Oregon Revised Statutes Cities § 222.520

(1) Whenever a part less than the entire area of a district named in ORS 222.510 becomes incorporated as or annexed to a city in accordance with law and the city, after the incorporation or annexation, will provide for the service to the part of the district that the district provided before the incorporation or annexation, the city may cause the part to be withdrawn from the district in the manner set forth in ORS 222.120 or at any time after the incorporation or annexation in the manner set forth in ORS 222.524. Until withdrawn, the part of the district incorporated as or annexed to the city shall continue to be a part of the district.

(2) The part withdrawn pursuant to subsection (1) of this section is not relieved from liabilities and indebtedness previously contracted by the district. For the purposes of paying the liabilities and indebtedness of the district, property in the part withdrawn shall continue to be subject to assessment and taxation uniformly with property in the area remaining in the district. The city of which it became a part shall, however, assume such obligations if the obligations assumed do not bring the total of the city's obligations above any applicable limitations prescribed by statute. When the city assumes the obligations it shall be liable to the district for one of the following, at the option of the city: