A.R.S. tit. 48 ch. 14 — Arizona Revised Statutes Title 48 Chapter 14 — Sanitary Districts

48-2001. Establishment of sanitary district; territory; purposes; change of name A. Notwithstanding the provisions of section 48-261 or 48-262, a sanitary district shall not include territory located within an incorporated city or town at the time the district is established and the territory included in a sanitary district is required to be contiguous except as provided in section 48-2002. B. In addition to the requirements set forth in section 48-261, a sanitary district may be formed only for: 1. The purposes of regulating, purchasing, establishing, constructing and operating a sewerage system or a sewage sludge or by-product processing and disposal system which is owned by the district or any person and which provides for sewage collection, treatment and disposal in the district. The system may include the collection, transportation, pumping, treatment and disposal of sewage, processing, treating and disposing of sewage sludge and other by-products of sewage treatment. 2. Purchasing, establishing, constructing and operating a garbage disposal and treatment system. The garbage system shall be limited to the disposal and treatment of garbage, rubbish, trash and waste materials and shall not include collection. C. In addition to the requirements set forth in sections 48-261 and 48-262, no territory which lies within an urbanized area, as defined in section 9-101.01, shall be included in or annexed to a sanitary district unless the city or town shall have approved the inclusion or annexation of said territory into the sanitary district, or, upon request of the parties seeking annexation or inclusion of territory within the sanitary district, the city or town has failed to act upon such request and either approve or deny the request within one hundred twenty days of its presentation to the city or town. D. A sanitary district established under this chapter is a body corporate with the powers, privileges and immunities generally granted to municipal corporations by the constitution and laws of this state for the purposes prescribed by this chapter. E. A sanitary district may change its name by resolution unanimously adopted by its board of directors. Before adopting a resolution to change the name of the district, the board shall give notice to all residents and property owners within the district by publication of the notice at least twenty days before the date of the hearing of the board at which the name change will be considered. The notice shall be placed in a newspaper of general circulation within the district. The district shall also mail to each customer of the district within the district a notice of name change at least thirty days before the hearing on the change of name. At the hearing the customers and landowners shall be entitled to be heard as to why the name should or should not be changed. Following the hearing the board shall act on the resolution changing the name of the district. 48-2001.01. Merger of sanitary districts; hearing; election; joint meeting; resolution A. For any two or more sanitary districts that are proposed to merge, the county board of supervisors shall hold a hearing on the proposed merger if either of the following applies: 1. The county board of supervisors has received a petition containing the signatures of at least twenty-five per cent of the qualified electors in each of the affected districts and proposing the merger of the sanitary districts. The county board of supervisors shall verify the petitions in the same manner provided in section 48-903 and shall hold a public hearing on the merger at a time and place determined by the county board of supervisors. 2. The board of directors of each of the affected sanitary districts has adopted by a two-thirds vote a resolution requesting the merger of the districts and each has filed that resolution with the county board of supervisors. On receipt of the resolutions, the county board of supervisors shall hold a public hearing on the merger at a time and place determined by the county board of supervisors. B. The petition or resolutions shall contain the name and a description of the boundaries of the proposed district and a detailed, accurate map of the area to be included in the district and shall specify that the proposed district will be administered by a district board. No new territory may be included as a result of the merger, but the merged district may thereafter expand as provided in this chapter. C. If the proposed district is located in more than one county, the petition or resolutions shall be submitted to the board of supervisors of the county in which the majority of the assessed valuation of the proposed merged district is located. The boards of supervisors of any other counties in which the affected districts are located shall provide information and assistance to the responsible board of supervisors. D. If the county board of supervisors determines after a public hearing that the proposed merger would serve the public convenience, welfare or necessity, the county board of supervisors shall call an election for a vote of the public on the question of the merger of the sanitary districts. The board of supervisors shall not call an election to merge sanitary districts more frequently than once every two years. The order shall not be entered until the petitioners or the boards of directors of the sanitary districts have deposited with the board of supervisors sufficient monies, not exceeding one thousand dollars, to defray the expense of the election. These monies shall be paid out on the order of the board of supervisors. If the sanitary districts are merged, the depositors of these monies shall be reimbursed from the merged sanitary districts' monies. Whether or not the districts are merged, the sanitary districts shall reimburse the county for the expenses of the election. E. For any election called pursuant to this section, the words appearing on the ballot shall be "(insert sanitary districts' names) merge as a sanitary district -- yes" and "(insert sanitary districts' names) merge as a sanitary district -- no". F. Within fourteen days after the election, the board of supervisors shall meet and canvass the returns, and if it is determined that a majority of the votes cast at the election in each of the affected districts is in favor of merging the sanitary districts, the board shall enter that fact on its minutes. G. If the proposal for merger is approved as provided in subsection F of this section, the governing body of the affected district with the largest population shall call a joint meeting of the governing bodies of the affected districts. At the joint meeting, a majority of the members of the governing body of each affected district constitutes a quorum for the transaction of business. The members of the governing bodies of both districts shall appoint a total of at least five persons from all of those currently serving on the governing bodies of both of the districts, each of whom shall complete their regular terms of offices, except that no more than a simple majority of the persons appointed may serve terms that end in the same year. No more than a simple majority may be appointed from the same sanitary district board, and the majority of the merged board shall be filled by board members from the district that has the greater number of customers. The appointed board shall immediately meet and organize itself and elect from among its members a chairperson. The appointed board by resolution shall declare the districts merged and each affected district joined. The resolution and the names of the newly organized board members shall be sent to the county board of supervisors within thirty days after organization and a certified copy of the resolution and the legal description of the merged district shall be recorded in each county in which the district exists and sent to the director of the Arizona state retirement system, if either district was an Arizona state retirement system employer before the merger. From the date of the recording of the resolution of merger and legal description of the district by the appointed board, the merger is complete. The merged district shall assume any debt of each of the affected sanitary districts. Subsequent terms of office for district board members shall be filled by election of board members who shall be qualified electors from the merged district. H. Section 48-262 does not apply to a merger of sanitary districts under this section. 48-2002. Annexation of noncontiguous property A. If the statement described in section 48-262, subsection A requests the annexation of property located within an incorporated city or town but not encompassing all the territory within the boundaries of the city or town, in addition to the other requirements of section 48-262, subsection A, the governing body shall approve the district boundary change impact statement and authorize the circulation of petitions only if the governing body of the city or town has by ordinance or resolution endorsed the annexation and the annexation is authorized pursuant to this title. B. The area within the proposed change does not have to be contiguous to any boundary of the sanitary district to which it is annexed provided that the property between the sanitary district and the proposed area to be annexed belongs to the United States, the state of Arizona or the county wherein the district lies, or is a parcel or parcels of undeveloped land which is not susceptible of feasibly being provided sewer service by any other public or private entity presently providing such sewer service within five miles from the location of the property. The sanitary district may pay the costs of the extension of its sewer lines across the intervening public land not within the sanitary district. The extension shall occur at the discretion of the board. C. In addition to the provisions of subsection A of this section, if the noncontiguous property to be annexed is within an urbanized area, the governing body shall obtain the approval, by resolution, from each city or town adjacent to or near by the urbanized area prior to the urbanized area's annexation. For the purposes of this subsection, "urbanized area" means the area within three miles of a city or town with a population of less than five thousand persons according to the most recent United States decennial census or within six miles of a city or town with a population of five thousand persons or more according to the most recent United States decennial census. 48-2003. Annexation of all the territory within a city or town A. Notwithstanding section 48-2002, if a city or town desires to have annexed all the territory located within such city or town, or if a portion of the city or town lies within the sanitary district, the remaining territory within such city or town, to a sanitary district, and the sanitary district, by resolution duly adopted by the board of directors, desires to annex such territory, the annexation shall be as set forth in this section. B. The sanitary district shall first adopt a resolution setting forth its intention to annex all or the remaining portion of the territory within the corporate boundaries of a city or town. Thereafter, the city or town council may call an election of the qualified electors within the city or town not residing within the area presently within the sanitary district to vote on the question of whether the territory contained in such city or town shall be annexed to the sanitary district. The election shall be conducted and held in substantially the same manner as an election held pursuant to section 9-514. C. If a majority of the qualified electors voting at the election votes in favor of the annexation, as evidenced by the official canvass, the board of directors of the sanitary district by resolution may declare and order the territory included within the boundaries of the city or town annexed to the sanitary district. D. On annexation of all of the territory included within a city or town to a sanitary district, the sanitary district has all of the powers and authority over such territory as it has over any other territory within a sanitary district and the city or town shall not authorize, institute, establish, make or carry on a competing sewer service nor engage in the collection or treatment of sewage within the city or town. 48-2010. Board of directors; qualifications; term; appointment; election; conversion; reorganization; compensation; expenses A. A sanitary district having an area of one hundred sixty acres or more shall be governed by a board of directors with not less than three members. Members of the board of directors shall be qualified electors of the district. Immediately after the first regular election held subsequent to the enactment of this section by a sanitary district organized and existing prior to such enactment, the directors shall meet and divide themselves by lot into two classes as nearly equal in number as possible. Directors of the first class shall serve for a term of four years, and directors of the second class for a term of two years, and until the directors' successors are elected and qualified. Thereafter at each regular election one director for each expired term shall be elected, and shall hold office for a term of four years, and until the director's successor is elected and qualified. The dates of elections and of expiration of terms of the initial directors shall be specified in the petition for establishment of the district. Except for an election to reorganize a sanitary district, candidates for directors shall file nominating petitions with the board of supervisors as prescribed by title 16, chapter 3. If only one person files or no person files a nominating petition for an election to fill a district office, the board of supervisors may cancel the election for the position and appoint the person who filed the nominating petition to fill the position. If no person files a nominating petition for an election to fill a district office, the board of supervisors may cancel the election for that office and that office is deemed vacant and shall be filled as otherwise provided by law. A person who is appointed pursuant to this section is fully vested with the powers and duties of the office as if elected to that office. B. A director who resides in an area which is deleted from the sanitary district during the director's term of office shall continue to serve until the next regular election, and until the director's successor is elected and qualified. If the director's term does not expire at that time, a new qualified director shall be elected to serve out the unexpired portion. C. A sanitary district having an area of less than one hundred sixty acres shall be governed by the board of supervisors of the county in which the district is located, and the board of supervisors shall be the board of directors of the district. On receipt of a petition that contains the signatures of twenty-five per cent or more of the qualified electors residing in the district that are verified by the county recorder and that requests that the district be converted and administered by its own board of directors, the board of supervisors shall call an election on the conversion of the sanitary district. The election may be held on any consolidated election date as prescribed in section 16-204. The sanitary district shall reimburse the county for the expenses of the sanitary district election. The petition for the conversion of the district shall specify either three or five as the number of directors for the converted sanitary district. The board of supervisors shall give notice of the election by posting copies of the order of election in three public places within the district not less than twenty days prior to the date of the election and if a newspaper is published within the county having a general circulation within the district, the order shall be published in the newspaper not less than once a week during each of the three calendar weeks preceding the calendar week of the election. The ballot for the election shall state "convert from a sanitary district administered by the county board of supervisors to a sanitary district administered by a local board of directors consisting of (insert three members or five members, as appropriate) - yes", "convert from a sanitary district administered by the county board of supervisors to a sanitary district administered by a local board of directors consisting of (insert three or five members, as appropriate) - no". The ballot shall also allow each elector to indicate the elector's choice for board members in the event of conversion. Within twenty days after the election, the board of supervisors shall meet and canvass the returns, and if it is determined that a majority of the votes cast at the election were in favor of converting the sanitary district, the board shall enter that fact on its minutes, declare the district duly converted and announce the names of those elected to the district board. D. The board of supervisors shall make an order calling an election to decide whether to reorganize a sanitary district that has a board consisting of three members as a sanitary district that has a board consisting of five members when a petition containing the signatures of twenty-five per cent of the qualified electors residing within the district and requesting that the district be reorganized is filed with the board except the board of supervisors shall not call for a reorganization election to expand the number of directors on the district board more frequently than once every two years. The election may be held on any consolidated election date as prescribed in section 16-204. The sanitary district shall reimburse the county for the expenses of the sanitary district election. The board of supervisors shall give notice of the election by posting copies of the order of election in three public places within the district not less than twenty days prior to the date of the election and if a newspaper is published within the county having a general circulation within the district, the order shall be published in the newspaper not less than once a week during each of the three calendar weeks preceding the calendar week of the election. The ballot for the election shall state "shall the current three member sanitary district board be reorganized to a five member board - yes or no". The ballot shall also allow each elector to indicate the elector's choice for two additional board members in the event of reorganization. Within twenty days after the election, the board of supervisors shall meet and canvass the returns, and if it is determined that a majority of the votes cast at the election were in favor of reorganizing the sanitary district as a district with a five member board, the board shall enter that fact on its minutes, declare the district duly reorganized and announce the names of those elected to the district board. E. Each director of a sanitary district shall receive not more than one hundred fifty dollars per month or a lesser amount as set by the board of directors of the district plus necessary traveling expenses, but members of the board of supervisors when serving as directors of a sanitary district shall receive no compensation for attending meetings but shall be reimbursed for their necessary expenses. No director shall receive compensation, other than expenses, for attending more than four meetings of the board during a calendar month. F. For a district that is not governed by the board of supervisors, if a vacancy occurs on the district board due to death, disability, resignation or any other cause, the board of directors of the sanitary district shall appoint a qualified elector of the district to fill the office for the remaining portion of that term, except that if the remaining directors do not constitute a quorum, the county board of supervisors shall make the appointment to fill the vacancy. 48-2011. Powers of sanitary district In addition to the powers specifically granted, a sanitary district, acting through its board of directors, may: 1. Construct, maintain and operate within or without the district a sewerage system and necessary sewage disposal and treatment plants. 2. Construct, maintain and operate within or without the district garbage disposal and treatment plants for the treatment and disposal of garbage, trash, rubbish, sewage sludge and waste materials. 3. Acquire in the name of the district any real or personal property or interest therein by gift, purchase, condemnation or otherwise, and own, control, manage or dispose of such property or interest when necessary or convenient for the purposes stated in paragraphs 1 and 2. Private funds or contributions received by a sanitary district for the purpose of defraying expenses of work done under its direction may be expended by the district in compliance with the terms and conditions under which such funds are received, provided the terms and conditions meet the approval of the board of directors of the district and are within the scope of the statutory powers and duties of the district. 4. Join with any other sanitary district, municipality, governmental agency or private entity in the construction, maintenance, operation or financing of a sewerage collection system or sewage disposal or treatment plant, or garbage disposal or treatment plant, either within or without the district, but no sewage disposal or treatment plant or garbage disposal or treatment plant shall be constructed or maintained within an incorporated city or town or within one-half mile thereof without the consent of the governing body of the city or town, as evidenced by a duly adopted resolution of the governing body. 5. Sell, lease or otherwise dispose of any property of the district or interest therein when such property is no longer required for the purposes of the district or when use of it may be permitted without interfering with the use to which it is put by the district. 6. Sell, process, treat, deliver, provide facilities for delivering or otherwise dispose of fertilizer or other by-product resulting from operation of a sewerage system or sewage disposal or treatment plant, sewage sludge disposal or treatment plant or garbage disposal or treatment plant. 7. Construct, maintain and operate pipelines, treatment, manufacturing and delivery facilities and other facilities necessary for purposes described by paragraph 6, or for the purpose of conserving and beneficially using sewage sludge and by-products recovered in sewerage operations by sale or disposition thereof for agricultural, residential, domestic or industrial purposes, or by discharge of water or effluent in a manner that it will discharge into existing watercourses or percolate into underground gravels and replenish water resources. 8. Pay expenses incidental to the exercise of its powers. 9. Employ sanitation experts, engineers, administrators, surveyors, counsel and other persons as are necessary in the exercise of its powers. 10. Formulate and adopt rules governing installation, use and maintenance of private sewer disposal systems within district boundaries, whether on private land or public rights-of-way, and connections to the sewer lines of the district and connections without the limits of an incorporated city or town to sewer lines which connect to sewer lines of the district. 11. Require permits for any and all connections described by paragraph 10 and for installation and maintenance of private sewage disposal systems. 12. Formulate and adopt rules governing: (a) The operation and utilization of the garbage disposal or treatment plants of the district. (b) Disposing of and using sewage sludge and other by-products of the sewage treatment process. 13. Enter into intergovernmental agreements pursuant to title 11, chapter 7, article 3 with the department of environmental quality for the department to provide technical and administrative services, collection of fees and cooperation in enforcing laws and rules of each party to the agreement concerning the design, construction, operation and maintenance of all existing and proposed on-site wastewater treatment facilities and private sewage disposal systems within the boundaries of the district. 14. Bring an action for injunction or any other civil action against any person who violates this chapter or rules adopted pursuant to this chapter. 15. Develop, manage and enforce an on-site sewage disposal management plan. 16. Investigate and formulate rules governing effluent disposal by sanitary treatment and effluent disposal facilities in the district. 17. Sue and be sued. 18. Manage and conduct the business and affairs of the district, and do all other things incidental to exercising the powers granted by this article, including increasing or decreasing the number of board members, as long as there are not less than three members. 48-2011.01. Wastewater treatment facility and nonpoint source projects; financial assistance loan repayment agreements; definition A. Notwithstanding any other law, a sanitary district may construct or improve a wastewater treatment facility or nonpoint source project with monies borrowed from or financial assistance provided by the water infrastructure finance authority of Arizona. B. To repay financial assistance from the water infrastructure finance authority of Arizona, a sanitary district may enter into a financial assistance loan repayment agreement with the authority. A financial assistance loan repayment agreement is payable from any revenues otherwise authorized by law to be used to pay long-term obligations, including a special assessment on a designated area that is levied and collected pursuant to article 2 of this chapter. C. The board of directors shall submit the question of entering and performing a financial assistance loan repayment agreement to the qualified electors in the district. Elections under this subsection must be held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d). An election is not required if the financial assistance provided by the water infrastructure finance authority of Arizona is for the purpose of planning and designing the purchase of or an improvement to the system or if voter approval has previously been obtained for substantially the same project with another funding source or if the project is constructed with an assessment levied against a designated area pursuant to article 2 of this chapter. If a majority of the qualified electors voting on the question: 1. Approves, the board of directors may execute, deliver and perform the financial assistance loan repayment agreement. 2. Disapproves, the board of directors shall not execute a financial assistance loan repayment agreement. D. A financial assistance loan repayment agreement entered into pursuant to this section shall contain the covenants and conditions pertaining to the construction of a wastewater treatment facility or nonpoint source project and repayment of the loan as the water infrastructure finance authority of Arizona deems proper. Financial assistance loan repayment agreements may provide for the payment of interest on the unpaid principal balance of such agreement at the rates established in the agreement. The agreement may also provide for payment of the sanitary district's proportionate share of the expenses of administering the clean water revolving fund established by section 49-1221 and may provide that the sanitary district pay financing and loan administration fees approved by the water infrastructure finance authority. These costs may be included in the levy or assessment amounts pledged to repay the financial assistance. Districts are bound by and shall fully perform the loan repayment agreements, and the agreements are incontestable after the loan is funded by the water infrastructure finance authority of Arizona. The sanitary district shall also agree to pay the authority's costs in issuing bonds or otherwise borrowing to fund a loan. E. A financial assistance loan repayment agreement under this section does not create a debt of the sanitary district, and the authority shall not require that payment of a loan agreement be made from other than those sources permitted in subsection B of this section. F. A sanitary district may employ or contract for the services of attorneys, accountants, financial consultants and such other experts in their field as deemed necessary to perform services with respect to the financial assistance loan repayment agreement. Charges for these services may be included in the assessment amounts pledged to repay the loan. G. This section is supplemental and alternative to any other law under which a sanitary district may borrow money or issue bonds. This section shall not be construed as the exclusive authorization to enter into loan agreements with the authority. H. Any financial assistance loan repayment agreement between the district and the water infrastructure finance authority of Arizona may be secured by unpaid assessments certified in the manner prescribed by section 48-2067. The financial assistance loan repayment agreement may provide for different due dates for annual installments of principal, different interest payment dates, different dates of delinquency and different dates for holding sales of delinquent properties than otherwise provided for in article 2 of this chapter. The financial assistance loan repayment agreement may also provide for mailed notice to property owners in lieu of the publication requirement prescribed by sections 48-2068 and 48-2069. I. A district may borrow additional monies or enter into additional financial assistance loan repayment agreements with the water infrastructure finance authority in an amount up to the amount approved pursuant to subsection C of this section less the amount that the district is obligated to repay to the water infrastructure finance authority pursuant to a financial assistance loan repayment agreement. J. For the purposes of this section, "nonpoint source project" has the same meaning prescribed in section 49-1201. 48-2011.02. Wastewater treatment facility revenues; use A. Notwithstanding any other provision of this chapter, the board of directors of a sanitary district may obligate by resolution or by contract the revenues generated by any wastewater treatment facility or system of the district and take any and all other actions incidental as are necessary to do any of the following: 1. Pay all maintenance and operating costs of the district. 2. Provide such reserves as deemed necessary by the board of directors. 3. Pay all billing costs, office expenses and the costs of collection. 4. Plan and design the purchase of or an improvement to the system or pay contractual obligations incurred for that purpose. B. Notwithstanding any other provision of this chapter, at the option of the board of directors, revenues in excess of the requirements of subsection A of this section may be used for either or both of the following: 1. Applied to assessments due. 2. Refunded to the property owner. C. An obligation of revenues by the district that is made pursuant to this section is binding on all successors or assigns until the obligation is fully satisfied. 48-2011.03. Issuance of bonds; notice; hearing Notwithstanding any other law, a sanitary district may issue bonds that refinance existing debt and that mature over a period of forty-one years only if the sanitary district complies with both of the following before issuance of the bonds: 1. The new bonds do not cause an increase in the sanitary district's bonding capacity. 2. The sanitary district's board of directors holds a public hearing regarding the issuance of the bonds. The sanitary district's board of directors shall provide public notice of the hearing as otherwise prescribed by law. 48-2012. Rights of way A right of way in or across public property, highways or streets within a sanitary district is granted to the district whenever found by the board of directors to be necessary or convenient for performing any work authorized by this article. 48-2013. Compulsory connection; financial assistance A. The board of directors of a sanitary district may declare further maintenance or use of a cesspool, septic tank or other local means of sewage disposal within the district a public nuisance and abate them. B. The board may require any building within the district inhabited or used by human beings to be connected with the sewerage system of the district. C. Before the time any fee, levied under section 48-2027, or assessment, levied under section 48-2057, is due, the board shall receive and consider applications from individual lot or parcel owners for financial assistance in paying connection fees, hookup fees and capacity charges. The application shall be in a form approved by the board and the applicant shall provide reasonable evidence that the applicant lacks the financial capability to pay the connection fees, hookup fees and capacity charges. The board shall appropriate monies from any source to provide assistance for any person by having the sanitary district pay the individual fees and have the applicant provide an instrument, secured by an encumbrance on the applicant's property, which provides for repayment to the sanitary district of the monies paid by the district. This subsection applies only to applicants who own fewer than three parcels or lots within the district. 48-2014. Lateral and collecting lines A. The construction of main lines of the sewerage system of a sanitary district shall be paid for from the proceeds of the sale of bonds of the district, but the construction of lateral and collecting lines shall be paid for by the connecting property owners if the owners have agreed to connection to the lateral or collecting lines or if the board of directors has determined that the connection to these lines is necessary pursuant to section 48-2013. The payment for lateral and collecting lines may be pursuant to article 2 of this chapter. Determination by the board of directors of what are main lines is conclusive. B. Connection of lateral or collecting lines to main lines shall be made at the points and in the manner directed by the engineer of the district, under the instructions of the board of directors, subject to such conditions as the board of directors prescribes. 48-2015. Sanitation survey, plan and report A. When a sanitary district is established, or at any time before issuing and selling bonds under this article, the board of directors shall employ one or more sanitation or water engineers for any of the following purposes: 1. To make a survey of the problems of the district concerning sanitation with special reference to sewage collection, treatment and disposal. 2. To make a survey of the problems of the district concerning sanitation with special reference to garbage treatment and disposal. B. Upon completion of the survey or plan, the engineers shall prepare and file with the board of directors a report setting forth: 1. A description of existing facilities. 2. A description of work recommended to carry out the purposes of the district, with plans and specifications therefor. 3. A description of the property proposed to be acquired or damaged in performing the work. 4. A map showing the boundaries of the district and in general the location of work proposed to be done, property taken or damaged and other information useful to an understanding of the proposed work. 5. An estimate of the cost of the proposed work. C. Expenses of the survey and report shall be a charge against the district. 48-2016. Sanitation survey report; hearings; approval A. When the survey or plan and report prepared under section 48-2015 are filed, the board of directors may reject the report and direct that a new report be prepared or that changes be made. If the report complies with the provisions of section 48-2015 and is satisfactory to the board, the board shall hold a hearing on any objections to the report or to the performance of the proposed work. Notice of the hearing shall be given by publication five times in a daily or twice in a weekly newspaper of general circulation in the sanitary district. B. At the conclusion of the hearing the board shall order the report to be changed, or shall approve it as made. If changes are ordered, further hearings shall be held thereon until the board approves the report. Upon approval by the board, the report or a resume thereof shall be published for distribution to the public. 48-2017. Election to determine whether sewer service to be supplied other than by construction of facilities by district If the engineer's report required by this article recommends that sewer service or garbage disposal and treatment service for the sanitary district can be provided by a method other than construction of facilities by the district or the maintenance of an on-site sewage disposal management plan and the board of directors of the district desires to adopt such method and enter into a contract with another sanitary district, a municipality, other governmental subdivision or agency or a private entity for sewer service or garbage disposal and treatment service for the district, the board shall submit to the qualified electors of the district who are eligible to vote in bond elections the question of whether the district shall enter into such a contract for sewer service or garbage disposal and treatment service. The proposition of whether sewer service or garbage disposal and treatment service for the district shall be provided by contract may be submitted to the qualified electors of the district in a separate election called for that purpose or in conjunction with a bond election called pursuant to this article, or as an alternate proposition to the issuance of bonds by the district. Any election called pursuant to this section shall be called and held as provided in section 48-2020. 48-2018. Performance of work; methods; calls for bids; modification of specifications A. The board of directors shall employ qualified water or sanitation engineers necessary to superintend the performance of work specified in the approved report of the survey or plan. The work or any portion thereof may be performed, under the direction of the engineers employed for that purpose, in any of the following ways, as ordered by the board of directors: 1. By purchasing the material and performing the work. 2. By purchasing the material and letting a contract for performance of the work. 3. By purchasing a portion or none of the material and letting a contract for furnishing the balance or all of the material and performance of the work. B. A contract for performance of work or for furnishing material shall be let to the lowest responsible bidder submitting a sealed bid in response to a call for bids published once each week for two consecutive weeks in a newspaper of general circulation in the county. The call for bids shall include detailed plans and specifications covering the work to be done and the materials to be furnished. If materials to be purchased without the letting of a contract cost ten thousand dollars or more, they shall be purchased from the lowest responsible bidder after publication of a call for bids as provided by this subsection. C. All work recommended in the approved report shall be performed in conformity with the plans and specifications contained in the report unless the board of directors by a two-thirds vote adopts a resolution declaring that the interest of the district requires a modification of or departure from the report, and specifying the modification or departure. 48-2019. Elections Elections held pursuant to this article, except as otherwise specified, shall be conducted in the manner prescribed by title 16. 48-2020. Bond election; subsequent bond election A. After approval of the survey or plan and report prepared under section 48-2015 the board of directors of the district shall submit to the qualified electors of the district the proposition of incurring bonded indebtedness to obtain funds with which to acquire the property and perform the work set forth by the report. An election under this subsection must be held on the first Tuesday following the first Monday in November as prescribed by section 16-204, subsection B, paragraph 1, subdivision (d). The resolution calling the election shall set forth: 1. The purposes of the proposed indebtedness. 2. A reference to the report for particulars. 3. The amount of the proposed indebtedness. 4. The part of the principal to be paid each year. 5. The maximum rate of interest to be paid. 6. The date of the election. 7. The election precincts, polling places and election officers. B. Notice of the election shall be given and the election shall be held in the manner prescribed by title 16. C. If the proposition of issuing bonds fails to receive the requisite number of votes to authorize issuance of the bonds, the board of directors may call another election on the question of issuing bonds under the terms of this article, either for the same purposes or for any lawful purpose of the district. 48-2021. Issuance of bonds; subsequent bond issues A. If a majority of the votes cast at a bond election favors the bonded indebtedness proposed, bonds of the district for the amount stated shall be issued and sold. B. The board of directors, subject to this article, shall prescribe by resolution the form of the bonds and interest coupons attached thereto. The bonds shall be payable serially over a period of not more than thirty years from the date thereof at a place fixed by the board and designated in the bonds, together with the interest thereon from the date of the bonds until paid, except that if the initial purchaser of the bonds is the United States of America or any department, division or agency of the United States of America, the bonds may mature over a period that does not exceed forty-one years. Interest shall be payable semiannually at the rate or rates set by the accepted bid, which shall not exceed the maximum rate of interest set forth in the resolution calling the election. The bonds may be refunded. The board of directors may provide for their redemption before maturity on giving notice as the board determines to be reasonable and for the payment of a premium at redemption if the board determines the premium to be reasonable or advisable. C. The bonds may be issued in denominations as the board of directors determines, except that no bond shall be of a denomination less than five hundred nor more than ten thousand dollars. Each bond shall be signed by the chairman of the board of directors and countersigned by the auditor of the sanitary district, and the seal of the district shall be affixed thereto. The interest coupons of the bonds, if any, shall be numbered consecutively and shall be signed by the chairman of the board of directors and the auditor of the district by their engraved or lithographed signatures. If any officer whose signature or countersignature appears on a bond or interest coupon ceases to be such officer, either before or after delivery of the bond to the purchaser, the signature or countersignature shall be valid for all purposes as if the officer had remained in office. D. The validity of the bonds, after their issuance, shall not be questioned in any court, except on the ground that a provision of this article authorizing their issuance is unconstitutional or that proper notice of the bond election was not given. E. When bonds have been issued by a sanitary district and the proceeds of the sale thereof have been expended as authorized by this article, the board of directors may, by resolution passed by a vote of at least two-thirds of its members, determine that additional bonds for carrying out the purposes of the district should be issued. Thereupon the board of directors shall cause another survey and report to be made. On approval thereof as provided by this article for an original report, the board shall submit to the qualified electors of the district, in the manner prescribed by section 48-2020, the question of issuing additional bonds. If a majority of the votes cast is in favor of issuing the additional bonds, they may be issued and sold and the proceeds disposed of in the manner prescribed by subsections A, B, C and D of this section and by section 48-2022. F. The district may issue refunding bonds to refund all or any portion of an issue of bonds issued pursuant to this section in the manner prescribed by title 35, chapter 3, article 4. 48-2022. Sale of bonds; disposition of proceeds A. The board of directors of a sanitary district shall sell bonds issued pursuant to section 48-2021, subsections A, B, C and D at not less than par value at public sale or if the district has a population of more than two thousand persons and has been in existence for ten or more years at public or private sale, and the proceeds shall be placed in the county treasury to the credit of the district. All premiums and accrued interest received shall be paid into the bond fund of the district to be used for payment of principal of and interest on the bonds, and the remainder of the proceeds shall be paid into the construction fund of the district. The county treasurer shall keep an accurate record of all monies of the district paid to him. B. The construction fund shall be used exclusively for the purposes mentioned in the resolution calling the bond election. Payments from the construction fund shall be made upon claims allowed by the board of directors of the district, prepared, presented and audited in the same manner as claims upon county funds. 48-2023. Lien of bonds Bonds issued pursuant to this article are a lien on the property of the district issuing them, and the lien of the bonds of one issue shall be a preferred lien to that of any subsequent issue. 48-2024. Tax exemption of bonds Bonds issued pursuant to this article are not taxable by the state or by any county, city, town or other subdivision of the state. 48-2025. Tax levy to pay principal and interest of bonds A. The principal of and interest on bonds issued pursuant to this article shall be paid from revenue derived from an annual tax on the real property and mobile homes within the sanitary district issuing them, and such real property and mobile homes shall remain liable to taxes for payment of the bonds and interest until paid in full. B. Notwithstanding the provisions of subsection A, the board of directors of the district may provide that all or a portion of the district's annual revenue derived from sources other than taxes levied pursuant to this section may be used to pay principal and interest on bonds. So long as all principal, interest or sinking fund payments are current, the amount of the annual levy for payment of principal and interest may be reduced by the amount derived from other sources which are pledged or made available for the payment of principal and interest in such fiscal year. Whenever the district fails, in any fiscal year, to pay the required principal and interest or meet any required sinking fund payment, the difference may be made up by an emergency levy in the current fiscal year and, if not so made up, shall be included in a required levy the forthcoming fiscal year. C. The board of directors of a sanitary district shall annually, on or before August 15, certify to the board of supervisors the amount necessary to pay interest on and the portion of principal which will become due on bonds of the district during the ensuing year. D. The board of supervisors, at the time of levying general county taxes, shall levy and cause to be collected in the manner prescribed by law for county taxes, a tax upon the real property and mobile homes within the sanitary district, based upon the current assessment roll, sufficient to pay the amount certified by the board of directors. If the board of directors of a sanitary district fails to certify to the board of supervisors the amount necessary, the board of supervisors shall ascertain the amount which should have been certified and shall levy and cause to be collected a tax sufficient to produce that amount. E. The tax, when collected, shall be paid into the county treasury to the credit of the bond fund of the sanitary district, and shall be used solely for payment of the principal of and interest on the bonds. The county treasurer shall pay the principal and interest on the dates and at the places specified in the bonds in the manner provided by law for the payment of principal of and interest on county bonds. 48-2026. Tax levy for current expenses A. The board of directors of a sanitary district may at the time of certifying the amount required for payment of principal of and interest on bonds, certify to the board of supervisors the amount necessary to maintain, operate, extend and repair the sewerage system and the garbage disposal and treatment plants of the district during the ensuing year, and to defray all other expenses incidental to the exercise of powers granted by this article, together with an estimate of the revenue which will be received from rentals and service charges. In that event, the board of supervisors shall, at the time of levying general county taxes, levy and cause to be collected in the manner prescribed by law for county taxes, a tax on real property and mobile homes within the sanitary district based on the current assessment roll, sufficient to pay the amount certified, less the amount estimated to be received from rentals and service charges. B. The tax, when collected, shall be paid into the county treasury to the credit of the operating fund of the sanitary district, and the board of directors may order expenditure of the fund for the purposes for which levied. Payments from the operating fund shall be made upon claims allowed by the board of directors, prepared, presented and audited in the same manner as claims against the county. C. Not less than twenty nor more than thirty days prior to making the certification to the board of supervisors provided by subsection A, the board of directors shall publish in a newspaper of general circulation in the district, an itemized statement of the amounts proposed to be certified, and the statement shall contain notice of a meeting to be held by the board of directors prior to the time for the certification. At that meeting, any owner of real property or a mobile home within the district may appear and present objections to any item of the amount proposed to be certified. 48-2027. Fees, rentals and service charges; reserve fund; investments; lien A. The board of directors of a sanitary district may charge and collect fees, including the fees listed in subsection G of this section, and sewer rentals and service charges for any service performed or property furnished by the district. B. The board of directors may charge and collect fees and service charges for any plan reviews, site evaluations, construction inspections, monitoring inspections, follow-up inspections and any other service performed by the department of environmental quality if the sanitary district and the department of environmental quality have entered into an intergovernmental agreement pursuant to title 11, chapter 7, article 3 in which the department of environmental quality has agreed to provide any of such services in the sanitary district, except that: 1. Such fees and service charges shall not exceed the actual cost of performing such services. 2. State agencies are exempt from paying such fees and service charges. 3. Fees shall not be charged or collected by both the department of environmental quality and a sanitary district for the same service. C. Revenue collected under subsections A and B of this section shall be paid into the county treasury to be credited first to the bond fund of the district to be used in the payment of principal and interest on the bonds if the proceedings relative to the issuance of the bonds provide for a pledge of such revenues or if the district has budgeted all or a portion of such revenues to the payment of the bonds in the certificate submitted to the board of supervisors pursuant to section 48-2025, subsection C and, second, to the operating fund of the district. D. The proceedings relative to the issuance of any bonds may provide for a pledge of all or any part of the revenues of the district derived from any source other than taxes levied pursuant to section 48-2025 as additional security and source of payment of all or any specific issue of the district's bonds. The pledge shall be supplemental to and not in lieu of the liability of all taxable real property for the payment of the bonds. The pledge may be secured by an assignment of all or a part of such revenues to a bank doing business in this state. The treasurer may be instructed by the board of directors of the district to make monthly, semiannual or annual payments to such bank to provide for payment of the bonds and coupons as the same shall mature. When revenues are assigned to a bank for payment, such bank may be named as a paying agent on the bonds and coupons so secured in lieu of the county treasurer, and in that event, the county treasurer shall remit any taxes collected pursuant to section 48-2025 to such paying agent in time for prompt payment of maturing bonds and coupons. E. The proceedings for the issuance of bonds may provide for a reserve fund in a sum found by the board of directors of the district to be sufficient to secure payment of maturing principal and interest in the event of a deficiency. The reserve fund may be funded from either bond proceeds or revenues available for that purpose in any fiscal year after provision has been made for payment of principal and interest and operating costs. The district may covenant to maintain the reserve fund throughout the life of any bonds. Whenever the annual revenues are insufficient to meet maturing principal or interest or sinking fund payments in any fiscal year, the reserve fund shall be exhausted prior to the making of an emergency levy. F. Upon direction of the board of directors of the district, monies held in any fund may be invested by the county treasurer or the bank acting as assignee under any pledge in any securities or obligations qualifying as investments for state monies under section 35-324. G. Fees which the district may charge pursuant to this section include: 1. User fees, which are proportional shares of the cost of the operation, maintenance and replacement of the wastewater collection, treatment and effluent disposal system. 2. Hookup fees for connection to the district sewer system, not including the cost of the actual physical connection. 3. A lateral fee, which is a fee for the cost of constructing a sewer lateral from the property line of the user to the middle of the easement or right-of-way in which the sewer is located. 4. A capacity fee based on the cost of developing the sewage collection, treatment and effluent disposal facilities required to treat the flow of sewage which enters the sewage system from a particular sewer connection. 5. An availability fee, which is a charge levied against all property in the district which is not connected to the sewer system but which lies adjacent to a sewer line for the benefit to that particular parcel of property of having the sewer line and capacity in the treatment works and effluent disposal facilities to accommodate the development of the property. The availability fee shall be no more than fifty per cent of the user fee. 6. A late fee if the payment of any fee prescribed by this section is delinquent for more than fifteen days. H. All fees shall be initially determined and annually reviewed by the board of directors following a public hearing at which all interested persons may appear and be heard on any matter relating to the amount of the fees or the method of determining the fees. Not less than twenty or more than thirty days before the public hearing the board of directors shall publish a notice of the time and place of the hearing and a statement of the rates to be considered or reviewed. Any person wishing to object to the establishment or continuation of the rates, before the date set for the hearing, may file the objection with the chairman of the board of directors. I. A sanitary district may file a lien on property for the nonpayment of user fees for services provided to the property if the payment of the fees is delinquent for more than ninety days. J. Before filing the lien, the sanitary district shall provide written notice to the owner of the property. The notice shall be given at least thirty days before filing the lien and shall include an opportunity for a hearing with a designated sanitary district official. The notice shall be either personally served or mailed to the property owner, at the last known address by certified mail, or to the address to which the tax bill for the property was last mailed. If the owner does not reside on the property, the notice shall be sent to the last known address. K. The unpaid user fees, from the date of recording in the office of the county recorder in the county in which the property is located, are a lien on the property until the fees are paid. The lien is subject and inferior to the lien for general taxes and to all prior recorded mortgages and encumbrances of record. A sale of the property to satisfy a lien obtained under this section shall be made on judgment of foreclosure and order of sale. A sanitary district may bring an action to enforce the lien in the superior court in the county in which the property is located at any time after the recording, but failure to enforce the lien by this action does not affect its validity. The recorded unpaid user fees are prima facie evidence of the truth of all matters recited in the recording and of the regularity of all proceedings before the recording. L. Unpaid user fees including any late fees assessed pursuant to this section accrue interest at the rate prescribed by section 44-1201. M. A prior assessment of unpaid user fees for the purposes provided in this section does not bar a subsequent assessment for these purposes and any number of liens on the same lot or tract of land may be enforced in the same action. N. The sanitary district shall determine the status of leased residential property before filing a lien pursuant to subsection I of this section and a lien may not be filed if both of the following apply: 1. The lessee of the leased residential property has agreed in writing to be responsible for those fees. 2. The owner of the leased residential property has recorded a copy of the written agreement of the lessee's responsibility for payment of the user fees pursuant to this section. The copy of the written agreement shall be recorded in the office of the county recorder in the county in which the residential property is located. 48-2028. Dissolution of sanitary district A. A sanitary district organized under this article, which has no bonded indebtedness and when all legal indebtedness of the district has been discharged, may be dissolved on the vote of a majority of the qualified electors of the district at a special election called by the