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Post Merger Bylaws

VOGEL LAW FIRM
From: Monte L. Rogneby

I have been asked to give an opinion on the validity of the Bylaws of the North Prairie Regional Water District (NPRWD) following the merger of the North Central Regional Water District and the North Prairie Rural Water District. It is my opinion that the Bylaws proposed by NPRWD to NPRWD's Participating Members, as amended by the Participating Members at the annual meeting of Members held on May 10, 2021, are valid and in-effect. They control the governance of the NPRWD. It is my opinion that NPRWD substantially complied with the requirements of N.D.C.C. § 61-35-18 concerning the District adopting bylaws after the merger.

FACTS

  1. On December 19, 2019, the North Central Regional Water District adopted a Resolution Approving Merger of the District with the North Prairie Rural Water District to form the
  2. On December 19, 2019, the North Prairie Rural Water District adopted a Resolution Approving Merger of the District with the North Central Regional Water District to form
  3. On March 24, 2020 the State Engineer approved the merger and the formation of the NPRWD effective May 1, 2020.
  4. Prior to the Merger the bylaws of the North Prairie Rural Water District and the North Central Regional Water District were substantially the same.
  5. After the merger, NPRWD created new bylaws for the NPRWD which were substantively the same as the bylaws for the two merged Districts.
  6. Because of the declared public health emergency in the State of North Dakota in 2020, after the merger, NWRWD did not hold an annual meeting in 2020.

 

  1. The NWRWD held its first annual meeting following the merger on May 10, 2021. The meeting notice indicated under New Business "Bylaw change." At the meeting, the Participating Members were presented with the Bylaws for the The Participating Members also considered two amendments to the Bylaws. The Participating Members approved the Bylaws, with amendments, as presented. No Participating Member made a motion to make any other amendments or proposed any alternative bylaws.
  2. NPRWD Director Crystal Hendrickson has raised as an issue whether the NWRWD has in-effect, valid bylaws. In an email to me dated January 18, 2024, Director Hendrickson claims the District failed to comply with the requirements of D.C.C. § 61-35-09, which Director Hendrickson claims required the District to hold a special meeting within 30 days "after election of the original board."
  3. D.C.C. § 61-35-18(3) governs the merger of two or more water districts it provides:
  4. Boards of two or more districts by concurrent action and by approval of the department of water resources may merge their districts into one. In case of merger, the members of the boards of the merged districts may serve until the next annual meeting at which time the district shall comply with the requirements of section 61-35-08 regarding the number and eligibility of directors, adopt new bylaws, and set the terms of the new board according to section 61-35-10. The resulting district shall take over all the assets and legal liabilities of the districts joining in the merger. Obligations of any district secured by the revenue of the systems operated by the district must continue to be required, or a sinking fund must be established for that purpose created from revenue from the system operated over the same area by the resulting district in accordance with the laws under which the obligations were issued, until all obligations of the old district have been retired. (Emphasis added.)
  5. By its plain terms, Section 61-35-18(3) provides, as it relates to the merged district's bylaws, that at the next annual meeting the district will adopt new bylaws.
  6. It is my opinion that the provisions ofN.D.C.C. § 61-35-09, Bylaws Submitted at Special Meeting, is not applicable. That section provides, in part:

Within thirty days after election of the original board, proposed bylaws must be submitted for adoption at a special meeting of members of the district, written notice of which must be mailed to each member. Members present at the special meeting may adopt or amend any of the proposed bylaws, and may propose and adopt alternative or additional bylaws by a majority vote. The bylaws may subsequently be amended at any annual or special meeting of the participating members of the district. (Emphasis added.)

 

  1. Section 61-35-18(3) does not direct a new merged district to hold a special meeting or make any reference to the requirements of Section 61-35-09, although it does make specific reference to the requirements of both N.D.C.C. §§ 61-35-08 and 61-35-10. If the legislature intended for the requirements D.C.C. § 61-35-09 to apply post merger, the legislature would not have indicated that the Participating Members adopt bylaws at the "next annual meeting" and the legislature would have made specific reference to Section 61-35-09 as it did with Sections 61-35-08 and 61-35-10. Additionally, Section 61-35-09, specifically requires a special meeting after "election of the original board." No "original board" was elected as part of the merger.
  2. The next annual meeting following the merger was held in May The bylaws for the District were on the agenda as were proposed amendments to make changes to reflect the merger. Although the District could have more clearly presented the post-merger bylaws to the Participating Members for adoption, it is my opinion that the District substantially complied with the post-merger requirements of N.D;C.C. § 61-35-18(3). It is my opinion that inherent in the Participating Members' approval of amendments to the Bylaws at the annual meeting in 2021 is the Members' adoption of the Bylaws as proposed.
  3. The interpretation of a statute is a question of law. In re R.A., 2011 ND 119, 24, 799 N.W.2d 332. The North Dakota Supreme Court looks at the plain language of the statute and gives each word its ordinary Id. The Supreme Court presumes the legislature did not intend an absurd or ludicrous result or unjust consequences and it construes statutes in a practical manner, giving consideration to the context of the statute and the purpose for which it was enacted. Id.
  4. In similar circumstances, when reviewing the validity of ordinances when statutory requirements have not been strictly complied with, the North Dakota Supreme Court has held that a political subdivision "does not have to strictly comply with all post-enactment statutory procedures." See Ramsey County Farm Bureau v. Ramsey County, 2008 ND 175, 12, 755 W.2d 920. In Ramsey County Farm Bureau, the Supreme Court held that even with mandatory requirements for adopting an ordinance only a "substantial failure to comply" will render the ordinance invalid. Id. The Court explained that strict compliance

is not required if it will result in a harsh, unfair or absurd result.

  1. The post-merger adoption requirement for the bylaws is to allow the Participating Members an opportunity to review and change the post-merger bylaws. Here, those bylaws were virtually identical to both districts' pre-merger bylaws. The Participating Members were given notice that the bylaws were on the agenda at the 2021 Annual Meeting and the Participating Members in fact considered the bylaws and voted in favor amendments related to the merger.

CONCLUSION

It is my opinion that the NPRWD substantially complied with the requirements of North Dakota law and the District's Bylaws were properly adopted.