Ariz. Rev. Stat. § 48-2029 – Alternate methods of dissolution of sanitary district

A. A sanitary district organized under this article, the territory of which is wholly or partially included within the corporate limits of a city or town, may be dissolved in the following manner provided the dissolution is approved by a resolution or ordinance passed by the board of directors of the sanitary district and by the governing body of the city or town:
1. 1. The board of directors of the sanitary district shall approve the transfer of all powers, duties and responsibilities of the board of directors, officers and employees of the sanitary district to such city or town, as trustee, and the dissolution of the district by ordinance or resolution.
2. 2. The governing body of such incorporated city or town shall approve the dissolution of the district and the acceptance of the trusteeship of the district by ordinance or resolution.
3. 3. Within thirty days after the date of the passage of the latter of the ordinances or resolutions called for in paragraphs 1 and 2 of this subsection, the governing body of the city or town shall call a special election of the city or town on the question of whether to accept the trusteeship of the sanitary district. The election shall take place on such date as the governing body may designate but not more than sixty days after the ordinance or resolution calling the election is passed, except that no such election shall be called within twelve months from the date of a previous election called for the same purpose. Only qualified electors of the city or town shall vote on the question.
4. 4. When, on the basis of the adoption of the ordinances or resolutions under paragraphs 1 and 2 of this subsection, an election is called upon the question of acceptance of the trusteeship under paragraph 3 of this subsection, the governing body of the sanitary district shall also call, at the same time as the election provided for in paragraph 3 of this subsection is called, a separate election among the qualified electors of the sanitary district on the question of dissolution of the district. For the purposes of such election, a qualified elector of the district shall be a person who is qualified to vote at the election called pursuant to paragraph 3 of this subsection and who resides on property within the district.
B. If a majority of qualified electors of the city or town voting on the question approves it, and a majority of the qualified electors of the district voting on the question approves it, the district shall be dissolved as provided in this section. If the qualified electors voting in the election conducted pursuant to subsection A, paragraph 3 of this section fail to accept the trusteeship or if the qualified electors voting in the election conducted pursuant to subsection A, paragraph 4 of this section fail to approve dissolution, the sanitary district shall not be dissolved and the proceedings shall be terminated.
C. If the sanitary district has no bonded indebtedness or when all legal indebtedness of the district has been discharged or assumed by the city or town, after otherwise complying with the provisions of this section, the governing body of the city or town shall as trustees of the district by resolution declare the district dissolved, and thereupon the district shall be dissolved. A certified copy of the resolution shall, within three days after its adoption, be filed with the clerk of the governing body of the city or town in which the district is situated.
D. If the sanitary district has a bonded indebtedness or legal indebtedness following approval of dissolution, as herein before provided, the sanitary district shall be administered as provided by this section. Pending dissolution, the administration of district affairs shall vest in trust in the governing body of the city or town. Members of the governing body of such city or town shall be trustees of the district for all purposes of such district and as such have the powers and duties prescribed for the board of directors of the district organized pursuant to this chapter. Such trustees may, without limitation, except as provided by law and within this section, operate the facilities of the district and may issue and sell bonds previously authorized for improvements prior to dissolution of the district. Indebtedness and obligations of or issued by or on behalf of the district shall not thereby become indebtedness or obligations of such city or town, except that such city or town shall be responsible as trustees to insure that all obligations and debts of the district shall be paid when due from funds available to the trustees from the district. Until dissolution, nothing shall be deemed to preclude such a district from otherwise continuing to carry on its activities and transacting its business, or from entering into contracts and agreements otherwise authorized or from transferring any property of the district to such city or town.
E. Members of the board of directors, if the terms of such members have not expired, shall serve as an advisory board to the trustees created under subsection D of this section and to the governing body of the city or town following dissolution until expiration of the terms or earlier vacancy, and thereafter the office shall be deemed abolished.
F. Upon dissolution of the sanitary district pursuant to this section, all property of the district shall vest in that city or town.
G. Notwithstanding the provisions of section 9-514, the affirmative vote on dissolution of a sanitary district by both the district and the affected city or town under the provisions of this section shall vest in the city or town authority to construct, purchase, acquire or lease any plant or property for the purpose of sewage or garbage collection and treatment and shall also be authority for the city or town to assume the obligations of the sanitary district through the issuance of bonds pursuant to title 9, chapter 5, article 3 and in amounts not exceeding the outstanding amount of principal and interest on bonds and other obligations of the sanitary district and the costs of issuance of the bonds by such city or town.
H. The election held pursuant to this section shall be deemed to be the election required by section 48-2028.
I. The city or town accepting the assets of the sanitary district shall assume the operation and maintenance of the entire sanitary sewage collection, treatment and effluent disposal system external to its boundaries pursuant to title 9, chapter 5.
J. A sanitary district organized under this article which has territory partially within the corporate limits of two or more cities or towns and the unincorporated area of a county may be dissolved pursuant to this subsection provided the dissolution is approved by a resolution or ordinance passed by the board of directors of the sanitary district and by the governing body of each city or town.
1. 1. The board of directors of the sanitary district shall:
  1. (a) Approve the dissolution of the district by ordinance or resolution.
  2. (b) Apportion the assets of the district according to their geographic location.
  3. (c) Approve the transfer of such assets to the city or town within which the assets are located.
2. 2. Each city or town which has a portion of the territory of the district must pass a resolution approving the dissolution and accepting the assets and responsibilities of the district.
3. 3. The board of directors shall call a special election of the qualified electors of the district conducted in the manner prescribed by title 16. The question on the ballot shall read:
  Shall the ___________ sanitary district be dissolved?
  Dissolution - yes _______ Dissolution - No _______
4. 4. If a majority of the qualified electors voting at the election vote in favor of the dissolution of the district, the board of directors shall:
  1. (a) Order the dissolution of the district, specifying the date upon which the responsibilities and powers of the district and the assets shall vest with the city or town.
  2. (b) Approve the transfer of all powers, duties and responsibilities of the board of directors, officers and employees of the sanitary district to each city or town in which a portion of the district is located.
5. 5. The city or town which has the majority, by value, of the remaining assets shall, upon dissolution:
  1. (a) Assume the assets which are located within the unincorporated area of the county within the district.
  2. (b) Assume the operation and maintenance of the entire sanitary sewage collection, treatment and effluent disposal system external to its boundaries pursuant to title 9, chapter 5.
  3. (c) Provide sewer service within the unincorporated area including the construction and installation of new sewers and related facilities.
6. 6. If there is any bonded indebtedness of the district, the board of supervisors of the county shall provide for the continued collection of taxes or assessments pursuant to section 48-2028, subsection C.