Texas Special District Local Laws Code - SDLL § 11010.106. Contracts

(a) The authority may contract with any person to carry out a power authorized by this chapter.

(b) A person who enters into a contract with the authority may pledge to the payment of the contract any source of revenue that may be available to the person, including ad valorem taxes, if the person has the authority to impose those taxes.

(c) Payments made under a contract with the authority constitute an operating expense of the person served under the contract, unless otherwise prohibited by a previously outstanding obligation of the person. To the extent a person pledges funds to the payment of the contract that are to be derived from the person's own water system, the payments constitute an operating expense of that system.