§ 40-33-16 — Municipality may purchase water for distribution

1. Any city owning a system for the distribution of water for fire protection and other
public purposes and for selling water to its inhabitants and industries, but for which the
water supply is unsuitable or inadequate, may contract to purchase water at wholesale
for those purposes from any person, firm, public or private corporation, or limited

liability company able and willing to furnish the same, upon the terms and during the
period, not exceeding forty years, as the city governing body deems appropriate. The
contract must be authorized by an ordinance submitted to the voters for approval by a
majority of those voting on the proposition before it takes effect. Pursuant to the
ordinance and contract, the city may bind itself:
a. To establish and maintain rates and charges for supplying water by it to its
inhabitants and industries, either according to a prescribed schedule agreed upon
or sufficient to produce net stated amounts for specified periods during the life of
the contract, or both, and to appropriate and use the same for payments to
become due under the contract, and, if the contract so provides, the city is
obligated to pay for the water solely out of the net revenues;
b. To pay, at an agreed rate or rates, for all water taken by the city under the
contract and not resold by it; and
c. To do and perform any other acts or things the governing body deems reasonable
and appropriate for the procurement of the water on the most efficient and
economical basis.
2. Notwithstanding subsection 1, contracts to purchase water from the water supply
system created by the Red River valley water supply project may have a term
exceeding forty years and, if executed in relation to the initial construction of the
system, need not be submitted to the voters for approval.
3. If any payments under any contract are to be made solely out of net revenues, the
contract may fix and prescribe the method or basis on which net revenues are to be
computed.