Article 5.5. Transfer Of City Waterworks Systems of California Government Code >> Division 3. >> Title 4. >> Part 2. >> Chapter 10. >> Article 5.5.

Any city which owns and operates a waterworks system, or any part of such a system, may sell, lease, or otherwise transfer the control or management of the system, or the portion thereof, to any municipal water district which is engaged in supplying the inhabitants of the city with water for domestic and general purposes, if the city lies wholly within the boundaries of the district.

If the legislative body of the city determines that it is for the best interests of the city to sell, lease, or otherwise transfer the control or management of its waterworks system, or portion thereof, to such a municipal water district, by a four-fifths vote of all its members, it shall pass an ordinance, authorizing the sale, lease, or other transfer.

The ordinance shall specify the price, the yearly or monthly rental, or if the transfer and control of the waterworks system is to be made upon terms, the ordinance shall briefly state the terms.

The ordinance shall also state such conditions and stipulations as the legislative body determines necessary to a proper understanding of the transaction, and may refer to the proposed form of contract for further particulars.

The ordinance shall be published weekly for at least four weeks in a newspaper published in the city, or if there is no such newspaper it shall be posted in three public places in the city for three weeks.

The ordinance is subject to referendum in the same manner as other ordinances.

The sale, lease, or transfer on terms shall be for a valuable consideration, which shall be agreed upon between the legislative body of the city and the board of directors of the municipal water district.

The contract or deed shall be executed on behalf of the city by its mayor.

If the transaction is a sale, either for cash or after the completion of installment payments, the deed conveys to the municipal water district the full title to the property described.

If an action or proceeding is brought in any court by the city, or any taxpayer or other person on its behalf, or by any person having an interest in the transaction, for the purpose of setting the transfer aside or avoiding it, any judgment setting aside or avoiding the transfer is void, unless it provides for the restoration to the municipal water district of the consideration paid for the waterworks. The municipal water district shall not be compelled to surrender possession of the waterworks until the consideration is restored.