Acquisition by county or city of water supply system or sewage system from sanitary district
Va. Code Ann. § 15.2-2116
in effectAny 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'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 "project" 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.
1948, c. 154, § 15.1-293.1; 1972, c. 220; 1997, c. 587.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://law.lis.virginia.gov/vacode/15.2-2116/Fetched: 10/16/2026