## Facts

- Sanitation District No. 1 of Shelby County, Kentucky (the District) was created on February 28, 1974, under KRS Chapter 220 as a “political subdivision, or municipal corporation,” to provide sewer and sanitation improvements within Shelby County.
- Under KRS Chapter 220, the Secretary of the Natural Resources and Environmental Protection Cabinet (the Cabinet) is authorized to establish sanitation districts where needed, and the District is governed by a board of directors charged with controlling the District’s affairs and devising improvement plans.
- The statutory framework requires that improvement plans prepared by the District’s board be submitted to the Cabinet for approval (KRS 220.240), reflecting significant state-level oversight of district planning.
- The General Assembly later enacted KRS 220.035, which authorizes a county fiscal court to approve or disapprove a sanitation district’s proposed land acquisitions, capital improvements, and annual budget.
- The Fiscal Court of Shelby County enacted an ordinance stating its intent to exercise the approval powers described in KRS 220.035 with respect to the District.
- The District and its president, Loyd Cheak, sued Shelby County, its fiscal court, and county officials in Shelby Circuit Court seeking declaratory and injunctive relief, alleging KRS 220.035 was unconstitutional and that the fiscal court could not lawfully exercise the statute’s approval authority over the District.
- The circuit court entered judgment upholding the constitutionality of KRS 220.035.
- The District appealed to the Kentucky Court of Appeals.

## Issues

1. Whether KRS 220.035 violates Kentucky’s separation-of-powers provisions by giving a county fiscal court authority to approve or disapprove a sanitation district’s land acquisitions, capital improvements, and budget.
2. Whether, given the Cabinet’s statutory role in establishing sanitation districts and approving their plans, KRS 220.035 unlawfully transfers or shares executive authority with the fiscal court.
3. Whether the General Assembly may structure and revise the governance and oversight of a sanitation district (a political subdivision/municipal corporation) by conditioning specified district actions on fiscal-court approval.

## Decision

- The Kentucky Court of Appeals affirmed the Shelby Circuit Court.
- The court held KRS 220.035 is constitutional.
- The court upheld the fiscal court’s statutory authority, when exercised by ordinance, to approve or disapprove the District’s proposed land acquisitions, capital improvements, and budget.

## Legal Principles

- Sanitation districts created under KRS Chapter 220 are governmental entities (political subdivisions/municipal corporations) whose organization and powers are determined by statute.
- The General Assembly has authority to define, allocate, and modify the governance and oversight arrangements for statutory local governmental entities, so long as constitutional limits are not violated.
- A statutory scheme may assign a county fiscal court an approval role over certain financial and capital actions of a sanitation district without, by that fact alone, violating Kentucky’s separation-of-powers provisions.
- Continued Cabinet responsibilities—such as establishing districts and approving district plans under KRS 220.240—support the conclusion that KRS 220.035 does not strip the Cabinet of its statutory oversight role, but adds a county-level approval check for specified district actions.
- Historical inclusion of fiscal-court involvement within KRS Chapter 220’s overall framework supports legislative authority to continue or expand that local approval role through KRS 220.035.

## Conclusion

The Kentucky Court of Appeals upheld KRS 220.035 against a constitutional challenge, ruling that the General Assembly could require a sanitation district’s land acquisitions, capital improvements, and annual budget to receive county fiscal-court approval without violating Kentucky’s separation-of-powers provisions, and it affirmed judgment for Shelby County and its fiscal court.


Sanitation District No. 1 of Shelby County v. Shelby County, 964 S.W.2d 434 (1998)