7-13-2349. Establishment of subdistricts. (1) The board of directors may establish one or more subdistricts within a district to provide for and finance the cost of water or sewer projects, improvements, or extensions that would benefit land in the subdistrict but not other land in the district. Before establishing a subdistrict, the board shall conduct a public hearing on the establishment of the proposed subdistrict after 10 days' notice published in a newspaper of general circulation in the district. The notice of public hearing must contain a description of the subdistrict and the proposed water or sewer project and its estimated cost. After the public hearing, the board of directors may, by resolution, establish the subdistrict if it finds that it is in the best interests of the owners of the land in the subdistrict and the district wishing to establish the subdistrict, that the subdistrict constitutes all land in the district benefited by the proposed water or sewer project, and that the establishment of the subdistrict and the financing of water or sewer projects for the benefit of the subdistrict will not violate any covenants of the district made with owners of outstanding bonds of the district.

(2) The board shall describe in the resolution establishing the subdistrict the land to be included in the subdistrict. The land does not need to be contiguous but must be located within the district and must constitute all of the land in the district benefited by the proposed water or sewer project.

(3) Following the establishment of a subdistrict, the board of directors may undertake and finance water or sewer projects, improvements, or extensions that benefit land in the subdistrict but not other land in the district, as provided in Title 7, chapter 13, parts 22 and 23, including but not limited to the incurrence of bonded indebtedness to finance costs and the levy of special assessments or the imposition of rates and charges, all subject to any covenants made with owners of outstanding bonds of the district. If general obligation bonds are to be issued to finance the costs of the projects, the subdistrict must be treated as the district for the purposes of 7-13-2331.

(4) The powers granted in this section are supplementary to the powers otherwise granted to county water and sewer districts.