Section 275. Sale of water district facilities

1. The board of supervisors
  may sell all or any part of the water supply and distribution system  of
  a  county  water district to a water authority or to a joint water works
  system established pursuant to article five-B of the  general  municipal
  law,  provided,  however,  that  the  sale shall have been approved by a
  majority vote of the qualified electors of the district voting  thereon.
  Such  referendum  shall  be held in the manner prescribed in section one
  hundred and one hundred two of this chapter, except, however, that  only
  those  electors  shall  be  qualified  to  vote who are residents of the
  district and owners of property in the district assessed upon  the  last
  completed town or city assessment roll, as the case may be.
    2.  The  proceeds  of  the  sale  of  a  part  of  a  water supply and
  distribution system shall be deposited in a reserve fund established for
  the purpose of retiring outstanding obligations issued on behalf of  the
  county  water  district  to  finance the cost of the facilities sold and
  shall be expended only for such purpose, except as  provided  below.  If
  the  proceeds  exceed  the  sum  of all installments of principal of and
  interest on such indebtedness due or to become due, or if, when all such
  outstanding obligations shall  have  been  retired,  any  moneys  remain
  unexpended  in  the reserve fund, such excess moneys may be used for any
  purpose properly chargeable against the entire district.
    3. If it is proposed that all of the property and  facilities  of  the
  district be sold, the proposition submitted to referendum shall provide,
  as  a  part thereof, for dissolution of the district as well as for sale
  of such property  and  facilities.  If  the  proposition  for  sale  and
  dissolution  is approved, the moneys received from such sale must be set
  aside in a reserve fund and used to amortize outstanding obligations, as
  provided in subdivision two of this section. Any excess over  and  above
  the  amount  necessary  to  be  set  aside in a reserve fund and used to
  retire indebtedness, as aforesaid, together with any other moneys of the
  district, shall be disposed of to the credit of real property within the
  district by any equitable method described in the proposition  submitted
  to referendum.
    4.  If  no  provision  for  distribution of such excess is made in the
  proposition, the excess proceeds shall first be apportioned to each town
  and city upon the basis of the  true  equalized  value  of  real  estate
  within  the  district computed in the manner prescribed in section eight
  hundred four of the real property tax law. The amount  thus  apportioned
  to  a  town  or  a  city  shall  be  further apportioned on the basis of
  assessed valuation among the several parcels of  land  situated  in  the
  district,  as shown on the last completed assessment roll of the town or
  city. The amounts so determined shall be credited to each such parcel of
  land in reduction of county and town taxes or county and city taxes,  as
  the  case may be, on so many successive tax rolls as may be necessary to
  exhaust such amounts.  When a tax is required to be levied by the  city,
  the  county  treasurer,  or comparable officer or body, shall certify to
  the proper city officer the amount available  for  credit  against  such
  tax.  The  aggregate amount credited in any year in reduction of town or
  city taxes shall be paid over to the proper town or  city  officer  from
  the available excess moneys.
    5.  If  there  be  any  real  property in the district which is wholly
  exempt from general taxation,  but  which,  while  exempt  from  general
  taxation,  paid,  as an assessment for benefit, a proportionate share of
  the cost of  the  improvement,  the  amount  apportioned  to  such  real
  property  shall  be  refunded to the owner or owners thereof as shown on
  the last completed assessment roll at the time of the distribution.