1.    If a water service agreement between the district and the city is not executed within sixty days after the city notifies the district that a city water service area plan has been developed, the matter must be submitted to a committee for mediation. The committee must be comprised of a mediator retained jointly by the city and the district, two members appointed by the governing body of the city, and two members appointed by the district. The retained mediator shall arrange and preside over the mediation proceedings.

2.    If the mediation committee is unable to resolve the dispute to the satisfaction of the parties involved, either party may petition the office of administrative hearings to appoint an administrative law judge to determine the terms of the water service agreement. Before a hearing may be held, at least two weeks’ written notice must be given to the parties involved in the dispute. At the hearing, the retained mediator who presided over the mediation proceedings may provide information to the administrative law judge on the dispute between the parties involved and any proposed resolutions or recommendations made by a majority of the members appointed to the committee. Any resident of or person owning property in a city or district involved in the dispute, or a representative of such a resident or property owner, and any representative of a city or district involved, may appear at the hearing and present evidence on any matter to be determined by the administrative law judge. A decision by the administrative law judge must consider the following factors related to water service in the annexed area in making a decision under this subsection:

a.    The recommendation of the mediation committee; b.    The firefighting flow capacity of the water system; c.    The anticipated growth patterns of the district and city involved in the dispute; d.    Special conditions or needs, including topographic or physical features influencing service; e.    The system capacity and trunk main delivery structure of each provider; f.    The age, condition, and worth of the affected existing infrastructure; g.    Outstanding debt attributable to current users; h.    The impact on future revenues lost from existing and future customers; i.    Whether development would have occurred without annexation; and

j.    Any other factor determined to be relevant by the administrative law judge.