§ 46-15.1-7. Purchases from and leases, pledges and sales to others.
(a) Any city, town, district, or other municipal, quasi municipal, or public or private
corporation or company engaged in the water supply business in Rhode Island is authorized,
from time to time, to sell or otherwise convey to the board any water supply facilities
held by that entity, and to lease from the board with or without an option to purchase,
or contract with the board for the use of any water supply facilities, or any interest
therein, held by the board under this chapter, or to contract to purchase water to
be supplied by the board under this chapter. Any city, town, district, or other municipal,
quasi municipal, or public or private corporation or company engaged in the water
supply business in Rhode Island and constituting a "public utilityâ€� within the meaning of § 39-1-2(a)(20) is further authorized to pledge to the board water fees and charges. The provisions
of any other laws or ordinances, general, special, or local, or of any rule or regulation
of the state or any municipality, or of any municipal charter provision, restricting
or regulating in any manner the power of the state or any municipality to lease (as
lessee or lessor) or sell or convey property, real, personal, or mixed, or to pledge
water fees and charges shall not apply to leases and sales made with the board pursuant
to this chapter.
(b) Any city, town, district, or other municipal, quasi municipal, or public or private
corporation or company which so leases water facilities from the board, or so contracts
with the board for the use thereof, is authorized, from time to time, to contract
with any other public or private water system for the purchase or sale of water to
be conveyed or processed through or in such facilities, and the latter is similarly
authorized to enter into a contract with the former.
(c) Any lease, pledge agreement or contract under this section shall be for a term not
exceeding fifty (50) years. A lease, pledge agreement, or contract may be made by
a city, town, or district hereunder, either prior or subsequent to the making of any
appropriations which may be needed to carry out the obligations of the city, town,
or district under the lease, pledge agreement, or contract. Any such lease, pledge
agreement, or contract shall provide for cooperative undertakings between the city,
town or district and the board regarding the construction or installation of facilities
for water supply being financed.
(1) Notwithstanding any contrary provisions of any other laws or ordinances, general,
special or local, or of any rule or regulation of the state or any municipality, or
any municipal charter provision, restricting in any manner the power of a municipality
to incur debt, the obligations of any city, town, or district, under any lease, pledge
agreement or contract shall not be considered indebtedness within the meaning of any
limitation of indebtedness or of any provision relating to the manner of authorizing
or incurring indebtedness.
(2) Pledges or grants of security interests by a city, town or district hereunder shall
be valid and binding from the time when the pledge or grant in security interest is
made; the water fees and charges or other monies so pledged and then held or thereafter
received by such city, town or district shall be immediately subject to the lien of
the pledge without any physical delivery thereof, or further act; and the lien of
any such pledge or grant of a security interest shall be valid and binding as against
all parties having claims of any kind in tort, contract, or otherwise against such
city, town or district, irrespective of whether the parties have notice thereof.
(3) The agreement by which a pledge or grant of a security interest is created need not
be filed or recorded except in the records of the board, and no filing need be made
under the Uniform Commercial Code.