Background:

Water-sewer districts provide water and sewer services to incorporated and unincorporated areas. The path to water-sewer district formation includes a petition, public hearing, resolution, and voter approval. A board of three or five elected commissioners serving staggered six-year terms manages each water-sewer district.

A city legislative authority may adopt a resolution or ordinance to assume jurisdiction of a water-sewer district when the entire district territory is included within the corporate boundaries of the city. All property, franchises, rights, assets, district-specific taxes levied and all other facilities and equipment of the water-sewer district become the property of the city upon assumption of the district. The city manages the district, including its facilities and equipment, and collects service charges from the properties served by the city. The city must honor or assume existing district debts.

A city may assume jurisdiction by ordinance over a portion of a water-sewer district located within its jurisdiction if the portion equals at least 60 percent of the district's total area or assessed real property valuation. Cities encompassing less than 60 percent of the district's total area and assessed real property valuation may assume jurisdiction of the district that is within its corporate city limits. In both situations, the city may assume responsibility for the management of the district's property, facilities and equipment throughout the entire district upon a favorable vote of all voters within the district.

If a water-sewer district includes more than one city, the city encompassing at least 60 percent of the district's assessed valuation may assume management responsibility over the district if the principal city has approval from the other city or cities included within the district. The other cities may install facilities and establish local improvement districts to pay for these facilities, which may be connected to the utility system operated by the principal city if they were installed in accordance with the principal city's standards. Customers generally pay the service charges established by the principal city.

Summary of Bill:

the territory of two or more cities or towns; or
one city or town and unincorporated territory.

The city or town and the water-sewer district must jointly contract for a feasibility study after the city or town passes a resolution to assume all or part of the district. The study must be completed within six months after the resolution is passed and address the impact of the proposed assumption on the city or town as well as the district. These findings must be made available to the public prior to voting on the assumption. These provisions are applicable to future water-sewer district assumptions as well as assumptions of water-sewer districts initiated and still pending as of the bill's effective date.

Once the voters in the district have approved or disapproved the ballot proposition regarding an assumption involving no more than one city or town, a boundary review board may not conduct a review of the assumption.

Alternatively, cities and towns may assume jurisdiction of a water-sewer district located within its boundaries without voter approval if the district board of commissioners agrees to the assumption. In this situation, a feasibility study is not required.

Existing interlocal agreements, franchises, or contracts between a city or town and a water-sewer district may not be preempted or modified by any of these provisions.