When a rural community creates a fire district to serve an area previously served by...

According to GASB Statement No. 69 (Government Combinations and Disposals of Government Operations), a transfer of operations occurs when one government relinquishes or ceases operations and another government assumes those operations, but no significant consideration (money, assets, or liabilities) is exchanged.

In this case, the fire district is assuming responsibility for fire protection without receiving funds or assets from the county. That aligns with the definition of a transfer of operations — not a merger or acquisition.

Relevant References:

GASB Statement No. 69 – Government Combinations and Disposals of Government Operations

GASB Codification Section G60 – Combinations and Transfers

GFOA Guidance on Intergovernmental Restructuring

Answer: C. a transfer of operations