Article 7. Determination Of And Alternative Methods Of Payment Of Debt Service And Costs Of Maintenance And Operation of California Water Code >> Division 20. >> Part 8. >> Chapter 6. >> Article 7.

The board annually shall cause to be prepared a written report stating the reasons for and conclusions of the board upon the following, together with any additional information deemed by the board to be relevant to such conclusions:
  (a) The amount of the total debt service payable by the district for the following fiscal year on any bonded indebtedness incurred pursuant to this chapter, and the estimated maintenance and operation costs of the improvements for such fiscal year.
  (b) The amount of such total debt service and maintenance and operation costs proposed to be raised in each of the improvement districts established under the provisions of this chapter, in accordance with the estimated benefits to be received by the landowners, water users, and inhabitants of each such improvement district during the following fiscal year.
  (c) The projected retail water sales within each such improvement district for the following fiscal year, stated by volume and anticipated revenue. Such report shall be mailed at least 20 days before the hearing provided for in Section 72074 to (1) each retail water purveyor with a service area wholly or partly within the district, and (2) any other interested party having made written request therefor at least 20 days before such hearing.

Annually, prior to approving the annual budget for the district, the board of directors shall hold a public hearing for the purpose of considering the report made pursuant to this article, and to determine the amount of debt service and maintenance and operation costs to be raised in each of the improvement districts established hereby and the method of payment of such amount in each such improvement district.

Notice of the hearing to be held pursuant to Section 72074 shall be given by publishing a copy, pursuant to Section 6066 of the Government Code, at least 15 days prior to the time fixed for the hearing in a newspaper of general circulation within the district, if there is a newspaper of such circulation within the district. Such notice also shall be given by posting a copy in three public places within each of the improvement districts established under this chapter for at least two weeks before the time fixed for the hearing. The notice of such hearing shall state the following:
  (a) The time and place for the hearing by the board.
  (b) The amount of such debt service and maintenance and operation costs proposed to be raised in each improvement district established by this chapter.
  (c) That an ad valorem tax will be levied in each improvement district in an amount sufficient to pay the bond debt service and maintenance and operation costs required for the following fiscal year by each improvement district, to the extent that alternative methods of payment are not available for such purpose under the provisions of this chapter.
  (d) That at such time and place any person interested will be heard on the questions of such amount of debt service and maintenance and operation costs and the availability of such alternative methods of payment.

At the conclusion of the hearing, the board shall, by resolution, determine the following:
  (a) The amount of the total debt service on any bond indebtedness incurred pursuant to this chapter and the amount of the maintenance and operation costs to be paid by each improvement district established hereunder, in accordance with the estimated benefits to be received by the landowners, water users, and inhabitants of each such improvement district.
  (b) The method of payment of such debt service and maintenance and operation costs in each such improvement district.

The amount of such debt service and maintenance and operation costs to be raised in each improvement district established under this chapter shall be paid by an ad valorem tax, to the extent that such payment is not paid by one or more of the following alternative methods:
  (a) Payment of funds to the district from water revenues or other income of the retail water purveyors within each such improvement district pursuant to a contract therefor, which shall constitute a lien upon such revenues and income. Notwithstanding the foregoing, such payment shall not be used unless and until a declaration of a majority of purveyors, stating their intention to use a specified amount of water service revenues or other income as such an alternative method of payment is filed with the board and there is shown to the satisfaction of the board that the financial condition of such purveyor reasonably will assure such payment. Such payment shall be made to the district on or before the date on which it would have received funds if it levied an ad valorem tax in lieu of such alternative method of payment. If any such purveyor fails to make any or all of such payment, the amount of such delinquency, plus a penalty of 8 percent per annum, shall be paid by such defaulting purveyor through appropriate proceedings brought by the district.
  (b) Collection of the utility tax pursuant to Sections 72072 to 72072.12, inclusive.
  (c) Water standby or availability charges in any such improvement district fixed pursuant to Article 2 (commencing with Section 71630) of Chapter 2 of Part 5 of this division.
  (d) Water revenues of the district derived from sales of water within each such improvement district pursuant to Article 1 (commencing with Section 71610) of Chapter 2 of Part 5 of this division. The board shall not use any of such alternative methods of payment if a written protest against such use is filed with the board, prior to the conclusion of the hearing held pursuant to this chapter, by the retail water purveyors within each such improvement district providing the majority of retail water service within such improvement district by volume and number of services. Notwithstanding the foregoing, if such a written protest is filed, the board may nonetheless use any such alternative means of payment, other than that specified in subdivision (a), upon the affirmative vote of four directors.