(1) (a) The
governing body of any municipality wherein territory within a special district is
located, the board of any special district with territory within the boundaries of any
municipality, or fifty percent of the fee owners of real property in an area of any
municipality in which territory within a special district is located may petition the
court for exclusion of the territory described in the petition from the special district.
Within ten days after the filing of any petition for exclusion, the governing body of
the municipality and the board shall be notified of the exclusion proceedings. The
taxpaying electors shall be notified of the exclusion proceedings by publication.
The governing body of the municipality, the board, and the taxpaying electors, as a
class, shall be parties to the exclusion proceedings.
(b) The provisions of this section shall not apply to health service districts.
(c) The provisions of this section shall not apply in the event that the territory
described in the petition for exclusion constitutes the entire territory of the special
district.
(2) Subject to the provisions of subsection (5) of this section, the court shall
hold a hearing on the petition and order the territory described in the petition or any
portion thereof excluded from the special district if the following conditions are
met:
(a) The governing body of the municipality agrees, by resolution, to provide
the service provided by the special district to the area described in the petition on
and after the effective date of the exclusion order.
(b) The service to be provided by the municipality will be the service provided
by the special district in the territory described in the petition for exclusion.
(c) The governing body of the municipality and the board shall each submit a
plan for the disposition of assets and continuation of services to all areas of the
district. Said plans shall include, if applicable, provisions for the maintenance and
continuity of facilities to be utilized by the territories both within and without the
municipal boundaries and of services to all territories served or previously served
by the special district. If the municipality and the special district agree upon a
single plan and enter into a contract incorporating its provisions, the court shall
review such contract, and if it finds the contract to be fair and equitable, the court
shall approve the contract and incorporate its provisions into its exclusion order.
The court's review of the provisions of the contract shall include, but not be limited
to, consideration of the amount of the special district's outstanding bonds, the
discharge by the municipality or the territory excluded from the special district of
that portion of the special district's indebtedness incurred to serve the territory
proposed for exclusion, the fair market value and source of special district facilities
located within the territory proposed for exclusion, the facilities to be transferred
which are necessary to serve the territory proposed for exclusion, the adequacy of
the facilities retained by the special district to serve the remaining territory of the
special district, the availability of the facilities transferred to the municipality for
use, in whole or in part, in the remaining territory of the special district, the effect
which the transfer of the facilities and assumption of indebtedness will have upon
the service provided by the special district in territory which is not part of the
exclusion, and the extent to which the exclusion reduces the services or facilities or
increases the costs to users in the remaining territory of the special district.
(d) If the municipality and the special district are unable to agree upon a
single plan, the court shall review the plans of the municipality and the special
district and direct each to carry out so much of their respective plans in which there
is no disagreement and make such other provisions as the court finds fair and
equitable, and shall make such allocation of facilities, impose such responsibilities
for the discharge of indebtedness of the special district, and impose such other
conditions and obligations on the special district and the municipality which the
court finds necessary to permit the exclusion of territory from the special district
and the transfer of facilities which are necessary to serve the territory excluded
without impairing the quality of service nor imposing an additional burden or
expense on the remaining territory of the special district. For the purpose of making
such determination, the criteria set forth in this paragraph (d) and paragraphs (b)
and (c) of this subsection (2) shall be considered. The respective portions of the
plans to be performed, the transfer of facilities, and the requirements for the
discharge of indebtedness of the special district and other conditions and
obligations imposed by the court shall be specifically set forth in the order
excluding territory from the special district.
(3) (a) The following additional requirements shall be met before any court
orders the exclusion of any area from any water, sanitation, or water and sanitation
district or any metropolitan district providing water or sanitation services or both:
(I) Such district's outstanding bonds shall not exceed ten percent of the
valuation for assessment of the taxable property in the remaining territory of the
special district, or, as an alternative, the municipality or the territory excluded from
the special district shall discharge that portion of the special district's
indebtedness incurred to serve the territory proposed for exclusion or the
municipality shall have entered into a contract to purchase the entire system or
systems of such district at a price at least sufficient to pay in full all of the
outstanding indebtedness of such district and all of the interest thereon.
(II) Provision shall be made that all areas of such district receive the service
or services for which such district was organized in substantial compliance and
fulfillment of the service plan of the district, if one exists, or in accordance with the
petition for organization of such district if no service plan was originally adopted
and approved pursuant to part 2 of this article.
(b) If an election in a water, sanitation, or water and sanitation district or a
metropolitan district providing water or sanitation services or both has been held
pursuant to subsection (7) of this section and the majority of votes cast favor the
municipality providing the service, the municipality and such district shall enter into
a contract for the municipality to assume full responsibility for the operation and
maintenance of the entire system or systems of such district and to integrate said
system or systems with those of the municipality to the largest extent possible. The
terms and conditions of service and the rates to be charged by the municipality for
said service under the contract shall be uniform with the terms, conditions, and
rates for similar service provided by said municipality to other users within the
municipality.
(4) If no election has been held pursuant to subsection (5) of this section, the
following additional requirement shall be met before any court orders the exclusion
of any area from any fire protection district: The quality of service including, but not
limited to, the fire insurance costs for the improvements within the excluded area
will not be adversely affected by such exclusion.
(5) (a) After the filing of a petition for exclusion under subsection (1) of this
section, ten percent or one hundred of the eligible electors of the special district
territory proposed for exclusion, whichever number is less, may petition the court
for a special election to be held within the special district territory proposed for
exclusion on the question of exclusion of the territory described in the petition for
exclusion. If a petition for a special election is filed with the court and complies with
this subsection (5), the court shall order a special election to be held only after it
finds the conditions of subsections (2)(a), (2)(c), and (2)(d) and, if applicable, of
subsection (3) or (4) of this section are met. The election shall be held and
conducted, and the results thereof determined, in the manner provided in article
13.5 of title 1. The special district shall bear the costs of the election.
(b) If a majority of the electors voting at such election approve the question
of exclusion, the court shall order the territory excluded from the special district in
accordance with its findings on the conditions specified in subsection (2) and, if
applicable, of subsection (3) or (4) of this section. If a majority of those voting do
not approve the question, the court shall conclusively terminate the exclusion
proceeding.
(6) Any order for exclusion of territory from a special district shall become
effective on January 1 next following the date the order is entered by the court. The
order for exclusion shall recite in the findings a description of any bonded
indebtedness in existence immediately preceding the effective date of the order for
which the excluded property is liable and the date that such bonded indebtedness
is then scheduled to be retired. After July 1, 1993, failure of the order for exclusion
to recite the existence and scheduled retirement date of such indebtedness, when
due to error or omission by the special district, shall not constitute grounds for
correction of the omission of a levy on the excluded property from the assessment
roll pursuant to section 39-5-125, C.R.S.
(7) (a) After any exclusion of territory under this section, the court may order
an election of the electors of the portion of the special district remaining to
determine whether they desire the municipality to provide the service provided by
the special district if either of the following conditions exists:
(I) More than fifty percent of the territory within the special district as it
existed prior to such exclusion has been excluded; or
(II) The valuation for assessment of the area of the excluded territory is
greater than the valuation for assessment of the area of the remaining territory in
the special district.
(b) If a majority of the electors voting at such election approve the question
requiring the municipality to provide such service, the court shall request the
governing body of the municipality and the board to enter into a contract which will
govern the providing of the service. The terms and conditions of the contract shall
be reviewed and approved by the court, but in no event shall the terms, rates, and
conditions be less equitable than for services supplied by a municipality to any
other users within the municipality. The court's review of the contract or, if the
municipality and the special district after good faith negotiations are unable to
agree upon a contract, the court's order shall be in accordance with the criteria set
forth in paragraphs (b), (c), and (d) of subsection (2) of this section. The special
district shall continue in existence for the purpose of fulfilling any obligation
imposed upon it by the contract with the municipality or otherwise.
(c) Any election held pursuant to this subsection (7) shall be held and
conducted, and the results thereof determined, in the manner provided in articles 1
to 13 of title 1, C.R.S.