Court Opinion

ID: 3310486
Source: CourtListenerOpinion
Date Created: 2016-07-05 17:23:54.448046+00
Date Added: 2024-06-11T14:57:24.345095
License: Public Domain

Ms. Paula Herzmark Executive Director Department of Local Affairs 1313 Sherman Street, Room 518 Denver, CO  80203
Dear Ms. Herzmark:
QUESTION PRESENTED AND CONCLUSION
This letter is written in response to your request for an attorney general's opinion on the following question:
What is the legal effect of a water and sanitation district ceasing to function without formal dissolution of the district?
     It is my opinion that in the event a water and sanitation district ceases to function without formal dissolution the board of that district is not excused from the requirements of C.R.S. 1973, title 32, article 4, part I and the board should be compelled to perform its duties by appropriate legal action.
ANALYSIS
Your question sets forth the following particulars:
1. The district was organized pursuant to C.R.S. 1973,32-4-101, et seq.
2. At time of the organization of the district, there was only one landowner.
3. No bonds were issued by the district.
4. No revenues were raised by the district.
5. At present time, a number of persons own land within the district.
The statutes pertaining to water and sanitation districts, C.R.S. 1973, 32-4-101, et seq., create certain mandatory duties of the board of directors of the district. These duties include:
     a)  The treasurer shall file with the clerk of the court a corporate fidelity bond in an amount not less than five thousand dollars. C.R.S. 1973, 32-4-110(2).
     b)  The board of directors of the district has the duty to cause an audit to be made and to cause a financial statement to be published annually. C.R.S. 1973, 32-4-110(4). While districts with less than $50,000 revenue do not have to publish such audits, state law would still require an annual report on the district to be prepared, approved and filed. C.R.S. 1973, 29-1-604.
     c)  The board shall meet regularly. C.R.S. 1973, 32-4-111. (emphasis added)
     d)  Elections for directors shall be held. C.R.S. 1973, 32-4-112. (emphasis added)
Formal dissolution may be accomplished either by proceedings under C.R.S. 1973, 32-1-601, et seq., or by conveyance of all property of the district to the city or town within which the district lies, under C.R.S. 1973, 32-4-113(1)(p).
SUMMARY
It is my opinion that while there are no statutory prohibitions against a district simply ceasing to do business, the duties required of the board are not excused unless the district is formally dissolved, and the performance of such duties could be compelled by legal action. The cessation of business by a water and sanitation district does not exempt the district from the requirements of C.R.S. 1973, title 32, article 4, part 1, without formal dissolution of the district.
I hope this opinion sufficiently addresses your inquiry.
Very truly yours,
                              J.D. MacFARLANE Attorney General
WATER AND WATERWAYS SEWAGE SPECIAL DISTRICTS
C.R.S. 1973, 32-4-101 et seq.
LOCAL AFFAIRS, DEPT. OF Local Government, Div. of
Where a water and sanitation district does not dissolve but simply ceases to do business, the board of directors is not excused from the requirements of C.R.S. 1973, 32-4-101 et seq.