31-794.

City or village annexation; receipt of written notice; limitation on district spending; exceptions; district; duties.

(1) If the chairperson of a sanitary and improvement district board of trustees or the legal counsel or administrator for the district receives written notice from a city or village proposing to annex territory within the sanitary and improvement district under the authority of section 14-117, 15-104, 16-117, 16-130, 17-405.01, or 17-407, the district shall not spend assets for a period of ninety days after receiving such notice, except for:

(a) All interest and principal payments on bonds due and payable from the construction fund or bond fund of the district;

(b) All interest and principal payments on construction fund warrants due and payable from the construction fund or bond fund of the district;

(c) All interest and principal payments on general fund warrants due and payable from the general fund of the district;

(d) Payment or issuance of warrants for services, work, labor, or materials that were ordered or contracted for by the district prior to receiving notice of the proposal of the city or village to annex the district. Such payments or warrants shall be paid from the district’s general fund, construction fund, bond fund, or service fee fund, so long as such payment or warrant shall not cause the district to exceed its total budget for the fund from which payment or warrant is to be made;

(e) Payment or issuance of warrants for any expense incurred by the district prior to receiving notice of the proposal of the city or village to annex the district that is required by the district (i) to satisfy any statutory obligation of the district, (ii) to address emergency or imminent public safety repairs or replacements to district property, and expenses that would be paid by the district in the ordinary course of business of the district, and (iii) to address projects for which a notice to contractors has been published, the bidding process has begun, and contracts are awarded for such project that (A) does not cause the district to exceed the district’s total general fund budget and is paid from the general fund, including, but not limited to, levied tax receipts to be received by the district on April 1 and August 1 if the annexation is to occur after such dates, (B) does not cause the district to exceed the district’s total construction fund or bond fund budget and is paid from the construction fund or bond fund, and (C) does not cause the district to exceed the district’s total service fee fund budget and is paid from the service fee fund; and

(f) Payment or issuance of warrants for a commitment or contract that will bind the district to pay for any other expense approved in writing by the city finance director or other designated person responsible for such approvals.

(2) If a district plans to commence a construction project or enter into any contracts required to be publicly bid pursuant to section 31-741 and for which a notice to contractors has not been published and the bidding process has not begun prior to the district receiving notice of the proposal of the city or village to annex the district, the district shall first submit either the plans and specifications for the improvements or the proposed contract to the city or village finance director or other designated person. Within ten business days after the district submits the plans and specifications or the proposed contract, the city or village finance director or other designated person shall either (a) approve or deny such plans and specifications or the proposed contract or (b) direct the department head within the city or village responsible for reviewing plans and specifications or contracts to approve or deny such plans and specifications or the proposed contract within ten business days.