. If within 30 days of the last publication, a petition signed by at least 5% of the qualified electors is filed with the county election officer of the county in which such municipality is located requesting an election on the proposal no service agreement shall be entered into unless the proposal is submitted to and approved by a majority of the qualified electors of the municipality at an election thereon. Such election shall be called and held in the manner provided by K.S.A. 10-120 , and amendments thereto. L. 1990, ch. 64, § 4; July 1.

K.S.A. 12-5505 Same; service fee, payment of; taxes, fees, charges, special assessments.

12-5505. Same; service fee, payment of; taxes, fees, charges, special assessments. For the payment of a service fee or other monetary obligation under an existing service agreement or in anticipation of need under a future service agreement, the municipality may levy property taxes, impose fees and charges, levy special assessments, exercise any other revenue producing authority granted to it by law and apply public funds therefor in the same manner, and subject to the same conditions and limitations, that would apply if the related facilities necessary to provide the public service were acquired, constructed, owned and operated exclusively by the municipality. L. 1990, ch. 64, § 5; July 1.

K.S.A. 12-5506 Same; sale or lease of land and facilities; bonds, loans, grants; eminent domain, prohibited.

12-5506. Same; sale or lease of land and facilities; bonds, loans, grants; eminent domain, prohibited. The municipality, in compliance with the service agreement, may sell or lease to the private contractor or any other municipality, on terms and conditions as the municipality considers appropriate, any existing related facilities, including land owned by the municipality. The municipality also may issue bonds, borrow money and accept grants for the acquisition of land or related facilities, to the extent and in the manner otherwise authorized by law, but no such land or facilities shall be sold or given to the private contractor. Nothing in this act shall authorize a municipality to acquire land by eminent domain for sale or gift to a private contractor. L. 1990, ch. 64, § 6; July 1.

K.S.A. 12-5507 Same; service agreement, terms relating to ownership of property; default.

12-5507. Same; service agreement, terms relating to ownership of property; default. The agreement shall specify the title and ownership of all property involved in providing the public service, including any property owned by the municipality to be used by the private contractor. The service agreement may contain provisions under which title to any land, equipment or facilities in the name of the private contractor shall vest in or revert to the municipality, including provisions to be implemented if the private contractor defaults under any specified provisions in the service agreement. The municipality may acquire or reacquire any facility and terminate the service agreement in accordance with its terms, notwithstanding that the service agreement may constitute an equitable mortgage. L. 1990, ch. 64, § 7; July 1.

K.S.A. 12-5508 Same; contractor's exclusive right to provide service.

12-5508. Same; contractor's exclusive right to provide service. The municipality may agree that the sole and exclusive right to provide the capital intensive public service within its jurisdiction be assumed by the private contractor under the service agreement in the same manner and subject to the same limitations and conditions that would apply if the capital intensive public service and related facilities were acquired, constructed, owned and operated exclusively by the municipality. L. 1990, ch. 64, § 8; July 1.

K.S.A. 12-5509 Same; property tax exemption; reduction of payments.

12-5509. Same; property tax exemption; reduction of payments. All real and personal property used for the performance of a public service may be exempt from ad valorem taxation to the extent such property is used exclusively for the performance of such public service. If any portion of the facility, title to which is vested in the private contractor, provides direct revenue to the private contractor in addition to payments from the municipality, that revenue producing portion of the property shall be assessed and taxed as any other property. Any direct revenue of the private contractor used to reduce payments required of the municipality, such as may occur in the sale of recycled materials, shall be considered as a payment from the municipality. L. 1990, ch. 64, § 9; July 1.

K.S.A. 12-5510 Same; this act not exclusive authority for privatization.

12-5510. Same; this act not exclusive authority for privatization. The provisions and authority provided by this act shall be in addition to and supplemental to any other authority conferred by law or the constitution of the state of Kansas, and nothing herein shall be construed as requiring a municipality to conform to its provisions unless the governing body thereof elects to provide for the privatization of a public service in conformance with this act. L. 1990, ch. 64, § 10; July 1.

K.S.A. 12-5511 Same; interlocal cooperation; joint agency.

12-5511. Same; interlocal cooperation; joint agency. Any municipality which has entered into or proposes to enter into a service agreement under the provisions of this act also may enter into related service agreements with one or more other municipalities or with a joint agency created under the provisions of the interlocal cooperation act. Any such joint agency shall have the same powers provided a municipality under this act. L. 1990, ch. 64, § 11; July 1.

Source: Kansas Office of Revisor of Statutes (ksrevisor.gov)URL: https://www.ksrevisor.gov/statutes/ksa_ch12.htmlFetched: 10/20/2026