§ 11-97-16 — Utility Services Agreements; Incurring Indebtedness by Governmental Users; Enforceability of Utility Services Agreements

(a) Any county or municipality, or any instrumentality of either thereof, if authorized by resolution or ordinance of its governing body, may enter into one or more utility services agreements with a provider or providers pursuant to which such provider or providers shall provide one or more utility services for, or for the benefit of, any such governmental user that is a party to such utility services agreement. Any such utility services agreement may provide for the purchase by the governmental user thereunder of all or any part of the capacity, capability, or output of the facilities used to provide the applicable utility services. Since the receipt of utility services by a governmental user pursuant to a utility services agreement affords such governmental user the benefits of such utility services without the burdens of ownership and operation of the facilities for the provision of such utility services, and since the payments by such governmental user under such utility services agreement will constitute, in whole or in part, the source of repayment for any financing of the facilities for the provision of such utility services, any utility services agreement may provide (i) that the governmental user thereunder shall be obligated to make the payments required of it by such utility services agreement whether or not the applicable facilities are completed, operable, or operating and notwithstanding the suspension, interruption, interference, reduction, or curtailment of the capacity, capability, or output, as in the case may be applicable, of such facilities or the utility services contracted for, the nonperformance or nondelivery of the utility services contracted for, or the inability, for any reason, of the governmental user to receive or partake of the utility services so contracted for, and (ii) that the payments by the governmental user under such utility services agreement shall not be subject to any reduction, whether by offset or otherwise, and shall not be conditioned upon the performance or nonperformance by the provider or providers under such utility services agreement. Any utility services agreement pursuant to which utility services are to be provided to more than one governmental user may also provide that if one or more of such governmental users shall default in the payment of its or their obligations thereunder, then in such event the other governmental user or users that are parties to such utility services agreement shall be required to accept and pay for, and shall be entitled proportionately to and may use or otherwise dispose of, the utility services (or the capacity, capability, or output thereof) which was to be received by the defaulting governmental user. Any utility services agreement may provide that the obligation of any governmental user to make payments thereunder in respect of utility services shall be as absolute and unconditional as the obligation of such governmental user to repay money that it borrowed directly on its own credit for the purpose of financing the acquisition of facilities that would be used to provide utility services equivalent to those proposed to be provided pursuant to such utility services agreement. Any utility services agreement may extend for a period not exceeding 40 years from the date that such utility services agreement is entered into.
(b) It is hereby recognized that this chapter confers upon any governmental user the right to incur payment obligations under a utility services agreement that may constitute debt within the meaning of constitutional limitations and other applicable laws of the state, but, that fact notwithstanding, nothing contained in this chapter shall be construed
(1) To cause any such debt to lose any exemption from any constitutional debt limit to which, absent any claimed effect of any provision of this chapter, it would be entitled by virtue of the fact that it was incurred for the purpose of providing waterworks, sewers, or sewerage, or
(2) To prevent any governmental user from entering into a utility services agreement which provides that payments thereunder due in any fiscal year shall be payable only out of the revenues received by such governmental user during such fiscal year.
(c) In the event of any failure or refusal on the part of any governmental user to perform punctually any covenant or obligation contained in any utility services agreement, the provider under such utility services agreement shall have the right (1) to recover damages from such governmental user through an action at law or (2) to enforce performance by such governmental user of such covenant or obligation through any legal or equitable process, including mandamus or specific performance.

Legislative History

(Acts 1984, No. 84-314, p. 695, §16.)