7-13-2334. Plan to consolidate with municipality. (1) If more than 60% of a district's customers reside within the city limits of a municipality and the district purchases its water from the municipality, the district may initiate a consolidation plan with the municipality.

(2) The consolidation plan must:

(a) provide for adjustment of existing bonded indebtedness and other obligations in a manner that will provide for a fair and equitable distribution of the burden of debt service;

(b) provide for the establishment of the service areas;

(c) outline the transfer or other disposition of property and other rights, claims, or assets of consolidation under this section;

(d) provide for the transfer, reorganization, dissolution, absorption, or other adjustment of boundaries as necessary;

(e) consider separately the disposition of the district territory within the city limits and the district territory outside of the city limits; and

(f) include any other provisions that are consistent with state law.

(3) The consolidation plan may grant the municipality the authority to transfer all rights-of-way or other entities without requiring the municipality to hold a referendum.

(4) If the district territory outside of the city limits is not consolidated into the municipal facilities under this section, the district shall:

(a) continue to operate services for the territory outside of the city limits; or

(b) request the board of county commissioners to assume the district's provision of services and financial obligations for the territory outside of the city limits.