Section 264.875 - Assumption of debts and obligations of district upon dissolution(1) An irrigation district within which a water district is situated, or a city supplying water to a water district, may enter into a written agreement with a water district contemplating dissolution undertaking to assume, in the event of such dissolution, all of the outstanding debts and obligations of the water district and to continue to furnish water to the inhabitants of the dissolving district for domestic and municipal use for a term therein specified, not to exceed 25 years. Subject to the provisions of this section, the successor city shall, if the dissolution is approved, have the powers and assume the responsibilities, with reference to domestic water supply, as are conferred and imposed upon cities under ORS 223.005 to 223.105, 223.205 to 223.930 and ORS chapter 225. Any person entitled to water service within the area of the dissolved district has the same remedies at law or in equity to enforce the rights of the person to water supply service as are available to enforce the right to water service within the city.(2) The successor city or district shall furnish domestic water supply and service to persons owning or occupying property within the dissolved district on the same terms and conditions as in the case of those owning or occupying property within the city, or elsewhere within the irrigation district. If the district assets and obligations are transferred to a city, the city may charge a rate for the service that is no more than the rate which is uniformly applied to all users in similar classifications outside the city. No such differential rate may be charged, however, unless such a differential is provided for, and specifically limited, by the terms of the agreement made prior to the dissolution. Nothing in this section authorizes a city or an irrigation district to levy an ad valorem real property tax on property outside the city or district.(3) Any debts or obligations assumed by the successor city or by the irrigation district by reason of, or during the period of, its commitment under the agreement shall bind the city or irrigation district until they are fully paid and discharged. No contract shall be effective unless all of the terms thereof are reduced to writing, signed by the entities, and filed with the county clerk as a part of and at the time the findings and plan of dissolution are filed under ORS 198.925. 1971 c.601 §5; 1983 c.740 §67