                                 CODE OF VIRGINIA

ACQUISITION BY COUNTY OR CITY OF WATER SUPPLY SYSTEM OR SEWAGE SYSTEM FROM
SANITARY DISTRICT (§ 15.2-2116)

Any county or city may acquire any water supply or sewage systems or water
supply and sewage system, from any sanitary district in any such county or city,
and the sanitary district may convey the system to such county or city, upon:
(i) the payment to the sanitary district by the county or city of the amount of
any indebtedness owing by the county or city to the sanitary district with
respect to such water supply or sewage system or water supply and sewage system
(reduced by the amount of any indebtedness owing to the county or city by the
sanitary district in respect of such system), provided that any such amount so
paid to the sanitary district shall be set aside and applied to the payment of
the outstanding bonded indebtedness of the sanitary district incurred with
respect to such water supply or sewage system or water supply and sewage system;
and (ii) the assumption by the county or city of the outstanding bonded
indebtedness of the sanitary district incurred with respect to such water supply
or sewage system, or water supply and sewage system, for which payment is not
provided for pursuant to clause (i), or any portion thereof, or the payment by
the county or city of moneys (reduced by any amounts paid to the sanitary
district pursuant to clause (i)) sufficient for, and to be applied to, the
payment of the principal of and interest on such bonded indebtedness or portion
thereof not assumed by the county or city and for which payment is not provided
for pursuant to clause (i), or a combination of such assumption and payment
whereby the payment of the principal of and interest on all such bonds shall be
made or provided for.
		The county or city may limit its assumption of such sanitary district&#8217;s
bonded indebtedness to payment from the revenues to be derived from rates,
rentals, fees and charges for the use and services of such water or sewage
system, or water and sewage system. If at any time the revenues derived from
rates, rentals, fees and charges for the use and services of such unified system
are insufficient to provide for the operation and maintenance of the system and
for payment of principal of and interest on such bonded indebtedness of the
sanitary district as they become due, the sanitary district shall levy an annual
tax upon all property in such sanitary district subject to local taxation to pay
such principal and interest as they become due.
		Nothing contained in the immediately preceding sentence shall, however, be
construed to relieve the county or city of its obligations under any such
agreement to impose rates, rentals, fees and charges for the use and services of
such system sufficient to pay the costs of operation and maintenance and to
provide for the payment of such principal and interest. Such agreement shall
also provide for the assumption by the county or city of the contracts for
materials and services pertaining to such water supply or sewage system or water
supply and sewage system, entered into by the sanitary district and existing on
the day of such acquisition.
		Moneys to be applied to the payment of sanitary district bonded indebtedness
under this section shall be applied to such payment upon the earlier of the
stated maturity of such bonds or the first date after the acquisition that such
bonds may be redeemed in accordance with their terms. Pending such application,
such moneys may be invested by the governing bodies in investments permitted by
subdivisions 1, 2 and 3 of § 2.2-4500, exclusive of revenue bonds. Amounts
earned from time to time on the investment of such moneys and not required for
the payment of the principal of and interest and premium, if any, on such bonded
indebtedness shall be paid to such county or city and applied to water supply or
sewerage purposes, or both. The county or city may enter into a contract with
any bank or trust company within or outside the Commonwealth, not inconsistent
with the foregoing provisions, with respect to the safekeeping and application
of the moneys set aside in accordance herewith for the payment of such bonded
indebtedness of such sanitary district, the investment of such moneys and the
safekeeping and application of the earnings on such investment.
		If there is a sanitary district in any such county or city having both a water
supply system and a sewage system, the governing bodies, in their discretion,
may acquire either or both of such systems, and if there is a single
indebtedness against both such systems and the governing bodies elect to acquire
only one such system, then the governing body is authorized and empowered to
assume such indebtedness in whole or in part. Any such water or sewage system or
water and sewage system acquired by any county or city hereunder shall
constitute a &#8220;project&#8221; as defined in § 15.2-2602, and such county
or city in respect of such project shall have all the powers granted by the
Public Finance Act (§ 15.2-2600 et seq.). Any acquisition pursuant to this
section of a water supply or sewage system, or water supply and sewage system,
of a sanitary district shall be made pursuant to an agreement entered into
between the county or city and such district. No proceeding or approvals other
than those specifically required by this section shall be required for the
acquisition by the county or city from any sanitary district, or the conveyance
to the county or city by any sanitary district, of any such system or systems.

HISTORY: 1948, c. 154, § 15.1-293.1; 1972, c. 220; 1997, c. 587.