Special Districts
Tuesday, March 28, 2023

Forming a Domestic Water Improvement District

A domestic water improvement district is a county improvement district that is formed for the purpose of constructing or improving a domestic water delivery system or purchasing an existing domestic water delivery system and, if necessary, making improvements to it. A domestic water improvement district may also be a county improvement district that is converted to a domestic water improvement district pursuant to A.R.S. §48-1018.

Formation of a domestic water improvement district is the same as that for a County improvement district:

  • Petitions containing the signatures of a majority of the persons owning real property in the proposed district or by the owners of 51% or more of the real property in the proposed district are filed with the Board of Supervisors, along with a check or bond to cover the County’s expenses in the event the district is not formed. If 100% of the property owners sign the petition and the petitioners provide a records search showing the names of all the property owners in the proposed district, the Board of Supervisors may establish the district without going through the notice and formal hearing process. The petitions include information such as statements that establishment of the district will benefit property owners in the district and serve the public convenience, necessity and welfare; the boundaries of the proposed district, along with a map of the same; a general description of the proposed improvements; and the names and addresses of the individuals who will serve as the organizing board of directors. In most cases the petitions also include a petition to incur expense which authorizes the district, once established, to move forward with incurring the expenses necessary to construct, acquire or improve the water delivery system. However, prior to moving forward with improvements, the district must follow a legal process that requires notifying all property owners of the district’s intent to make improvements and providing for a public hearing on the matter.
  • When the petitions are officially accepted by the Board of Supervisors, the Board sets a hearing on establishment of the proposed district and mails notice of the hearing to each property owner of record within the proposed district. Persons wishing to object to establishment file written objections with the Clerk of the Board of Supervisors prior to the hearing date. The hearing must be held not more than 40 days following acceptance of the petitions.
  • The Board of Supervisors holds the hearing on establishment, at which it hears comments from the public, determines if the petition has been signed by the requisite number of property owners, determines if there is any property within the proposed boundaries of the district that would not benefit from establishment and excludes it from the boundaries, and determines whether establishment of the district will promote the public convenience, necessity and welfare.
  • If the Board of Supervisors approves establishment of the district, it will also appoint the district’s first board of directors. Usually, the persons named as board members in the petition for establishment are the persons appointed as the first board of directors. The first board of directors determines who on the board will serve four-year terms and who will serve two year terms, and the district’s first election for board members is held approximately two years after establishment of the district. At that time the board seats designated for the two-year terms are up for election, but the persons elected to fill those seats will be elected for four-year terms. This provides for the staggering of terms for board members, with the result that the district will have an election for board members every two years. In a domestic water improvement district, non-resident property owners in the district are eligible to vote in district elections as long as they are qualified electors anywhere in the state of Arizona.
  • Upon establishment of the district, the County will request taxing authority for the district from the Arizona Department of Revenue and will also submit the necessary paperwork to the U.S. Justice Department for election purposes. Following the County’s initial submission to the Justice Department, the district becomes responsible for any future submissions that may arise, for example, as the result of a boundary change in the district.

The law grants to the Board of Supervisors the authority to revoke the authority of an elected board of directors of a domestic water improvement district at any time in order to protect the residents of the district. The Board of Supervisors may then continue to act as the district’s board of directors or may call for new elections for the district board. The Board of Supervisors also has the authority to review, but not to veto, any financial transactions of a domestic water improvement district.

A domestic water improvement district may be dissolved by its board of directors when all bonds and other obligations of the district are paid or have become barred by the statute of limitations, and the operation and maintenance functions of the district or the major part of it have been taken over by an incorporated city or town or by the County.

Powers of Domestic Water Improvement Districts

The board of directors of a domestic water improvement district has all the powers and duties of the Board of Supervisors sitting as the board of directors of a county improvement district. Some of these powers include:

  • Acquisition, construction, reconstruction, maintenance or repair of waterworks for the delivery of water for domestic purposes, and of wells, ditches, canals, channels, conduits, pipelines and siphons, together with the necessary or usual appurtenances for the delivery of water through or out of the district under, over or through any street or right-of-way, either inside or outside of the district boundaries.
  • Acquire by gift, purchase, condemnation or other legal means real or personal property or interest in such property necessary for the construction, operation or maintenance of the water delivery system.
  • Issue bonds, levy and collect taxes for the payment of the general obligations of the district
  • Borrow money from the Water Infrastructure Finance Authority of Arizona (WIFA).
  • Establish user fees that may include the cost of administrators, surveyors, sanitation experts, engineers, legal counsel, or contractual amounts.
  • Establish hook-up fees for connection to the district’s system, not including the cost of the actual physical connection.
  • Establish lateral fees for the cost of constructing a water lateral from the property line of the user to the middle of the easement or right-of-way in which the water system is located.
  • File a lien on property for the nonpayment of user fees if the fees are more than 90 days delinquent. The lien is inferior to the lien for general taxes and to all prior recorded mortgages and encumbrances of record. In filing the lien, the district will add all costs incurred by the district, including interest, attorney fees and the costs of filing and enforcing the lien. However, the district may not file a lien against a residential property that is occupied by a lessee if the lessee is responsible for the payment of the user fees.
  • Annex territory to the district, or de-annex territory from the district.

For questions on the County’s role in the establishment of a domestic water improvement district, please contact the Special Districts Coordinator.

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