Arkansas Code Title 14. Local Government § 14-234-108. Certain cities--Sale--Purchase--Water

(a)(1) A city of the first class owning or operating a waterworks system may sell, in its governmental capacity, water at contractual rates to another municipality of this state or to an improvement district created under the laws of this state.

(2) A municipality of this state or an improvement district created under the laws of this state may purchase, in its governmental capacity, water at contractual rates from a city of the first class of this state and may expend the necessary funds to connect its distribution system with the supply or other mains of the selling municipality.

(b)(1) The contract between two (2) municipalities of this state for the sale and purchase of water or between a municipality of this state and an improvement district created under the laws of this state for the sale and purchase of water shall be in writing, shall be authorized by ordinances adopted by the respective governing bodies of the contracting municipalities or by ordinance adopted by the governing body of the contracting municipality and by resolution adopted by the board of commissioners of the contracting improvement district, and shall be signed by the mayor of each contracting municipality and by the chair of the board of each contracting improvement district.

(2) Unless the Arkansas Natural Resources Commission is involved in the financing and determines that a different form or length of contract would be best in meeting the long-term water supply needs of the contracting parties, the contract may be for a term not to exceed twenty (20) years and may fix by its terms the rate or rates to be paid for the water for the entire term of the contract or may fix the rate or rates for the first year, two (2) years, or five (5) years, with appropriate provisions for arriving at the rate or rates for each succeeding one-year, two-year, or five-year period.

(3) The contract may also contain other appropriate provisions which will protect the respective interests of the contracting parties.