§ 46-30-5 - Merger – Effective date – Transfer of assets and assumption of liabilities.
SECTION 46-30-5
§ 46-30-5 Merger – Effective date– Transfer of assets and assumption of liabilities. – (a) After petition by the small water supply system to the governing agency andsubject to the approval of the governing board of the public water supplysystem and the governing board of the governing agency, or, in the case of amunicipally owned system, the approval of the majority of the entire town orcity council, the public water supply system shall be merged with and into thegoverning agency. Upon the merger, the governing board of the governing agencyor, in the case of a municipally owned system, the approval of the majority ofthe entire town or city council, agrees to accept and the governing board ofthe public water supply system agrees to transfer to the governing agency allrights and benefits accrued to the public water supply system arising out offederal assistance or federal funding available to public water supply systems.
(b) It shall be the obligation of the governing board of thepublic water supply system to disclose to the governing agency all obligations,liabilities, and lawsuits pending against the entity. The governing agencyshall have the right to include the obligations into the construction of theannexation fee to fairly apportion the costs to the customer base of the publicwater supply system.
(2) It is not the intent of this legislation to assume theprincipal business of the small public water supply system other than theserving of potable water. The governing agency shall have the right to refuseto accept any obligations, liabilities, and lawsuits pending against the entityrelating to other parts of the small public water system's activities.
(3) The customers annexed to the governing agency shall besubject to the same rules, regulations, municipal, state, and federal laws towhich all other customers of the governing agency are subject.
(c) The governing board of the public drinking water systemis hereby authorized to and shall pass such resolutions, enter into suchagreements, and do all things deemed useful and necessary by it to effectuatethe merger; and the governing board of the governing agency is herebyauthorized and may pass such resolutions, enter into such agreements, and doall things useful and necessary by it to effectuate the merger. Nothing in thissubsection shall permit the governing agency of any municipally owned system toenter into any agreements or to adopt any resolutions which require city ortown council approval.
(d) Upon completion, the merger shall be certified to thesecretary of state by the chief executive officer of the governing agency.
(e) Upon the annexation of the public water supply system andthe governing agency, the governing agency shall assume responsibility for theplanning, construction, operation, and maintenance of the appropriatefacilities, water mains and appurtenances of the public water supply system.
(f) If the governing agency accepts any obligations,liabilities, and/or lawsuits as referenced under subsection (b), the governingagency shall also be responsible and liable for all liabilities, obligations,and/or lawsuits of the public water supply system pertaining to water supply;and any claim existing or action or proceeding pending by or against the publicwater supply system may be prosecuted as if the annexation had not taken place,or the governing agency may be substituted in its place. Neither the rights ofcreditors nor any liens upon the property of the public water supply systemshall be impaired by the merger. The annexation as provided for herein shallnot impair the obligation of any contract or agreement or alter existingbargaining units nor abate any suit, action, or other proceeding lawfullycommenced by or against the public water supply system, or any member of itsgoverning board in relation to the discharge of his or her official duties, buta court of competent jurisdiction may, on motion filed within twelve (12)months after the effective date of the annexation, allow such a suit, action,or proceeding to be maintained by or against the annexed public water supplysystem or any member of its governing board in relation to the discharge of hisor her official duties. Upon completion of the merger, all user charges, feesor rates assessed by the governing agency as a result of the merger shall besubject to the approval of the public utilities commission.