Code Section Group

Public Utilities Code - PUC

DIVISION 5. UTILITIES OWNED BY MUNICIPAL CORPORATIONS [10001 - 10303]

  ( Division 5 enacted by Stats. 1951, Ch. 764. )

CHAPTER 1. Acquisition, Operation, and Sale of Utilities [10001 - 10303]

  ( Chapter 1 enacted by Stats. 1951, Ch. 764. )

ARTICLE 2. Sale and Disposal [10051 - 10061]
  ( Article 2 enacted by Stats. 1951, Ch. 764. )

10051.
  

Any municipal corporation incorporated under the laws of this State may as provided in this article sell and dispose of any public utility that it owns.

(Enacted by Stats. 1951, Ch. 764.)

10052.
  

Whenever the legislative body of a municipal corporation by a resolution passed by two-thirds of all its members determines that the public interest and necessity demand that any public utility owned by the municipal corporation should be sold, it may at any subsequent meeting by a vote of two-thirds of all its members order the proposition of selling the public utility to be submitted to the qualified voters of the municipal corporation at an election held for that purpose.

(Enacted by Stats. 1951, Ch. 764.)

10053.
  

The ordinance calling the special election shall recite the object for which the election is to be held, the purpose for which the proceeds of the sale are proposed to be expended, the manner of holding the election, and the manner of voting for or against the sale of the public utility. In all particulars not recited in the ordinance the election shall be held as provided for by law for holding municipal elections in such municipality.

(Enacted by Stats. 1951, Ch. 764.)

10054.
  

The ordinance shall be published once a day for at least 12 days in a newspaper published at least six days a week in the municipality or at least once a week for two weeks in a newspaper published less than six days a week in the municipality. The insertion each week for two succeeding weeks is a sufficient publication in a newspaper published less than six days a week. The first publication of the ordinance shall be at least two weeks prior to the date mentioned in the ordinance for holding the election. In municipalities where no such newspaper is published the ordinance shall be posted in three public places therein for two succeeding weeks next before the day fixed for the election.

(Enacted by Stats. 1951, Ch. 764.)

10055.
  

The votes of two-thirds of all voters voting at the election are necessary to authorize the sale of the public utility described in the ordinance calling the election.

(Enacted by Stats. 1951, Ch. 764.)

10056.
  

The resolution and ordinance may provide for the sale of more than one public utility, but in such case the question of selling each public utility shall be separately stated in the ordinance and upon the election ballots.

(Enacted by Stats. 1951, Ch. 764.)

10057.
  

If the vote cast at the election is in favor of the sale of the public utility mentioned in the ordinance calling for the election, the legislative body of the municipal corporation shall immediately proceed to sell the public utility, and shall fix a date on which bids for the sale of the public utility will be received and the manner of filing bids. The legislative body shall cause notice of the sale to be published for at least two weeks next before the day fixed for receiving bids in the manner provided in Section 10054 for publication of the ordinance calling for the election. If no newspaper is published in the municipality, the notice shall be posted in three public places therein for two succeeding weeks next before the date fixed for receiving bids.

(Enacted by Stats. 1951, Ch. 764.)

10058.
  

At the date fixed for receiving bids the legislative body of the municipal corporation shall open and examine all bids received and may sell the public utility to the highest and best bidder therefor. If the bids received, in the opinion of the legislative body are inadequate or disproportionate to the value of the public utility the legislative body may reject all bids and may proceed to give new notice of the sale of the public utility in the manner provided in Section 10057.

(Enacted by Stats. 1951, Ch. 764.)

10059.
  

When a bid is accepted by the legislative body of the municipal corporation, the legislative body may by resolution authorize its mayor, or president of its board of trustees, or other chief executive officer, and its clerk to execute, acknowledge, and deliver on behalf of the municipal corporation, in its name and under its corporate seal, a deed conveying the public utility to the successful bidder upon receiving from him in cash the full amount of the bid and the promise of the bidder to continue to operate the public utility. The deed shall operate to convey to the successful bidder all of the municipality’s right, title, interest, and estate in and to the public utility described in the deed.

(Enacted by Stats. 1951, Ch. 764.)

10060.
  

The proceeds of the sale of the public utility shall be placed in the municipal treasury and shall be applied exclusively for the purposes and objects mentioned in the ordinance calling the election for the sale of the public utility.

(Enacted by Stats. 1951, Ch. 764.)

10061.
  

(a) Notwithstanding Article 1 (commencing with Section 10001) and this article, and except as provided in Section 37420.5 of the Government Code, a municipal corporation, by following the provisions of this section, may lease, sell, or transfer all or part of a public utility owned and operated by it for furnishing water or sewer service. As used in this section, “municipal corporation” means a city or a city and county.

(b) Any municipal corporation owning and operating a public utility for furnishing water or sewer service, a part of which or all of which public utility is operated and used for furnishing water or sewer service outside the boundaries of the municipal corporation, may lease, sell, or transfer, for just compensation, all or any part of the portion of the public utility located outside the boundaries of the municipal corporation to any other municipal corporation, public agency, water corporation, or sewer system corporation upon the terms and conditions agreed upon by the selling municipal corporation if, by resolution adopted by a majority of its legislative body, it has determined that the public utility, or portion thereof, is not necessary for supplying water or sewer service to its own inhabitants and if the acquiring entity by resolution adopted by a majority of the members of its legislative body or board of directors has concurred in the lease, sale, or transfer and the terms and conditions thereof and if the acquiring entity will be bound to render water or sewer service to the persons formerly served through the system being sold on terms and conditions that are just and reasonable and do not unreasonably discriminate against the customers of the acquired entity.

(c) Any municipal corporation owning and operating a public utility for furnishing water or sewer service may sell or transfer, for just compensation, all or any part of the public utility located inside its municipal boundaries to any other municipal corporation, public agency, water corporation, or sewer system corporation upon the terms and conditions agreed upon by the selling municipal corporation, if the sale or transfer is approved as follows:

(1) The municipal corporation, by resolution adopted by a majority of its legislative body, has determined that the public utility, or portion thereof, is not necessary for supplying water or sewer services to its own inhabitants, or that its inhabitants will be provided with equal or better service by the acquiring entity on terms that are just and reasonable and do not discriminate against the customers of the acquired entity, and orders the issue submitted to the qualified voters of the municipality at a special or general election held for that purpose.

(2) The acquiring entity by resolution adopted by a majority of its legislative body or board of directors has concurred in the sale or transfer and in the terms and conditions thereof.

(3) The sale or transfer is approved by a majority of all voters voting on the issue in the election held for that purpose.

(4) The municipal corporation, public agency, water corporation, or sewer system corporation proposing to acquire a municipal corporation public utility for furnishing water or sewer service shall disclose to the customers of the public water or sewer system to be acquired, not less than 30 days prior to the date of election for formal approval of the acquisition, a written statement which includes all of the following:

(A) A summary of the price and terms of the proposed acquisition.

(B) A comparison of the applicable water or sewer charges before and after the proposed acquisition.

(C) The estimated savings to be achieved or additional costs expected to result, or both, from the proposed acquisition.

(d) Subject to subdivision (e), a municipal corporation may lease a public utility furnishing water or sewer service by a resolution adopted by a majority of its legislative body and without lease term or other restrictions stated in any other law.

(e) A municipal corporation acting pursuant to subdivision (c) shall specify the manner of soliciting and filing, and the method of evaluating, proposals for the acquisition of the public utility. Upon receipt and staff evaluation of a proposal or proposals the municipal corporation, if it determines that the proposal or proposals are responsive, shall schedule a public hearing, and notice thereof shall be published in accordance with Section 6066 of the Government Code. At the hearing, the municipal corporation shall examine proposals received and staff recommendations, and without lease term or other restrictions, may lease, sell, or transfer, for just compensation, the public utility to the entity that the municipal corporation finds best qualified to continue to provide equal or better service to the customers of the system. If the resolution proposes a sale, the resolution shall place the question on the ballot at the next regularly scheduled election or at a special election called for that purpose. The municipal corporation may, in its sole discretion, reject all proposals.

(f) Any agreement entered into before September 17, 1965, between municipal corporations for the lease, sale, or transfer of all or any part of a public utility owned and operated by one of the municipal corporations and furnishing water service to the inhabitants of the municipal corporation to which the lease, sale, or transfer is made is hereby validated.

(Amended by Stats. 2018, Ch. 866, Sec. 3.5. (AB 2339) Effective January 1, 2019.)

PUCPublic Utilities Code - PUC2