Counties have established water and sewer districts to facilitate water and sewer service to discrete areas. Many counties have several of these districts. Over time, it has become a challenging process to administer the separate districts, especially when some districts may be struggling financially as independent entities.

We have helped multiple clients streamline this process and make it easier for finance officers and public utilities directors alike. We’ve done this by establishing what we call an “operating agreement” between the county and its districts under our interlocal agreement statute. Under this agreement, the county assumes all operating activities of the districts (rate-setting, billing, maintenance, etc.) The county can then maintain the financial and operational health of the districts as a whole by setting variable rates or one uniform rate for the system. This can also significantly streamline the county’s accounting for the activities of the districts.

This agreement also works regardless of any debt or bonds the districts may have accumulated before the operating agreement is adopted. No bond documents or debt instruments need to be changed solely because of the agreement. Further, the agreement should have no impact on the ability of individual districts to borrow money in the future.

Why we like these projects –

  • They show the power of our interlocal agreement statute. Under our statute, if one local government can do something, it can contract with a second local government to carry out that function for the first local government. This statute greatly fosters interlocal cooperation and can often help us navigate spaces where it may not be clear which local government has which authority.
  • It shows a willingness to try something new. For how many years have counties complained about the difficulty of record-keeping for multiple water and sewer districts? This is a way to do something about it.

Let us know if you’d like to talk about this approach for your county. There’s still plenty of time to have a new arrangement in place for July 1.

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