Ark. Code Ann. § 25-20-101 Title.
This chapter may be cited as the “Interlocal Cooperation Act”.
Interlocal Cooperation Act
Ark. Code Ann. tit. 25, ch. 20
in effectArk. Code Ann. § 25-20-102 Purpose.
It is the purpose of this chapter to permit local governmental units to make the most efficient use of their powers by enabling them to cooperate with other localities on a basis of mutual advantage and thereby to provide services and facilities in a manner and pursuant to forms of governmental organization that will accord best with geographic, economic, population, and other factors influencing the needs and development of local communities.
Ark. Code Ann. § 25-20-103 Definitions.
As used in this chapter:
(1) “Public agency” means any:
(A) School district;
(B) Political subdivision of this state;
(C) Agency of the state government or of the United States;
(D) Political subdivision of another state;
(E) Water district created under the provisions of The Regional Water Distribution District Act, § 14-116-101 et seq.;
(F) Governing body of a municipal electric utility as defined in § 25-20-402; and
(G) Fire department organized under the laws of this state if the fire department:
(i) Offers fire protection services to unincorporated areas; and
(ii) Has received approval by its quorum court for participation in an interlocal cooperation agreement;
(2) “Retail customer” means a person other than a municipality, improvement district, or other entity that sells and distributes water subject to regulation by the Department of Health who:
(A) Maintains a service account with a public body formed under the Consolidated Waterworks Authorization Act, § 25-20-301 et seq., for the provision of water to a person or the occupants of a single-family dwelling, multi-tenant dwelling, business premises, or government facility; and
(B) Is not explicitly permitted to resell potable water to another person;
(3) “State” means a state of the United States and the District of Columbia;
(4) “Storm water system” means all or any portion of the collective facilities and parts designed, organized, and implemented for the collection, storage, transmission, and disposition of excess storm water runoff in its entirety, or any integral parts thereof, that is formed under the authority of state law and includes without limitation inlets, street gutters, roadway gutters, roadside ditches, channels, swales, above-ground drain pipes, underground drain pipes, natural waterways, conduits, and water impoundments;
(5) “Surplus water” means water available for distribution or sale aside from water necessarily required of the public body for distribution to its existing retail customers;
(6) “Wastewater system” means a wastewater and collection system formed under state law that includes without limitation land, mains, interceptors, collector lines, manholes, force mains, valves, pumping stations, pumps, treatment and pretreatment plants and units thereof, other real and personal property, buildings, structures, other improvements, and facilities as necessary or advisable for the proper and efficient operation of the wastewater system; and
(7) “Water system” means and includes a waterworks and distribution system in its entirety, or any integral parts thereof, which is formed under state law and includes without limitation land, mains, pipelines, hydrants, meters, valves, standpipes, storage tanks, storage basins, pumping tanks, intakes, wells, clear water wells, impounding reservoirs, lakes, watercourses, pumps, purification plants and units thereof, filtration plants and units thereof, as well as all other real and personal property, buildings, structures, and other improvements or facilities as necessary or advisable for the proper and efficient operation of the water system.
Ark. Code Ann. § 25-20-104 Agreements for joint or cooperative action — Authority to make — Requirements generally.
(a) Any governmental powers, privileges, or authority exercised or capable of exercise by a public agency of this state alone may be exercised and enjoyed jointly with any other public agency of this state which has the same powers, privileges, or authority under the law and jointly with any public agency of any other state of the United States which has the same powers, privileges, or authority, but only to the extent that laws of the other state or of the United States permit the joint exercise or enjoyment.
(b) Any two (2) or more public agencies may enter into agreements with one another for joint cooperative action pursuant to the provisions of this chapter. Appropriate action by ordinance, resolution, or otherwise pursuant to law of the governing bodies of the participating public agencies shall be necessary before the agreement may enter into force.
(c) Any agreement for joint or cooperative action shall specify the following:
(1) Its duration;
(2) The precise organization, composition, and nature of any separate legal or administrative entity created thereby, together with the powers delegated to it, provided that the entity may be legally created;
(3) Its purposes;
(4) The manner of financing the joint or cooperative undertaking and of establishing and maintaining a budget therefor;
(5) The permissible methods to be employed in accomplishing the partial or complete termination of the agreement and for disposing of property upon the partial or complete termination; and
(6) Any other necessary and proper matters.
(d) In the event that the agreement does not establish a separate legal entity to conduct the joint or cooperative undertaking, in addition to the items enumerated in subdivisions (c)(1) and (c)(3)-(6) of this section, the agreement shall contain the following:
(1) Provisions for an administrator or a joint board responsible for administering the joint or cooperative undertaking. In the case of a joint board, public agencies party to the agreement shall be represented; and
(2) The manner of acquiring, holding, and disposing of real and personal property used in the joint or cooperative undertaking.
(e) No agreement made pursuant to this chapter shall relieve any public agency of any obligation or responsibility imposed upon it by law, except that, to the extent of actual and timely performance thereof by a joint board or other legal or administrative entity created by an agreement made hereunder, performance may be offered in satisfaction of the obligation or responsibility.
(f)(1) Every agreement made under this section prior to and as a condition precedent to its entry into force shall be submitted to the Attorney General, who shall determine whether the agreement is in proper form and compatible with the laws of this state.
(2) The Attorney General shall approve any agreement submitted to him or her under this section unless he or she finds that it does not meet the conditions set forth in this section and shall detail, in writing addressed to the governing bodies of the public agencies concerned, the specific respects in which the proposed agreement fails to meet the requirements of law.
(3) Failure to disapprove an agreement submitted hereunder within sixty (60) days of its submission shall constitute approval thereof.
(g) Financing of joint projects by agreement shall be as provided by law.
(h) In addition to other specific grants of authority as provided in the Arkansas Constitution and statutes and in addition to the formal cooperation authorized by this chapter, cities, towns, counties, and other units of government are authorized to associate and cooperate with one another on an informal basis without complying with the detailed procedure set out in this section.
(i) In addition to the legal or administrative entities which may otherwise be legally created under Arkansas statutes, public agencies may create a separate legal entity in the form of a public body corporate and politic pursuant to:
(1) Section 25-20-201 et seq. for the purpose of constructing, operating, and maintaining a public library system;
(2) The Consolidated Waterworks Authorization Act, § 25-20-301 et seq., for the purpose of constructing, owning, operating, financing, and maintaining a consolidated waterworks system; or
(3) The Consolidated Wastewater Systems Act, § 25-20-501 et seq., for the purpose of constructing, operating, financing, and maintaining a consolidated wastewater system.
Ark. Code Ann. § 25-20-105 Agreements for joint or cooperative action — Filing — Interstate compacts — Liability for damages.
(a) Prior to its entry into force, an agreement made pursuant to this chapter shall be filed with the county clerk and with the Secretary of State.
(b)(1) In the event that an agreement entered into pursuant to this chapter is between or among one (1) or more public agencies of this state and one (1) or more public agencies of another state or of the United States, the agreement shall have the status of an interstate compact, but in any case or controversy involving performance or interpretation thereof or liability thereunder, the public agencies party thereto shall be real parties in interest.
(2)(A) The state may maintain an action to recoup or otherwise make itself whole for any damages or liability which it may incur by reason of being joined as a party therein.
(B) The action shall be maintained against any public agencies whose default, failure of performance, or other conduct caused or contributed to the incurring of damage or liability by the state.
Ark. Code Ann. § 25-20-106 Agreements for joint or cooperative action — Submission to and approval by state officer or agency controlling services or facilities.
(a) In the event that an agreement made pursuant to this chapter shall deal in whole or in part with the provision of services or facilities with regard to which an officer or agency of the state government has constitutional or statutory powers of control, the agreement, as a condition precedent to its entry into force, shall be submitted to the state officer or agency having the power of control and shall be approved or disapproved by him or her or it as to all matters within his or her or its jurisdiction in the same manner and subject to the same requirements governing the action of the Attorney General pursuant to § 25-20-104(f).
(b) This requirement of submission and approval shall be in addition to and not in substitution for the requirement of submission to and approval by the Attorney General.
Ark. Code Ann. § 25-20-107 Appropriation of funds — Supplying of personnel or services.
Any public agency entering into an agreement pursuant to this chapter may appropriate funds and may sell, lease, give, or otherwise supply the administrative joint board or other legal or administrative entity created to operate the joint or cooperative undertaking by providing personnel or services therefor which may be within its legal power to furnish.
Ark. Code Ann. § 25-20-108 Contract for services from another agency — Requirements — Limitations.
(a) Any one (1) or more public agencies may contract with any one (1) or more other public agencies to perform any governmental service, activity, or undertaking which each of the public agencies entering into the contract is authorized by law to perform alone, provided that the contract shall be authorized by the governing body of each party to the contract. The contract shall set forth fully the purpose, powers, rights, objectives, and responsibilities of the contracting parties.
(b) However, nothing in this chapter authorizes or shall be construed to authorize any public agency to enter into any contract, agreement, or undertaking with any other public agency to purchase, condemn, or otherwise acquire any plant, property, facilities, or business owned or operated by any regulated public utility or pipeline company or to jointly construct or operate any such plant, property, or facility.
Ark. Code Ann. § 25-20-201 Creation.
(a) Any two (2) or more public agencies are hereby authorized to create a public body corporate and politic as a separate legal entity for the purpose of constructing, operating, and maintaining a public library system.
(b) The governing body of each public agency wishing to form a public body corporate and politic shall, by ordinance or resolution, or otherwise pursuant to law, of the governing body of each participating public agency:
(1) Determine that it is in the best interest of the public agency in accomplishing the purposes of this subchapter to create a public body;
(2) Set forth the names of the public agencies which are proposed to form the public body;
(3) Specify any limitations on the exercise of the public body's powers;
(4) Specify the number of directors of the public body, the number of directors required from each public agency, and the voting rights of each director, which number and voting rights may vary by agency and director; and
(5) Approve the filing of an application with the Secretary of State to create the public body corporate and politic.
(c)(1) An application to create a public body corporate and politic shall then be prepared, setting forth:
(A) A request that a public body corporate and politic be created under this subchapter;
(B) The proposed name for the public body;
(C) The names of the participating public agencies;
(D) Any limitations on the exercise of the public body's powers;
(E) The number of directors of the public body;
(F) The number of directors required from each public agency; and
(G) The voting rights of each director.
(2) The application shall be deemed signed and approved by each public agency by attaching thereto a certified copy of the ordinance, resolution, or other action of each participating public agency.
(d)(1) The Secretary of State shall examine the application, and, if the Secretary of State finds that the name proposed for the public body is not identical with that of any other corporation, agency, or instrumentality of this state, so nearly similar as to lead to confusion and uncertainty, or otherwise deceptively misleading, the Secretary of State shall:
(A) Receive and file the application;
(B) Record it in an appropriate book of record in his or her office;
(C) Make and issue a certificate of incorporation under the seal of the state setting forth the names of the participating public agencies; and
(D) Record the certificate in an appropriate book of record in his or her office.
(2) A copy of the certificate of incorporation, certified by the Secretary of State, shall be admissible in evidence in any suit, action, or proceeding involving the validity or enforcement of, or relating to, any contract of the public body and shall be conclusive proof of the filing and contents of the certificate and the effective creation of the public body corporate and politic, absent fraud in the premises being established.
(e)(1) Any application filed with the Secretary of State pursuant to the provisions of this subchapter may be amended from time to time with the unanimous consent of the directors of the public body corporate and politic who are entitled to vote.
(2) The amendment shall be signed and filed with the Secretary of State in the manner provided in this section, whereupon the Secretary of State shall make and issue an amendment to the certificate of incorporation.
Ark. Code Ann. § 25-20-202 Board of directors — Executive director.
(a)(1)(A) Each public body corporate and politic shall be administered and governed by a board of directors, with each director residing within the jurisdiction of the public agency which he or she represents.
(B) Each director shall be appointed by the governing body of the public agency which he or she represents, with all vacancies being likewise filled within forty-five (45) days.
(2)(A) The directors shall receive no compensation for their services, but they shall be entitled to reimbursement of expenses incurred in the performance of their duties.
(B) No director may serve more than six (6) consecutive years.
(3) Before entering upon their duties, the directors shall take and subscribe to an oath of office swearing to discharge faithfully their duties in the manner provided by law.
(b)(1) The board of directors shall appoint a paid executive director, who shall be in charge of the daily operations of the public body and shall be responsible for submitting a budget to the board of directors for approval and the hiring, dismissal, and compensation of other staff.
(2) The board of directors shall have final approval of all budgets.
Ark. Code Ann. § 25-20-203 Powers.
(a) Unless its application provides otherwise, each public body shall have the power to:
(1) Have perpetual succession;
(2) Maintain such offices as it may deem appropriate;
(3) Execute and perform contracts;
(4) Apply for and receive permits, licenses, certificates, and approvals as may be necessary and construct, maintain, and operate facilities in accordance therewith;
(5) Employ the services of professionals;
(6) Purchase insurance;
(7) Purchase, receive, own, hold, improve, use, lease, sell, convey, exchange, transfer, assign, mortgage, pledge, or otherwise acquire, dispose of, or deal with, real or personal property or any legal or equitable interest therein in its own name;
(8) Apply for, receive, and use loans, grants, taxes, donations, and contributions from any public agency or other lawful source, including any taxes levied pursuant to any authority granted by the Arkansas Constitution or statutes, and amendments thereto, and any proceeds from the sale of bonds;
(9) Acquire by the exercise of the power of eminent domain any real property which it may deem necessary for its purposes, in the manner prescribed in §§ 18-15-1202 — 18-15-1207 or in the manner provided by any other statutory provisions for the exercise of the power of eminent domain; and
(10) Do any and all other acts and things necessary, convenient, or desirable to carry out the purposes of and to exercise the powers granted to the public body by this subchapter.
(b) A public body corporate and politic created as provided by this subchapter shall constitute an independent legal entity, and, notwithstanding any other provision of state law or any ordinance, resolution, or other action of any participating public agency to the contrary, none of the powers granted to a public body under the provisions of this subchapter or in its application for incorporation shall be subject to the further supervision or regulation or require the further approval or consent of any participating public agency.
Ark. Code Ann. § 25-20-204 Tax exempt status of property and income.
(a) Each public body corporate and politic created pursuant to this subchapter will be performing functions and will be a public instrumentality of the participating public agencies.
(b) Accordingly, all properties at any time owned by the public body and the income therefrom shall be exempt from all taxation in the state.
Ark. Code Ann. § 25-20-205 Immunity.
(a) This subchapter does not abrogate or in any other manner affect the immunity of the participating public agencies.
(b) Such immunity extends also to any public body corporate and politic created pursuant to this subchapter and to each director thereof.
Ark. Code Ann. § 25-20-206 Construction.
This subchapter shall be liberally construed to accomplish its intent and purposes and shall be the sole authority required for the accomplishment of its purposes. To this end it shall not be necessary to comply with the general provisions of other laws dealing with public facilities, their acquisition, construction, equipping, maintenance, operation, leasing, encumbering, or disposition.
Ark. Code Ann. § 25-20-207 Withdrawal.
(a)(1) If any public agency participating in a public body corporate and politic wishes to withdraw therefrom, the governing body of that public agency shall determine by ordinance or resolution, or otherwise pursuant to law, of the governing body, that it is in the best interest of the public agency to withdraw from the public body and give notice thereof to all directors of the public body and to the mayor, county judge, president, chair, or other chief executive of the governing body of each of the other public agencies.
(2) Each such governing body shall have ninety (90) days in which to determine, by ordinance or resolution, or otherwise pursuant to law, of the governing body, whether to dissolve the public body or continue without the withdrawing public agency.
(b) The notice of withdrawal shall become effective upon the earlier of:
(1) The date each public agency participating in the public body makes its determination, as provided in subsection (a) of this section; or
(2) The expiration of ninety (90) days.
Ark. Code Ann. § 25-20-301 Title.
This subchapter may be referred to and cited as the “Consolidated Waterworks Authorization Act”.
Ark. Code Ann. § 25-20-302 Creation.
(a) Any two (2) or more public agencies entering into an interlocal agreement under the Interlocal Cooperation Act, § 25-20-101 et seq., for the purpose of consolidating their waterworks systems are hereby authorized to create a public body corporate and politic as a separate legal entity for the purpose of constructing, owning, managing, operating, financing, improving, extending, acquiring, reconstructing, equipping, selling, leasing, contracting concerning, dealing in, disposing of, and maintaining the consolidated waterworks system.
(b) The governing body of each public agency wishing to create a public body under this subchapter shall approve, by ordinance or resolution or otherwise pursuant to law, the filing of an application with the Secretary of State to create a public body under this subchapter and approve an interlocal agreement specifying the matters set forth in § 25-20-104. Additionally, the interlocal agreement shall:
(1) Specify any limitations on the exercise of the public body's powers, including such matters, if any, as to which the participating public agencies reserve rights to approve, disapprove, or otherwise participate in any exercise of the public body's powers;
(2) Provide for such reasonable franchise fees, payments in lieu of taxes, or other payments by the public body to the participating public agencies as the public agencies may deem appropriate;
(3) Specify the number of commissioners of the public body, the terms of office of the commissioners, the manner of appointing or electing the commissioners, the residency requirements, if any, applicable to commissioners in addition to those set forth in this subchapter, and the voting rights of each commissioner. The voting rights may vary by commissioner; and
(4) Set forth such other matters, not inconsistent with this subchapter, with respect to the creation and operation of the public body as the participating public agencies may deem necessary or appropriate.
(c)(1) An application to create a public body under this subchapter shall then be prepared, setting forth:
(A) A request that a public body corporate and politic be created under this subchapter;
(B) The proposed name for the public body;
(C) The names of the participating public agencies;
(D) The number of commissioners of the public body;
(E) The manner in which commissioners of the public body will be appointed or elected and the residency requirements, if any, applicable to commissioners in addition to those set forth in this subchapter;
(F) The voting rights of each commissioner;
(G) Special procedures for amending the certificate of incorporation, if any; and
(H) Such other matters, not inconsistent with this subchapter, with respect to the creation and operation of the public body as the participating public agencies may deem necessary or appropriate.
(2) The application shall be signed on behalf of each participating public agency by an authorized official of the public agency.
(d)(1) The Secretary of State shall examine the application and, if the Secretary of State finds that the name proposed for the public body is not identical with that of any other corporation, agency, or instrumentality of this state, so nearly similar as to lead to confusion and uncertainty, or otherwise deceptively misleading, the Secretary of State shall:
(A) Receive and file the application;
(B) Record it in an appropriate book of record in his or her office;
(C) Make and issue a certificate of incorporation under the seal of the state setting forth the name of the public body and the names of the participating public agencies; and
(D) Record the certificate in an appropriate book of record in his or her office.
(2) A copy of the certificate of incorporation, certified by the Secretary of State, shall be admissible in evidence in any suit, action, or proceeding involving the validity or enforcement of, or relating to, any contract of the public body and shall be conclusive proof of the filing and contents of the certificate and the effective creation of the public body under this subchapter, absent fraud in the premises being established.
(e)(1) Any certificate of incorporation issued by the Secretary of State pursuant to the provisions of this subchapter may be amended from time to time in the manner provided in the certificate of incorporation then existing or, if the certificate of incorporation does not specify a procedure for its amendment, with the consent of a majority of the commissioners of the public body who are entitled to vote.
(2)(A) The amendment shall be signed by an officer or other authorized person of the public body, who shall certify that the certificate of incorporation has been duly amended in accordance with the procedures of this subchapter and, as applicable, in the manner prescribed in the then-existing certificate of incorporation.
(B) Upon filing of the amendment with the Secretary of State in the manner provided in this section, the Secretary of State shall make and issue an amendment to the certificate of incorporation.
Ark. Code Ann. § 25-20-303 Contributions of public agency properties.
(a)(1) Participating public agencies are authorized to contribute to a public body created under this subchapter such real and personal property of the participating public agencies as the participating public agencies shall deem necessary or appropriate to the ownership and operation of a consolidated waterworks system by the public body.
(2) However, any contributions of reserve funds held in trust under § 14-73-101 et seq. shall be made on the condition that the funds may be used only for the purposes described in the trust agreement and until so used shall remain in a trust fund complying with the requirements of § 14-73-101 et seq.
(3) Contributions of properties under this section shall be upon such terms and conditions and for such consideration as the participating public agencies may determine to be just and proper, it being within the participating public agencies' discretion to contribute property with or without monetary consideration.
(b) Participating public agencies shall have the power to execute any and all contracts, leases, deeds, bills of sale, easements, assignments, and other instruments of conveyance as may be required or convenient to exercise the powers granted in this section.
Ark. Code Ann. § 25-20-304 Board of commissioners.
(a)(1) Each public body created under this subchapter shall have a board of commissioners consisting of at least three (3) commissioners, with each commissioner residing within the jurisdiction of one (1) of the participating public agencies and otherwise meeting any residency requirements set forth in the public body's certificate of incorporation.
(2) Each commissioner shall be appointed or elected in the manner set forth in the public body's certificate of incorporation and shall serve a term of office as specified in the interlocal agreement.
(b) The commissioners shall receive no compensation for their services, but they shall be entitled to reimbursement of expenses incurred in the performance of their duties.
(c) Before entering upon their duties, the commissioners shall take and file with the Secretary of State an oath of office swearing to discharge faithfully their duties in the manner provided by law.
(d)(1) The board of commissioners shall meet and organize by electing one (1) of their number as chair, one (1) as vice chair, one (1) as secretary, and one (1) as treasurer, and those officers shall be elected annually thereafter in like manner.
(2) The duties of secretary and treasurer may be performed by the same commissioner.
(3) The secretary may cause copies to be made of all minutes and other records and documents of the public body. The secretary may give certificates under the official seal of the public body to the effect that the copies are true copies, and all persons dealing with the public body may rely upon the certificates.
Ark. Code Ann. § 25-20-305 Powers and duties of board of commissioners.
All powers of any public body created under this subchapter shall be exercised by, or under the authority of, and the business and affairs of the public body managed under the direction of, its board of commissioners, subject to any limitation set forth in the public body's certificate of incorporation or interlocal agreement. The duties of the board of commissioners shall include, but not be limited to:
(1) Appointing a chief executive officer, who shall not be a member of the board of commissioners, and shall set compensation and other terms of employment for the chief executive officer;
(2) Approving all budgets of the public entity;
(3) Adopting such rules and bylaws as the board of commissioners may deem necessary and expedient for the proper ownership and operation of the consolidated waterworks system, and altering, changing, or amending the rules and bylaws at its discretion; and
(4) Performing such other duties as shall be set forth in the interlocal agreement.
Ark. Code Ann. § 25-20-306 General powers of public body.
(a) In addition to exercising the powers set forth elsewhere in this subchapter, and unless its certificate of incorporation or interlocal agreement provides otherwise, each public body created under this subchapter shall have the power to:
(1) Have perpetual succession as a body politic and corporate;
(2) Maintain such offices as it may deem appropriate;
(3) Execute and perform contracts;
(4) Sue and be sued;
(5) Apply for and receive permits, licenses, certificates, and approvals as may be necessary and own and operate facilities in accordance therewith;
(6) Employ the services of all personnel necessary to its operations and, in connection therewith, adopt and implement such healthcare, disability, bonus, retirement, and other employee benefit plans as the board of commissioners shall deem appropriate;
(7) Employ the services of professionals;
(8) Purchase insurance, maintain reserves for self-insurance, and become self-insured for the payment of compensation under the Workers' Compensation Law, § 11-9-101 et seq., by compliance with the requirements of § 11-9-404(a)(2), provided that deposit of an indemnity bond, letter of credit, or securities shall not be required;
(9) Purchase, receive, own, hold, improve, use, lease, sell, convey, exchange, transfer, assign, mortgage, pledge, and otherwise acquire, dispose of, and deal with real and personal property and any legal or equitable interest therein in its own name;
(10) Apply for, receive, and use loans, grants, taxes, donations, and contributions from any public agency or other lawful source, including any proceeds from the sale of bonds;
(11) Borrow money on a secured or unsecured basis, and in connection therewith, issue bonds, promissory notes, or other evidence of indebtedness and make and deliver indentures, mortgages, pledges, security agreements, financing statements, and other instruments encumbering assets of the public body;
(12) Pay reasonable franchise fees, make payments in lieu of taxes, or otherwise make payments to the participating public agencies in such amounts as may be required or permitted by the participating public agencies;
(13) Exercise such other powers, privileges, and authorities as the participating public agencies shall have delegated to the public body by their interlocal agreement, subject to any restrictions imposed thereon by the interlocal agreement or applicable law;
(14) Have such other and further powers relating to the ownership and operation of a water system, a wastewater system, and a storm water system as are now by law given to the governing body of any participating public agency and do any and all other acts and things necessary, convenient, or desirable to carry out the purposes of, and to exercise the powers granted to, the public body by this subchapter;
(15) Own and operate, or operate on behalf of a municipality, county, corporation, organization, other public body, or entity authorized by law, any one (1) or more of the following:
(A) A storm water system;
(B) A water system; or
(C) A wastewater system;
(16) Purchase goods and services under applicable law for the public body; and
(17) Purchase professional services under § 19-65-101 et seq. or by any method of competitive bidding including without limitation reverse auctions.
(b) A public body created under this subchapter shall constitute a separate legal entity, but to the extent provided by state law or set forth in the certificate of incorporation of the public body or the interlocal agreement of the participating public agencies, shall be subject to the further supervision or regulation of, or require the further approval or consent of, any participating public agency.
Ark. Code Ann. § 25-20-307 Operation of consolidated waterworks system — Definition.
(a) “Consolidated waterworks system” means and includes real property, personal property, buildings, structures, improvements, equipment, and facilities of a system or systems of a public body formed under this subchapter.
(b)(1) Unless the interlocal agreement provides otherwise, a public body created under this subchapter shall have full authority to construct, own, manage, operate, finance, improve, extend, acquire, reconstruct, equip, sell, lease, contract concerning, deal in, dispose of, and maintain a consolidated waterworks system.
(2) The assets of the public body may be located inside and outside the jurisdictions of the public body's participating public agencies.
(c)(1) Unless the interlocal agreement provides otherwise, a public body created under this subchapter shall have full authority to fix, charge, and collect and from time to time change the rates for water, wastewater service, storm water service, and other goods and services provided by the public body.
(2) A public body shall have a reasonable time after its creation or after its expansion by the addition of a new participating public agency to equalize any differentials in rates among similarly situated classes of customers.
(3) It shall be a complete defense to any suit or claim based on the charging of differential rates for similarly situated classes of customers that:
(A) Within one (1) year of the creation or expansion of the public body, an independent expert completes a study of rates charged customers that shows a differential in rates among similarly situated classes of customers located within the jurisdictions of the participating public agencies, and the public body equalizes rates among similarly situated classes of customers within ten (10) years of the date of the rate study; or
(B) Within one (1) year of the creation or expansion of the public body, an independent expert completes an engineering study of the related infrastructure located within the jurisdiction of each participating public agency that identifies improvements needed to create a uniform infrastructure quality throughout the jurisdictions, rate differentials among otherwise similarly situated classes of customers are reasonably calculated to recover from customers located in the respective jurisdictions in which the improvements are made the costs incurred in making the improvements in such jurisdictions, and the public body equalizes rates among similarly situated classes of customers within ten (10) years after the date of the engineering study.
(d) The inability of a public body to rely upon either safe harbor defense set out in subdivisions (c)(3)(A) and (B) of this section shall not create any implication that the public body has failed to equalize any differentials in rates among similarly situated classes of customers within a reasonable period of time after its creation or expansion.
Ark. Code Ann. § 25-20-308 Out-of-area sales and services.
(a) Any public body created under this subchapter may:
(1) Extend its distribution system and provide water, wastewater service, storm water service, and other goods and services to any consumer located outside the jurisdictions of the public body's participating public agencies; and
(2) Sell surplus water to any municipality, improvement district, or other entity that sells and distributes water subject to regulation of the Department of Health, whether the municipality, improvement district, or other entity is located within or outside the jurisdictions of the public body's participating agencies.
(b) Sales of water, wastewater service, storm water service, and other goods and services authorized under this section may be made at rates and on other terms as the board of commissioners deems just and reasonable, and the rates need not be the same as the rates charged customers within the jurisdictions of the public body's participating public agencies.
Ark. Code Ann. § 25-20-309 Eminent domain.
(a) Any public body created under this subchapter may acquire by the exercise of the power of eminent domain any real property that it may deem necessary for its purposes, in the manner prescribed in § 18-15-301 et seq. or § 18-15-401 et seq., or in the manner provided by any other statutory provisions under which one (1) of the public body's participating public agencies may exercise a power of eminent domain.
(b) In exercising the power of eminent domain, the public body shall have the right by its agents or employees to peacefully enter upon any lands, structures, or rights-of-way to make surveys, tests, and measurements thereon, but is liable for any damage that may result by reason of its acts.
Ark. Code Ann. § 25-20-310 Improvements — Financing with bonds.
(a) Whenever any public body created under this subchapter shall own or operate a consolidated waterworks system and shall desire to acquire, construct, or equip improvements, betterments, and extensions thereto, it may issue revenue bonds under the provisions of this section to pay for them. The procedure for issuance of bonds shall be as provided in this section.
(b)(1) Bonds issued in accordance with this section shall be authorized by resolution of the board of commissioners.
(2) The bonds may be issued as registered bonds and may be exchangeable for bonds of another denomination or in another form.
(3) The bonds may:
(A) Be in such form and denominations;
(B) Have such date or dates;
(C) Be stated to mature at such time or times;
(D) Bear interest payable at such times and at such rate or rates;
(E) Be payable at such places within or without the state;
(F) Be subject to such terms of redemption in advance of maturity at such prices; and
(G) Contain such terms and conditions,
(4) The bonds shall have all the qualities of and shall be deemed to be negotiable instruments under the laws of the State of Arkansas, subject to provisions as to registration as set forth in this subsection.
(5) The authorizing resolution may contain any other terms, covenants, and conditions that the board of commissioners deems reasonable and desirable, including, without limitation, those pertaining to the:
(A) Maintenance of various funds and reserves;
(B) Nature and extent of any security for payment of the bonds;
(C) Custody and application of the proceeds of the bonds;
(D) Collection and disposition of revenues;
(E) Investing for authorized purposes; and
(F) Rights, duties, and obligations of the public body and the holders and registered owners of the bonds.
(c)(1) The authorizing resolution may provide for the execution of a trust indenture between the public body and any financial institution within or without the State of Arkansas.
(2) The trust indenture may contain any terms, covenants, and conditions that are deemed desirable by the board of commissioners, including, without limitation, those pertaining to the:
(A) Maintenance of various funds and reserves;
(B) Nature and extent of any security for the payment of the bonds;
(C) Custody and application of the proceeds of the bonds;
(D) Collection and disposition of revenues;
(E) Investing and reinvesting of any moneys during periods not needed for authorized purposes; and
(F) Rights, duties, and obligations of the public body and the holders and registered owners of the bonds.
(d)(1) Any authorizing resolution and trust indenture relating to the issuance and security of the bonds shall constitute a contract between the public body and holders and registered owners of the bonds.
(2) The contract and all covenants, agreements, and obligations therein, shall be promptly performed in strict compliance with the terms and provisions of the contract, and the covenants, agreements, and obligations of the public body may be enforced by mandamus or other appropriate proceeding at law or in equity.
(e)(1) The resolution shall fix the minimum rate or rates for water or other services provided by the consolidated waterworks system to be collected before the payment of all of the bonds, with exceptions as may be provided in the resolution, and shall pledge the revenues derived from the consolidated waterworks system or any specified portion of the consolidated waterworks system for the purpose of paying the bonds and interest.
(2) The rates to be charged for the water or other services of the consolidated waterworks system or the specified portion of the consolidated waterworks system with revenues pledged to the payment of the bonds shall be sufficient to provide:
(A) For the payment of all principal of and interest on all bonds as and when due;
(B) For the operation and maintenance of the consolidated waterworks system or the specified portion of the consolidated waterworks system with revenues pledged to the payment of the bonds; and
(C) An adequate depreciation account for the consolidated waterworks system or the specified portion of the consolidated waterworks system with revenues pledged to the payment of the bonds.
(f)(1) The proceeds derived from the sale of the bonds shall be used solely for the purpose of:
(A) Making betterments, improvements, and extensions to the consolidated waterworks system owned and operated by the public body;
(B) Paying interest on the bonds during the period of construction of the betterments, improvements, and extensions;
(C) Establishing any necessary reserves for the bonds;
(D) Paying the costs of issuing the bonds; and
(E) Paying any other costs and expenditures of whatever nature incidental to the accomplishment of the betterments, improvements, and extensions.
(2) The terms “betterments”, “improvements”, and “extensions” include all real property, personal property, buildings, structures, improvements, equipment, and facilities.
(g)(1) Bonds issued under the provisions of this section shall be payable solely from revenues derived from the consolidated waterworks system or any specified portion of the consolidated waterworks system.
(2) The bonds shall not in any event constitute an indebtedness of, nor pledge the faith and credit of, the State of Arkansas or the participating public agencies within the meaning of any constitutional provisions or limitations.
(3) It shall be plainly stated on the face of each bond that it:
(A) Is issued under the provisions of this subchapter;
(B) Does not constitute an indebtedness of the State of Arkansas or the participating public agencies within any constitutional provisions or limitations; and
(C) Is not backed by the full faith and credit of the State of Arkansas or the participating public agencies.
(4) The bonds and the interest thereon shall be exempt from all taxation, state, county, and municipal. This exemption includes income taxation and inheritance taxation.
(h)(1) The bonds may be sold in such manner, either at public or private sale, and upon such terms as the board of commissioners shall determine to be reasonable and expedient for effectuating the purposes of the public body.
(2) The bonds may be sold at a price the board of commissioners may accept, including sale at discount.
(i)(1) The bonds shall be executed by manual or facsimile signature of the chair of the board of commissioners and the manual or facsimile signature of the secretary of the board of commissioners or any other officer of the public body authorized to do so by resolution of the board of commissioners.
(2) In case any of the officers whose signatures appear on the bonds shall cease to be the officers before delivery of the bonds, their signatures nevertheless shall be valid and sufficient for all purposes.
(3) Each bond shall be impressed or imprinted with the seal of the public body.
(j)(1)(A) Prior to a proposed issuance of revenue bonds by a public body, the public body shall publish one (1) time in a newspaper of general circulation in the participating public agencies:
(i) Notice of the proposed issuance of bonds;
(ii) The maximum principal amount of bonds contemplated to be sold;
(iii) A general description of the project contemplated to be financed or refinanced with bond proceeds; and
(iv) The date, time, and location of a public meeting at which members of the public may obtain further information regarding the bonds and the project.
(B) Notice under subdivision (j)(1)(A) of this section shall be published at least ten (10) days prior to the date of the hearing described in subdivision (j)(1)(A)(iv) of this section.
(2) The chief executive officer of the public body or his or her designee shall be responsible for conducting the hearing and shall request all public comments that might pertain to the proposed issuance of bonds by the public body.
(3)(A) Upon compliance with the provisions of this section, other notice, hearing, or approval by the public body, any participating public agency or any governmental unit shall not be required as a condition to the issuance by a public body of its contemplated bonds or any interim financing with respect thereto.
(B) The provisions of the Revenue Bond Act of 1987, § 19-6-601 et seq., do not apply to this section and revenue bonds or interim financing issued hereunder.
(C) Notwithstanding the provisions of subdivision (j)(3)(A) of this section, the participating public agencies that have entered into the interlocal agreement forming the public body may, in the interlocal agreement, impose additional procedural requirements as a precedent for the issuance of revenue bonds by a public body, and if that is the case, the public body shall comply with those requirements prior to the issuance of the bonds and any interim financing.
all as the board of commissioners shall determine.
Ark. Code Ann. § 25-20-311 Lien in favor of bondholders.
(a) The payment of the principal of bonds issued under this subchapter and the interest thereon may be secured by a lien on and security interest in the consolidated waterworks system or any specified portion of the consolidated waterworks system.
(b) It shall not be necessary to the perfection of the lien and pledge for such purposes that the trustee in connection with the bond issue or the holders of the bonds take possession of the collateral security.
(c) Subject to whatever restrictions may be contained in the resolution or indenture governing the bonds, any holder of bonds issued under the provisions of this subchapter may enforce either at law or in equity the mortgage lien and may compel by proper suit the performance of the duties of the officers of the issuing public body set forth in this subchapter.
(d) If there be default in the payment of the principal of or interest on any of the bonds, any court having jurisdiction in any proper action may appoint a receiver to administer the consolidated waterworks system or the specified portion of the consolidated waterworks system pledged to the payment of the bonds on behalf of the public body, with power to charge and collect rates sufficient to provide for the payment of the bonds and the interest thereon and for the payment of the operating expenses and to apply the income and revenues in conformity with this subchapter and the resolution or indenture providing for the issuance of the bonds.
Ark. Code Ann. § 25-20-312 Refunding bonds.
(a) Bonds may be issued for the purpose of refunding any obligations issued under this subchapter or otherwise. The refunding bonds may be combined with bonds issued under the provisions of § 25-20-310 into a single issue.
(b) When bonds are issued under this section for refunding purposes, the bonds may either be sold or delivered in exchange for the outstanding obligations. If sold, the proceeds may be either applied to the payment of the obligations refunded or deposited in escrow for the retirement thereof either at maturity or upon any authorized redemption date.
(c)(1) All bonds issued under this section shall in all respects be authorized, issued, and secured in the manner provided for other bonds issued under this subchapter and shall have all the attributes of such bonds.
(2) The resolution or indenture under which the refunding bonds are issued may provide that any of the refunding bonds shall have the same priority of lien on the revenues pledged for their payment as was enjoyed by the obligations refunded thereby.
Ark. Code Ann. § 25-20-313 Securing deposit of public funds.
Bonds issued under this subchapter shall be eligible to secure the deposit of public funds.
Ark. Code Ann. § 25-20-314 No personal liability.
No commissioner or officer of the public body shall be liable personally for any reason arising from the issuance of bonds under this subchapter unless he or she shall have acted with a corrupt intent.
Ark. Code Ann. § 25-20-315 Recreational use of property.
Any public body created under this subchapter shall have the same powers as a municipally owned waterworks system to use its properties for recreational purposes, subject to any restrictions applying to a municipally owned waterworks system, as set forth in § 14-234-401 et seq. Consequently, the board of commissioners of a public body created under this subchapter shall be an “operating authority” as defined in § 14-234-401 , and any summons issued under § 14-234-401 et seq. shall be returnable to the municipal court of any municipality that is a participating public agency or is a municipality located within the jurisdiction of any participating public agency.
Ark. Code Ann. § 25-20-316 Zoning exemption.
Any public body maintaining facilities in an area zoned subsequent to the construction of the facilities may add to, alter, expand, or change the facilities upon that land, or upon lands immediately adjacent thereto, without regard to the zoning regulation for the area, if the board of commissioners deems the action necessary for the proper operation of its consolidated waterworks system.
Ark. Code Ann. § 25-20-317 Tax exempt status of property owned and income.
Each public body created under this subchapter will be performing functions and will be a public instrumentality of the participating public agencies. Accordingly, all properties at any time owned by the public body, and the income therefrom, shall be exempt from all taxation in the state.
Ark. Code Ann. § 25-20-318 Immunity.
This subchapter does not abrogate or in any other manner affect the immunity of the participating public agencies. The immunity shall extend also to any public body created under this subchapter and to each commissioner, officer, and employee thereof.
Ark. Code Ann. § 25-20-319 Franchise fees.
(a) Any participating public agency that is an Arkansas municipality or county, acting by ordinance or resolution of its governing body, may require a public body created under this subchapter to pay a reasonable franchise fee, upon which the public body may be permitted to occupy the streets, highways, or other public places within the jurisdiction of the public agency. The ordinance or resolution shall be deemed prima facie reasonable, provided that no franchise fee shall exceed ten percent (10%) of the public body's operating revenues that are attributable to gross income from water sales within the public agency's jurisdiction, unless agreed to by the public body or approved by the voters of the public agency.
(b) A participating public agency shall not require a public body created under this subchapter to pay a franchise fee under authority of other law.
(c) Any franchise fees charged under authority of this section shall be in addition to payments in lieu of taxes permitted by this subchapter.
Ark. Code Ann. § 25-20-320 Payments in lieu of taxes.
(a)(1) A public body created under this subchapter shall make annual payments to the general fund of each participating public agency that is an Arkansas municipality or county, in lieu of taxes, in return for police, fire, and health protection and in return for administrative and other services furnished by the public agency. The payments shall be an operation and maintenance expense of the public body.
(2) In each calendar year the payments shall equal the amount the public agency would have received from the public body as real property taxes for the preceding calendar year, if the public body's real property located in the public agency's jurisdiction, whether owned or leased by the public body, had been privately owned and subject to tax by the public agency. For purposes of this computation, the public body's real property shall be deemed to have an assessed value equal to twenty percent (20%) of book value as reflected by the public body's usual accounting procedures.
(b) Payments in lieu of taxes made under authority of this section shall be in addition to any franchise fees permitted by this subchapter.
Ark. Code Ann. § 25-20-321 Annual report and audit.
(a) Within the first one hundred eighty (180) days of each calendar year, each public body created under this subchapter shall make a written report to the governing bodies of the participating public agencies concerning its activities for the preceding calendar year.
(b) Each report shall set forth a complete operating and financial statement covering its operation during the year, including, without limitation, an audit of the public body's revenues and expenses performed by an independent certified public accountant.
Ark. Code Ann. § 25-20-322 Provisions supplemental and controlling.
This subchapter shall be deemed to provide an additional and alternative method for the doing of the things authorized hereby and shall be regarded as supplemental and additional to powers conferred by other laws.
Ark. Code Ann. § 25-20-323 Construction.
This subchapter shall be liberally construed to accomplish its intent and purposes and shall be the sole authority required for the accomplishment of its purposes, and to this end it shall not be necessary to comply with the provisions of other laws relating to the issuance and sale of the bonds authorized by this subchapter. This subchapter shall be construed as an additional and alternative method for the issuance and sale of bonds.
Ark. Code Ann. § 25-20-324 Interim financing.
(a) If the issuance of revenue bonds is authorized by resolution of the board of commissioners, any public body created under this subchapter is authorized to obtain interim financing pending the delivery of all or any part of the bonds from such sources and upon such terms as the board of commissioners of the public body shall determine.
(b)(1) As evidence of any indebtedness so incurred, the public body may execute and deliver its promissory note or notes and pledge to the payment thereof any revenues authorized by this subchapter to be pledged to revenue bonds and the proceeds of the revenue bonds when issued.
(2) The public body may secure the notes in the same manner as revenue bonds issued under this subchapter.
(c) The notes shall not in any event constitute an indebtedness of, nor pledge the faith and credit of, the State of Arkansas or the participating public agencies of the public body within the meaning of any constitutional or statutory limitation.
(d) The public body may use, as distinguished from pledge, any available revenues to pay or to apply to the payment of the principal of and interest on the notes and may use the proceeds of revenue bonds, either alone or with other available revenues, to pay the principal and interest on the notes.
(e) The notes may bear such date or dates, may mature at such time or times, not exceeding thirty-six (36) months from their respective dates, may bear interest at such rate or rates, may be in such form, may be executed in such manner, may be payable at such place or places, may contain such provisions for prepayment prior to maturity and may contain such other terms, covenants, and conditions as the resolution may provide, not inconsistent with the provisions of this subchapter pertaining to revenue bonds.
Ark. Code Ann. § 25-20-401 Title.
This subchapter shall be known and may be cited as the “Arkansas Municipal Electric Utility Interlocal Cooperation Act of 2003”.
Ark. Code Ann. § 25-20-402 Definitions.
As used in this subchapter:
(1) “Authority” means a municipal electric consolidated authority created pursuant to this subchapter;
(2) “Electric project” means any:
(A) Plant, works, system, or facilities and real and personal property of any nature associated therewith, together with all parts thereof and appurtenances thereto, that are used or useful in the generation, transmission, coordination, purchase, sale, exchange, or interchange of electric capacity and energy, and provision of ancillary services, including facilities and property for the acquisition, extraction, conversion, transportation, storage, reprocessing, or disposal of fuel and other materials of any kind for such purposes or that may be necessary or advisable for the proper and efficient operation of the authority's facilities;
(B) Interest in or right to the use, services, or electric capacity and energy of any such plant, works, system, or facilities;
(C) Study to determine the feasibility or costs of any of the foregoing, including, but not limited to, engineering, legal, financial, and other services necessary to determine the legality and financial and engineering feasibility of any electric project; and
(D) Contract or agreement associated with generation, transmission, coordination, purchase, sale, exchange, or interchange of electric capacity and energy or ancillary services;
(3) “Electric transmission system” and “electric transmission facility” mean electric utility properties and facilities necessary for transmitting electricity at sixty-nine kilovolts (69 kV) phase-to-phase or higher and not for service to a directly tapped, retail, end-use customer or customers;
(4) “Governing body of a municipal electric utility” means the city council, board of directors, improvement district commissioners, or other elected or appointed authority having the rate-making and debt-issuance authority for the municipal electric utility;
(5) “Municipality” means any city of the first class or city of the second class incorporated under the laws of the State of Arkansas or any commission or agency thereof, including any municipally owned or municipally controlled corporation, any improvement district, consolidated public or municipal utility system improvement district, or nonprofit corporation lessee of such an entity;
(6) “Municipal electric utility” means any electric generation, transmission, or distribution system owned or operated on July 16, 2003, by any city of the first class, city of the second class, or a town incorporated under the laws of the State of Arkansas or any commission, department, division, or agency thereof, including any municipally owned or municipally controlled corporation, improvement district, consolidated public or municipal utility system improvement district, or nonprofit corporation lessee of such an entity;
(7) “Person” means any natural person, firm, corporation, electric cooperative corporation, energy service provider, nonprofit corporation, association, or improvement district; and
(8) “Public utility” means any person or entity engaged in the generation or sale of electric power and energy that is subject to regulation by the Arkansas Public Service Commission.
Ark. Code Ann. § 25-20-403 Creation.
(a)(1) The governing bodies of any two (2) or more municipal electric utilities entering into an interlocal agreement under the Interlocal Cooperation Act, § 25-20-101 et seq., are authorized to create an authority as a separate legal entity for the purposes set forth in this subchapter.
(2) For the purposes of this section, a rural electric cooperative corporation that is not a member of a generation or transmission cooperative or a municipal electric utility system in another state may join in the formation of an authority.
(b) An authority created under this subchapter shall be referenced as an Arkansas Municipal Electric Utility Consolidated Authority # 1, #2, #3, and so forth as determined by the Secretary of State.
(c)(1) The governing body of a municipal electric utility wishing to create an authority under this subchapter shall approve by ordinance or resolution or otherwise pursuant to law an interlocal agreement specifying the matters set forth in § 25-20-104.
(2) An application shall be filed with the Secretary of State.
(3) Review by the Secretary of State as contemplated by this section shall be in addition to those filings required by §§ 25-20-104(f) and 25-20-105(a).
(d) An interlocal agreement shall:
(1) Specify any limitations on the exercise of the authority's powers, including such matters, if any, as to which the governing bodies of the municipal electric utilities reserve rights to approve, disapprove, or otherwise participate in any exercise of the authority's powers;
(2) Provide for reasonable payments in lieu of taxes or other payments by the authority to the participating governing bodies of the municipal electric utilities, as the governing bodies may deem appropriate;
(3) Specify the:
(A) Number of commissioners of the authority;
(B) Terms of office of the commissioners;
(C) Manner of appointing or electing the commissioners;
(D) Residency requirements applicable to commissioners; and
(E) Voting rights of each commissioner. The voting rights may vary by commissioner; and
(4) Set forth other matters not inconsistent with this subchapter with respect to the creation and operation of the authority as the governing bodies of the municipal electric utilities may deem necessary or appropriate.
(e)(1) An application to create an authority under this subchapter shall then be prepared, setting forth:
(A) A request that an authority be created under this subchapter;
(B) The proposed name for the authority;
(C) The names of the participating governing bodies of municipal electric utilities;
(D) The number of commissioners of the authority;
(E) The manner in which commissioners of the authority will be appointed or elected and the residency requirements applicable to commissioners;
(F) The voting rights of each commissioner;
(G) Special procedures for amending the certificate of incorporation, if any; and
(H) Other matters not inconsistent with this subchapter with respect to the creation and operation of the authority as the governing bodies of the municipal electric utilities may deem necessary or appropriate.
(2) The application shall be signed on behalf of each governing body of municipal electric utilities by an authorized official thereof.
(f)(1) In addition to the filing requirements contained in §§ 25-20-104(f) and 25-20-105(a), the Secretary of State shall examine the application and, if the Secretary of State finds that the name proposed for the authority is not identical with that of any other corporation, agency, or instrumentality of the State of Arkansas, so nearly similar as to lead to confusion and uncertainty, or otherwise deceptively misleading, the Secretary of State shall:
(A) Receive and file the application;
(B) Record the application in an appropriate book of record in his or her office;
(C) Make and issue a certificate of incorporation under the seal of the State of Arkansas setting forth the name of the authority and the names of the participating municipal electric utilities; and
(D) Record the certificate in an appropriate book of record in his or her office.
(2) A copy of the certificate of incorporation certified by the Secretary of State shall be admissible in evidence in any suit, action, or proceeding involving the validity or enforcement of or relating to any contract of the authority and shall be conclusive proof of the filing and contents of the certificate and the effective creation of the authority, absent fraud in the premises being established.
(g)(1) Any certificate of incorporation issued by the Secretary of State under this subchapter may be amended from time to time:
(A) In the manner provided in the certificate of incorporation then existing; or
(B) If the certificate of incorporation does not specify a procedure for its amendment, with the consent of a majority of the commissioners of the authority who are entitled to vote.
(2)(A) The amendment shall be signed by an officer or other authorized person of the authority who shall certify that the certificate of incorporation has been amended in accordance with the procedures of this subchapter and, as applicable, in the manner prescribed in the then-existing certificate of incorporation.
(B) Upon filing the amendment with the Secretary of State in the manner provided in this section, the Secretary of State shall make and issue an amendment to the certificate of incorporation.
Ark. Code Ann. § 25-20-404 Powers and duties of board of commissioners.
(a) All powers of an authority created under this subchapter shall be exercised by, or under the authority of, and the business and affairs of the authority managed under the direction of, its board of commissioners, subject to any limitation set forth in the authority's interlocal agreement.
(b) The duties of the board shall be stated in the interlocal agreement and may include, but shall not be limited to:
(1) Appointing a chief executive officer who shall not be a member of the board and setting compensation and other terms of employment for the chief executive officer;
(2) Approving all budgets of the authority;
(3) Adopting such rules and bylaws as the board may deem necessary and expedient for the proper ownership and operation of its electric projects. The rules and bylaws may be altered, changed, or amended at the board's discretion; and
(4) Performing other duties as set forth in the interlocal agreement.
Ark. Code Ann. § 25-20-405 Powers of authority.
Each authority created under this subchapter shall have the power to:
(1) Have perpetual succession as a body politic and corporate;
(2) Maintain offices as it may deem appropriate;
(3) Execute and perform contracts;
(4) Sue and be sued;
(5) Apply for and receive permits, licenses, certificates, and approvals as may be necessary and own and operate facilities in accordance with this subchapter and the interlocal agreement;
(6) Employ the services of all personnel necessary to its operations and, in connection therewith, adopt and implement such healthcare, disability, bonus, retirement, and other employee benefit plans as the board of commissioners shall deem appropriate;
(7) Employ the services of professionals;
(8) Purchase insurance, maintain reserves for self-insurance, and become self-insured for the payment of compensation under the Workers' Compensation Law, § 11-9-101 et seq., and in compliance with the requirements of § 11-9-404(a)(2), provided that deposit of an indemnity bond, letter of credit, or securities shall not be required;
(9) Plan, purchase, receive, own, hold, improve, use, repair, lease, sell, convey, exchange, transfer, assign, mortgage, pledge, and otherwise acquire, dispose of, and deal with real and personal property and any legal or equitable interest therein in its own name;
(10) Apply for, receive, and use loans, grants, taxes, donations, and contributions from any public agency or other lawful source, including any proceeds from the sale of bonds;
(11) Borrow money on a secured or unsecured basis, and in connection therewith, issue bonds, promissory notes, or other evidence of indebtedness and make and deliver indentures, mortgages, pledges, security agreements, financing statements, and other instruments encumbering assets of the authority;
(12) Make payments to the governing body of the municipal electric utilities in such amounts as may be required or permitted by the authority's interlocal agreement and to any political subdivision in which an electric project is situated in such amounts as may be agreed to by the authority and the political subdivision;
(13) Exercise other powers, privileges, and authorities as the participating municipal electric utilities shall have delegated to the authority by their interlocal agreement, subject to restrictions of applicable law;
(14) Plan, construct, own, manage, operate, repair, finance, improve, extend, acquire, reconstruct, equip, sell, lease, contract concerning, deal in, dispose of, and maintain electric projects, as specified in the interlocal agreement between the governing bodies of the municipal electric utilities forming an authority;
(15) Fix, charge, collect, and, from time to time, change the rates for electricity and other goods and services provided by the authority, as specified in the interlocal agreement between the governing bodies of the municipal electric utilities forming an authority; and
(16) To the extent not inconsistent with applicable law, have other and further powers relating to the ownership and operation of an electric project as are now by law given to the governing body of any municipal electric utility and do all other acts and things necessary, convenient, or desirable to carry out the purposes of, and to exercise the powers granted to, the authority by this subchapter.
Ark. Code Ann. § 25-20-406 Operation.
(a) It is the purpose of this subchapter to allow municipal electric utilities to utilize the provisions of the Interlocal Cooperative Act, § 25-20-101 et seq., for the purpose of planning, developing, and operating electric projects.
(b)(1) Participating municipal electric utilities are authorized to contribute to an authority such real and personal property as the governing body of the municipal electric utility deems necessary or appropriate to the ownership and operation of an electric project, or as otherwise allowed by law.
(2) However, any contributions of reserve funds held in trust under § 14-73-101 et seq. or any official action of the governing body of a municipal electric utility or other trust-related agreements shall be made on the condition that the funds may be used only for the purposes described in the applicable trust agreement and until so used shall remain in a trust fund complying with the requirements of § 14-73-101 et seq. or any applicable official action of the governing body of a municipal electric utility or any other trust-related agreements.
(c) Governing bodies of municipal electric utilities shall have the power to execute all contracts, leases, deeds, bills of sale, easements, assignments, and other instruments of conveyance as may be required or convenient to exercise the powers granted in this subchapter.
(d) No authority shall provide electric service at retail nor enter into contracts for the sale of energy or capacity to another party, other than the authority's participating municipal electric utilities, for a term of more than one (1) year, except in the event the Arkansas Public Service Commission authorizes a longer period pursuant to § 23-18-531[repealed].
Ark. Code Ann. § 25-20-407 Eminent domain.
(a)(1) Any authority may acquire any private property that it may deem necessary for its purposes by exercising the power of eminent domain in the manner prescribed in § 18-15-301 et seq.
(2) However, power of eminent domain shall not apply to any personal or real property that may be owned or leased by a public utility or any personal or real property used to generate electric energy or sell electric energy at wholesale that is owned or leased by an exempt wholesale generator, as defined in § 23-1-101.
(b)(1) An authority shall not be authorized to acquire through condemnation procedures any plant, property, facility, or business owned or operated by any public utility or pipeline company subject to the jurisdiction of the Arkansas Public Service Commission or any personal or real property used to generate electric energy or to sell at wholesale electric energy owned or leased by an exempt wholesale generator, as defined in § 23-1-101.
(2) Notwithstanding § 25-20-108 and subsection (a) of this section, an authority shall be authorized to enter into any contract, agreement, or undertaking to purchase or otherwise acquire and to jointly construct or operate the plant, property, or facility.
Ark. Code Ann. § 25-20-408 Financing.
(a)(1) An authority is authorized to use any available funds, revenues, and long-term or short-term debt to pay and provide for the costs and expenses of accomplishing the purposes authorized by this subchapter.
(2) For the purposes of paying the costs of any electric project or the portion thereof pertaining to its interest in the electric project, an authority may issue revenue bonds as provided in this subchapter.
(b)(1) Whenever any authority elects, consistent with this subchapter, to plan, purchase, construct, acquire, operate, or otherwise participate in an electric project or desires to construct improvements, betterments, repairs, and extensions thereto, it may issue revenue bonds under the provisions of this section to pay the costs thereof.
(2) The procedure for issuance of bonds shall be as provided in this section.
(c)(1) Bonds issued in accordance with this section shall be authorized by resolution of the board of commissioners.
(2) The bonds may be issued as registered bonds and may be exchangeable for bonds of another denomination or in another form.
(3) The bonds may:
(A) Be in such form and denominations as the board determines;
(B) Have such date or dates as the board determines;
(C) Be stated to mature at such time or times as the board determines;
(D) Bear interest payable at such times and at such rate or rates as the board determines;
(E) Be payable at such places within or without the State of Arkansas as the board determines;
(F) Be subject to such terms of redemption in advance of maturity at such prices as the board determines; and
(G) Contain such terms and conditions as the board determines.
(4) The bonds shall have all the qualities of and shall be deemed to be negotiable instruments under the laws of the State of Arkansas, subject to provisions of registration set forth in this subsection.
(5) The authorizing resolution may contain any other terms, covenants, and conditions that the board deems reasonable and desirable, including, without limitation, those pertaining to the:
(A) Maintenance of various funds and reserves;
(B) Nature and extent of any security for payment of the bonds;
(C) Priority among successive issues of bonds;
(D) Custody and application of the proceeds of the bonds;
(E) Collection and disposition of revenues;
(F) Investing and reinvesting of any moneys during periods not needed for authorized purposes; and
(G) Rights, duties, and obligations of the authority and the holders and registered owners of the bonds.
(d)(1) The authorizing resolution may provide for the execution of a trust indenture between the authority and any financial institution or trust company within or without the State of Arkansas.
(2) The trust indenture may contain any terms, covenants, and conditions that are deemed desirable by the board, including, without limitation, those pertaining to the:
(A) Maintenance of various funds and reserves;
(B) Nature and extent of any security for the payment of the bonds;
(C) Priority among successive issues of bonds;
(D) Custody and application of the proceeds of the bonds;
(E) Collection and disposition of revenues;
(F) Investing and reinvesting of any moneys during periods not needed for authorized purposes; and
(G) Rights, duties, and obligations of the authority and the holders and registered owners of the bonds.
(e)(1) Any authorizing resolution and any trust indenture relating to the issuance and security of the bonds shall constitute a contract between the authority and holders and registered owners of the bonds.
(2) The contract and all covenants, agreements, and obligations therein shall be promptly performed in strict compliance with the terms and provisions of the contract, and the covenants, agreements, and obligations of the authority may be enforced by mandamus or other appropriate proceeding at law or in equity.
(f) The rates, rents, fees, and other charges to be charged for the services of the electric project or the specified portion of the electric project with revenues pledged to the payment of the bonds shall be sufficient to provide for:
(1) The payment of all principal of and interest on all bonds as and when due; and
(2) Renewals and replacements and other appropriate costs for the electric project or the specified portion of the electric project with revenues pledged to the payment of the bonds.
(g)(1) The proceeds derived from the sale of the bonds shall be used solely for the purpose of:
(A) Planning, purchasing, constructing, acquiring, or participating in an electric project and making betterments, improvements, repairs, and extensions to an electric project;
(B) Paying interest on the bonds during or after the period of acquisition and construction or establishment of an electric project or betterments, improvements, and extensions thereto;
(C) Establishing any necessary reserves for the bonds;
(D) Paying the costs of issuing or refunding bonds; and
(E) Paying any other costs and expenditures of whatever nature incidental to the planning, construction, acquisition, establishment, or operation of an electric project or improvements, repairs, and betterments thereto.
(2) The terms “betterments”, “improvements”, and “extensions” include land that may be necessary or advisable for the proper and efficient operation of the authority's electric project.
(h)(1) Bonds issued under the provisions of this subchapter shall be payable solely from revenues derived from the electric project or any specified portion of the electric project.
(2) The bonds shall not in any event constitute an indebtedness of, nor pledge of the faith and credit of, the State of Arkansas or the participating municipal electric utilities or governing bodies of municipal electric utilities within the meaning of any constitutional provisions or limitations.
(3) It shall be plainly stated on the face of each bond that it:
(A) Is issued under the provisions of this subchapter;
(B) Does not constitute an indebtedness of the State of Arkansas or the participating municipal electric utilities or governing bodies of municipal electric utilities within the meaning of any constitutional provisions or limitations; and
(C) Is not backed by the full faith and credit of the State of Arkansas or the participating municipal electric utilities or governing bodies of municipal electric utilities.
(4) Bonds issued under the provisions of this subchapter and the income from the bonds shall be exempt from all state, county, and municipal taxes, including, without limitation, all income, property, and inheritance taxes.
(i)(1) The bonds may be sold in the manner, either at public or private sale, and upon such terms as the board determines to be reasonable and expedient for effectuating the purposes of the authority.
(2) The bonds may be sold at any price the board may accept, including sale at discount.
(j) The bonds shall be executed in the manner provided for by the Registered Public Obligations Act of Arkansas, § 19-6-401 et seq.
Ark. Code Ann. § 25-20-409 Lien in favor of bond holders.
(a) The payment of the principal of bonds issued under this subchapter and the interest on the bonds may be secured by a lien on and security interest in an electric project or any specified portion of an electric project.
(b) It shall not be necessary to the perfection of the lien and pledge for such purposes that the trustee in connection with the bond issue or the holders of the bonds take possession of the collateral security.
(c) Subject to whatever restrictions may be contained in the resolution or indenture governing the bonds, any holder of bonds issued under the provisions of this subchapter may enforce either at law or in equity the mortgage lien and may compel by proper suit the performance of the duties of the officers of the issuing authority set forth in this subchapter.
(d) If default occurs in the payment of the principal of or interest on any of the bonds, any court having jurisdiction in any proper action may appoint a receiver to administer the electric project or the specified portion of the electric project pledged to the payment of the bonds on behalf of the authority, with the power to:
(1) Charge and collect rates sufficient to provide for the payment of the:
(A) Bonds and the interest on the bonds; and
(B) Operating expenses of the electric project; and
(2) Apply the income and revenues in conformity with this subchapter and the resolution or indenture providing for the issuance of the bonds.
Ark. Code Ann. § 25-20-410 Refunding bonds.
(a)(1) Bonds may be issued for the purpose of refunding any obligations issued under this subchapter.
(2) The refunding bonds may be combined with bonds issued under § 25-20-408 into a single issue.
(b)(1) When bonds are issued under this section for refunding purposes, the bonds may be either sold or delivered in exchange for the outstanding obligations.
(2) If sold, the proceeds may be either:
(A) Applied to the payment of the obligations refunded; or
(B) Deposited in escrow for the retirement thereof either at maturity or upon any authorized redemption date.
(c)(1) All bonds issued under this section in all respects shall be authorized, issued, and secured in the manner provided for other bonds issued under this subchapter and shall have all the attributes of those bonds.
(2) The resolution or indenture under which the refunding bonds are issued may provide that any of the refunding bonds shall have the same priority of lien on the revenues pledged for their payment as was enjoyed by the obligations refunded thereby.
Ark. Code Ann. § 25-20-411 Security deposit of public funds.
Bonds issued under this subchapter shall be eligible to secure the deposit of public funds.
Ark. Code Ann. § 25-20-412 No personal liability.
No commissioner or officer of the authority shall be liable personally for any reason arising from the issuance of bonds under this subchapter, unless he or she has acted with a willful and wanton intent.
Ark. Code Ann. § 25-20-413 Zoning exemption.
Any authority maintaining facilities in an area zoned subsequent to the construction of the facilities may add to, alter, expand, or change the facilities upon that land or upon lands immediately adjacent thereto without regard to the zoning regulation for the area, if the board of commissioners deems the action necessary for the proper operation of an electric project.
Ark. Code Ann. § 25-20-414 Tax-exempt status of property owners and income.
(a) Each authority created under this subchapter will be performing public functions and will be a public instrumentality of the participating municipal electric utilities.
(b) Accordingly, all properties at any time owned by the authority and the income from the properties, shall be exempt from all taxation in the State of Arkansas.
Ark. Code Ann. § 25-20-415 Immunity.
(a) This subchapter does not abrogate or in any other manner affect the immunity under existing law of the participating municipal electric utilities.
(b) The immunity shall extend also to any authority created under this subchapter and to each commissioner, officer, and employee thereof.
Ark. Code Ann. § 25-20-416 No public utility status.
No authority created under this subchapter shall be a:
(1) “Public utility” within the meaning of either §§ 14-200-101 — 14-200-105 or §§ 23-1-101 — 23-4-509; or
(2) “Person, company, or corporation that has secured a franchise from any municipality” within the meaning of § 14-200-102.
Ark. Code Ann. § 25-20-417 Annual report and audit.
(a) During each calendar year, each authority shall make a public, written report to the governing bodies of the municipal electric utilities concerning its activities for the preceding calendar year.
(b) Each report shall set forth a complete operating and financial statement covering its operation during the year, including, without limitation, an audit of the authority's revenues and expenses performed by an independent certified public accountant.
Ark. Code Ann. § 25-20-418 Provisions supplemental and controlling.
This subchapter shall be deemed to provide an additional and alternative method for the doing of the things authorized in this subchapter and shall be regarded as supplemental and additional to powers conferred by other laws.
Ark. Code Ann. § 25-20-419 Construction.
(a)(1) This subchapter shall be liberally construed to accomplish its intent and purposes and shall be the sole authority required for the accomplishment of its purposes, and to this end it shall not be necessary to comply with the provisions of other laws relating to the issuance and sale of the bonds authorized by this subchapter.
(2) This subchapter shall be construed as an additional and alternative method for the issuance and sale of bonds.
(b) An authority shall not be subject to Arkansas Public Service Commission regulatory authority.
Ark. Code Ann. § 25-20-420 Use of revenue.
This subchapter does not modify the existing right of a governing body of a municipal electric utility to use available funds generated by its electric utility operations for other municipal purposes.
Ark. Code Ann. § 25-20-421 Effect of other laws.
The provisions of any other law, except as expressly provided in this subchapter or in the other law by way of express reference to this subchapter, shall not limit or restrict the operation of this subchapter in any manner.
Ark. Code Ann. § 25-20-423 Termination or dissolution.
The governing bodies of the municipal electric utility forming an authority shall include in their interlocal agreement a provision allowing for:
(1) The termination or dissolution of the authority;
(2) The winding up of the authority's affairs; and
(3) Appropriate disposal or distribution of the authority's property.
Ark. Code Ann. § 25-20-424 Control of electric transmission facilities.
(a) An authority created pursuant to this subchapter shall be authorized to and shall join or contract for the control of its electric transmission facilities with an independent transmission system operator, independent transmission company, regional transmission organization, or other independent transmission entity approved by the Federal Energy Regulatory Commission for this state or a larger region of which this state is a part as, if, and when other similarly situated electric transmission systems are so required to join or contract.
(b) However, any authority established under this subchapter shall be authorized to and shall join the appropriate reliability council responsible for operations in its geographic area as appropriate.
Ark. Code Ann. § 25-20-425 Sham transactions prohibited.
(a) An authority created pursuant to this subchapter shall be prohibited from engaging in any sham transaction.
(b) For the purposes of this section, a “sham transaction” means the acquisition or construction of an electric project authorized by this subchapter for the purpose of:
(1) A subsequent sale or transfer of the electric project to any municipal electric utility, public utility, or other person engaged in the selling or distributing of electricity to consumers other than a municipal electric utility, public utility, or other person engaged in selling or distributing electricity to consumers that was selling or distributing electricity to consumers on July 16, 2003; or
(2) Providing electric service directly to an end user.
Ark. Code Ann. § 25-20-501 Title.
This subchapter may be referred to and cited as the “Consolidated Wastewater Systems Act”.
Ark. Code Ann. § 25-20-502 Creation.
(a) Any two (2) or more public agencies entering into an interlocal agreement under the Interlocal Cooperation Act, § 25-20-101 et seq., for the purpose of consolidating wastewater systems may create a public body corporate and politic as a separate legal entity for the purpose of constructing, owning, managing, operating, financing, mortgaging, granting security interests in, improving, extending, acquiring, reconstructing, equipping, selling, leasing, contracting concerning, dealing in, disposing of, and maintaining a consolidated wastewater system.
(b) The governing body of each public agency wishing to create a public body under this subchapter shall approve by ordinance or resolution or otherwise the filing of an application with the Secretary of State to create a public body under this subchapter and approve an interlocal agreement specifying the matters set forth in § 25-20-104. The interlocal agreement shall:
(1) Specify limitations on the exercise of the public body's powers, including without limitation matters in which the participating public agencies reserve rights to approve, disapprove, or otherwise participate in any exercise of the public body's powers;
(2) Provide for reasonable franchise fees, payments in lieu of taxes, or other payments by the public body to the participating public agencies as the public agencies find appropriate;
(3) Specify the number of commissioners of the public body, the terms of office of the commissioners, the manner of appointing or electing the commissioners, the residency requirements, if any, applicable to commissioners in addition to those set forth in this subchapter, and the voting rights of each commissioner, which voting rights may vary by commissioner; and
(4) Set forth other matters consistent with this subchapter concerning the creation and operation of the public body as the participating public agencies find necessary or appropriate.
(c)(1) An application to create a public body under this subchapter shall set forth:
(A) A request that a public body corporate and politic be created under this subchapter;
(B) The proposed name for the public body;
(C) The names of the participating public agencies;
(D) The number of commissioners of the public body;
(E) The manner in which commissioners of the public body will be appointed or elected and the residency requirements, if any, applicable to commissioners in addition to those set forth in this subchapter;
(F) The voting rights of each commissioner;
(G) Special procedures for amending the certificate of incorporation, if any; and
(H) Other matters consistent with this subchapter concerning the creation and operation of the public body as the participating public agencies find necessary or appropriate.
(2) The application shall be signed on behalf of each participating public agency by an authorized official of the public agency.
(d)(1) The Secretary of State shall examine the application, and if the Secretary of State finds that the name proposed for the public body is not identical with that of any other corporation, agency, or instrumentality of this state, so nearly similar as to lead to confusion and uncertainty, or otherwise deceptively misleading, the Secretary of State shall:
(A) Receive and file the application;
(B) Record the application in an appropriate book of record in his or her office;
(C) Make and issue a certificate of incorporation under the seal of the state setting forth the name of the public body and the names of the participating public agencies; and
(D) Record the certificate in an appropriate book of record in his or her office.
(2) A copy of the certificate of incorporation certified by the Secretary of State shall be admissible in evidence in any suit, action, or proceeding involving the validity or enforcement of or relating to any contract of the public body and shall be conclusive proof of the filing and contents of the certificate and the effective creation of the public body under this subchapter, absent fraud in the premises being established.
(e)(1) Any certificate of incorporation issued by the Secretary of State under this subchapter may be amended from time to time in the manner provided in the certificate of incorporation then existing or, if the certificate of incorporation does not specify a procedure for its amendment, with the consent of a majority of the commissioners of the public body who are entitled to vote.
(2)(A) The amendment shall be signed by an officer or other authorized person of the public body, who shall certify that the certificate of incorporation has been amended in accordance with this subchapter and, as applicable, in the manner prescribed in the then-existing certificate of incorporation.
(B) On the filing of the amendment with the Secretary of State under this section, the Secretary of State shall make and issue an amendment to the certificate of incorporation.
Ark. Code Ann. § 25-20-503 Contributions of public agency properties.
(a) Participating public agencies are authorized to contribute to a public body created under this subchapter such real and personal property of the participating public agencies as the participating public agencies find necessary or appropriate to the ownership and operation of a consolidated wastewater system by the public body, provided that:
(1) Any contributions of reserve funds held in trust under § 14-73-101 et seq. shall be made on the condition that the funds may be used only for the purposes described in the trust agreement and until so used shall remain in a trust fund that complies with the requirements of § 14-73-101 et seq.; and
(2) Any contribution of sales or use tax proceeds held or to be collected by participating public agencies for wastewater uses shall be used only for the uses designated in the ordinance providing for the approval of those funds.
(b) Contributions of properties under this section shall be on the terms and conditions and for consideration as the participating public agencies find just and proper, it being within the participating public agencies' discretion to contribute property with or without monetary consideration.
(c) Participating public agencies may execute contracts, leases, deeds, bills of sale, easements, assignments, and other instruments of conveyance as may be required or convenient to exercise the powers granted in this section.
Ark. Code Ann. § 25-20-504 Board of commissioners.
(a)(1) Each public body created under this subchapter shall have a board of commissioners consisting of at least three (3) commissioners, with each commissioner residing within the jurisdiction of one (1) of the participating public agencies and otherwise meeting any residency requirements under the public body's certificate of incorporation.
(2) Each commissioner shall be appointed or elected in the manner set forth in the public body's certificate of incorporation and shall serve a term of office as specified in the interlocal agreement.
(b) The commissioners shall not receive compensation for their services but shall be entitled to reimbursement of expenses incurred in the performance of their duties.
(c) Before entering upon their duties, the commissioners shall take and file with the Secretary of State an oath of office swearing to discharge faithfully their duties in the manner provided by law.
(d)(1)(A) The board of commissioners shall meet and organize by electing one (1) of their number as chair, one (1) as vice chair, one (1) as secretary, and one (1) as treasurer.
(B) Officers shall be elected annually thereafter in like manner.
(2) The duties of secretary and treasurer may be performed by the same commissioner.
(3)(A) The secretary may cause copies to be made of all minutes and other records and documents of the public body.
(B) The secretary may certify under the official seal of the public body that the copies are true copies, and persons dealing with the public body may rely upon the certification.
Ark. Code Ann. § 25-20-505 Powers and duties of board of commissioners.
(a) All powers, business, and affairs of any public body under this subchapter shall be exercised and managed under the direction of its board of commissioners, subject to any limitation under the public body's certificate of incorporation or interlocal agreement.
(b) The duties of the board of commissioners include without limitation:
(1) Appointing a chief executive officer, who shall not be a member of the board of commissioners, and setting compensation and other terms of employment for such officer;
(2) Approving all budgets of the public entity;
(3) Adopting rules and by-laws that the board of commissioners find necessary and expedient for the proper ownership and operation of the consolidated wastewater system, including adopting such rules and by-laws as the commissioners find necessary and expedient regarding the discharge by any person or entity of any wastewater into the consolidated wastewater system, and altering, changing, or amending the rules and by-laws at its discretion; and
(4) Performing other duties under the interlocal agreement.
Ark. Code Ann. § 25-20-506 General powers of public body.
(a) In addition to other powers under this subchapter and unless the certificate of incorporation or interlocal agreement provides otherwise, each public body under this subchapter shall have the power to:
(1) Have perpetual succession as a body politic and corporate;
(2) Maintain offices it finds appropriate;
(3) Execute and perform contracts;
(4) Sue and be sued;
(5) Apply for and receive permits, licenses, certificates, and approvals as may be necessary and own and operate facilities in accordance therewith;
(6) Employ the services of all personnel necessary to its operations and, in connection therewith, adopt and implement such healthcare, disability, bonus, retirement, and other employee benefit plans as the board of commissioners find appropriate;
(7) Employ the services of professionals;
(8) Purchase insurance, maintain reserves for self-insurance, and become self-insured for the payment of workers' compensation under § 11-9-404(a)(2), provided that the deposit of an indemnity bond, letter of credit, or securities shall not be required;
(9) Purchase, receive, own, hold, improve, use, lease, sell, convey, exchange, transfer, assign, mortgage, pledge, and otherwise acquire, dispose of, and deal with real and personal property and any legal or equitable interest therein in its own name;
(10) Apply for, receive, and use loans, grants, taxes, donations, and contributions from any public agency or other lawful source, including any proceeds from the sale of bonds;
(11) Borrow money on a secured or unsecured basis, and in connection therewith issue bonds, promissory notes, or other evidence of indebtedness, and make and deliver indentures, mortgages, pledges, security agreements, financing statements, and other instruments encumbering assets of the public body;
(12) Pay reasonable franchise fees, make payments in lieu of taxes, or otherwise make payments to the participating public agencies in such amounts as may be required or permitted by the participating public agencies;
(13) Exercise such other powers, privileges, and authorities as the participating public agencies have delegated to the public body by the public agency interlocal agreement, subject to any restrictions imposed thereon by the interlocal agreement or applicable law; and
(14) Have such other and further powers relating to the ownership and operation of wastewater systems as are now by law given to the governing body of any participating public agency and do all other acts and things necessary, convenient, or desirable to carry out the purposes of and to exercise the powers granted to the public body by this subchapter.
(b) A public body created under this subchapter shall constitute a separate legal entity, but to the extent provided by state law or set forth in the certificate of incorporation of the public body or the interlocal agreement of the participating public agencies, shall be subject to the further supervision or regulation or require the further approval or consent of any participating public agency.
Ark. Code Ann. § 25-20-507 Operation of consolidated wastewater system.
(a) “Consolidated wastewater system” means and includes a wastewater and collection system in its entirety, or any integral part thereof, including land, mains, interceptors, collector lines, manholes, force mains, valves, pumping stations, pumps, treatment and pretreatment plants and units thereof, as well as all other real and personal property, buildings, structures, or other improvements or facilities as may be necessary or advisable for the proper and efficient operation of the public body's facilities.
(b) Unless the interlocal agreement provides otherwise, a public body under this subchapter shall have full authority to construct, own, manage, operate, finance, improve, extend, acquire, reconstruct, equip, sell, lease, contract concerning, deal in, dispose of, and maintain a consolidated wastewater system. The assets of the public body may be located inside and outside the jurisdictions of the public body's participating public agencies.
(c)(1) Unless the interlocal agreement provides otherwise, a public body under this subchapter shall have full authority to fix, charge, and collect and from time to time change the rates or charges for the use of and the service rendered by the consolidated wastewater system and other goods and services provided by the public body.
(2) A public body shall have a reasonable time after its creation or after its expansion by the addition of a new participating public agency to equalize any differentials in sewer rates or charges among similarly situated classes of customers.
(3) It shall be a complete defense to any suit or claim based on the charging of differential rates or charges for similarly situated classes of customers that:
(A) Within one (1) year of the creation or expansion of the public body, an independent expert completes a study of rates or charges charged to customers that shows a differential in rates or charges among similarly situated classes of customers located within the jurisdictions of the participating public agencies, and the public body equalizes rates or charges among similarly situated classes of customers within ten (10) years of the date of the rate study; or
(B)(i) Within one (1) year of the creation or expansion of the public body, an independent expert completes an engineering study of the consolidated wastewater system infrastructure located within the jurisdiction or jurisdictions of the participating public agencies that identifies improvements needed to create a uniform infrastructure quality throughout the jurisdictions, rate differentials among otherwise similarly situated classes of customers are reasonably calculated to recover from customers located in the jurisdictions in which the improvements are made the costs incurred in making the improvements, and the public body equalizes rates or charges among similarly situated classes of customers within ten (10) years of the date of the engineering study.
(ii) The inability of a public body to rely upon either safe harbor defense under subdivisions (c)(3)(A) and (c)(3)(B)(i) of this section shall not create any implication that the public body has failed to equalize any differentials in wastewater rates or charges among similarly situated classes of customers within a reasonable period of time after its creation or expansion.
(d) If any rate or charge established is not paid within thirty (30) days after it is due, the amount of the rate or charge together with a penalty of ten percent (10%) and a reasonable attorney's fee may be:
(1) Charged by the public body; and
(2) Recovered by the public body in a suit filed in the circuit court where any part of the consolidated wastewater system is located.
Ark. Code Ann. § 25-20-508 Out-of-area sales and services.
(a) A public body under this subchapter may extend its collection system and provide wastewater services to any customer located outside the jurisdictions of the public body's participating public agencies.
(b) Use of the consolidated wastewater system and extensions of services under this section may be made at such rates and charges and on such other terms as the board of commissioners finds just and reasonable, and the rates and charges need not be the same as the rates and charges charged customers within the jurisdictions of the public body's participating public agencies.
Ark. Code Ann. § 25-20-509 Eminent domain.
(a) A public body under this subchapter may acquire by the exercise of the power of eminent domain any real property, rights, easements, franchises, and other property that it finds necessary for its purposes under § 18-15-301 et seq. or § 18-15-401 et seq. or in the manner provided by law under which one (1) of the public body's participating public agencies may exercise a power of eminent domain.
(b) In exercising the power of eminent domain, a public body shall have the right by its agents or employees to peacefully enter upon any lands, structures, or rights-of-way to make surveys, tests, and measurements thereon but is liable for any damage that may result by reason of its actions.
Ark. Code Ann. § 25-20-510 Improvements — Financing with bonds.
(a) If a public body under this subchapter owns or operates a consolidated wastewater system and desires to construct improvements, betterments, and extensions thereto, it may issue revenue bonds under this section for the payment thereof.
(b) The issuance of bonds shall be authorized by resolution of the board of commissioners.
(c) The bonds may be issued as registered bonds and may be exchangeable for bonds of another denomination or in another form.
(d) The bonds may be in such form and denominations, may have such date or dates, may be stated to mature at such time or times, may bear interest payable at such times and at such rate or rates, may be payable at such places within or without the state, may be subject to such terms of redemption in advance of maturity at such prices, and may contain such terms and conditions as the board of commissioners determines.
(e) The bonds shall have all the qualities of and shall be negotiable instruments under the laws of the State of Arkansas, subject to provisions as to registration under this section.
(f) The authorizing resolution may contain other terms, covenants, and conditions that the board of commissioners finds reasonable and desirable, including without limitation conditions concerning the maintenance of various funds and reserves, the nature and extent of any security for payment of the bonds, the custody and application of the proceeds of the bonds, the collection and disposition of revenues, the investing for authorized purposes, and the rights, duties, and obligations of the public body and the holders and registered owners of the bonds.
(g)(1) The authorizing resolution may provide for the execution of a trust indenture between the public body and any financial institution within or without the State of Arkansas.
(2) The trust indenture may contain any terms, covenants, and conditions found desirable by the board of commissioners, including without limitation conditions concerning the maintenance of various funds and reserves, the nature and extent of any security for the payment of the bonds, the custody and application of the proceeds of the bonds, the collection and disposition of revenues, the investing and reinvesting of any moneys during periods not needed for authorized purposes, and the rights, duties, and obligations of the public body and the holders and registered owners of the bonds.
(h) An authorizing resolution and trust indenture relating to the issuance and security of the bonds shall constitute a contract between the public body and holders and registered owners of the bonds, which contract and all covenants, agreements, and obligations therein shall be promptly performed in strict compliance with the terms and provisions of the contract, and the covenants, agreements, and obligations of the public body may be enforced by mandamus or other appropriate proceeding in a court of proper jurisdiction.
(i)(1) The resolution shall fix the minimum rate or rates for the use of and the service rendered by the consolidated wastewater system to be collected prior to the payment of all of the bonds, with exceptions as may be provided in the resolution, and shall pledge the revenues derived from the consolidated wastewater system or any specified portion of the consolidated wastewater system for the purpose of paying the bonds and interest thereon.
(2) The rates to be charged for the services of the consolidated wastewater system or the specified portion of the consolidated wastewater system with revenues pledged to the payment of the bonds shall be sufficient to provide for the payment of all principal of and interest on all bonds when due, to provide for the operation and maintenance of the consolidated wastewater system or the specified portion of the consolidated wastewater system with revenues pledged to the payment of the bonds, and to provide an adequate depreciation account for the consolidated wastewater system or the specified portion of the consolidated wastewater system with revenues pledged to the payment of the bonds.
(j)(1) The proceeds derived from the sale of the bonds shall be used solely for the purpose of making betterments, improvements, and extensions to the consolidated wastewater system owned and operated by the public body, paying interest on the bonds during the period of construction of the betterments, improvements, and extensions, establishing any necessary reserves for the bonds, paying the costs of issuing the bonds, and paying any other costs and expenditures of whatever nature incidental to the accomplishment of the betterments, improvements, and extensions.
(2) The terms “betterments”, “improvements”, and “extensions” include a wastewater and collection system, including land, mains, interceptors, collector lines, manholes, force mains, valves, pumping stations, pumps, treatment and pretreatment plants and units thereof, as well as all other real and personal property, buildings, structures, or other improvements or facilities that may be necessary or advisable for the proper and efficient operation of the public body's consolidated wastewater system.
(k)(1) Bonds issued under this section shall be payable solely from revenues derived from the consolidated wastewater system or any specified portion of the consolidated wastewater system.
(2) The bonds shall not constitute in any event an indebtedness of nor pledge the faith and credit of the State of Arkansas or the participating public agencies within the meaning of any constitutional provisions or limitations.
(3) It shall be stated plainly on the face of each bond that:
(A) It is issued under this subchapter;
(B) It does not constitute an indebtedness of the State of Arkansas or the participating public agencies within any constitutional provisions or limitations; and
(C) It is not backed by the full faith and credit of the State of Arkansas or the participating public agencies.
(4) The bonds and the interest thereon shall be exempt from all state, county, and municipal taxation, including income taxation and inheritance taxation.
(l)(1) The bonds may be sold in such manner, either at public or private sale, and upon such terms as the board of commissioners finds reasonable and expedient for effectuating the purposes of the public body.
(2) The bonds shall be sold at a price the board of commissioners accepts, including sale at discount.
(m)(1) The bonds shall be executed by manual or facsimile signature of the chair of the board of commissioners and the manual or facsimile signature of the secretary of the board of commissioners or any other officer of the public body authorized to do so by resolution of the board of commissioners.
(2) In case any of the officers whose signatures appear on the bonds cease to be such officers before delivery of the bonds, their signatures shall be valid and sufficient for all purposes.
(3) Each bond shall be impressed or imprinted with the seal of the public body.
Ark. Code Ann. § 25-20-511 Lien in favor of bondholders.
(a) The payment of the principal of bonds issued under this subchapter and the interest thereon may be secured by a lien on and security interest in the consolidated wastewater system or any specified portion of the consolidated wastewater system.
(b) It shall not be necessary to the perfection of the lien and pledge for such purposes that the trustee in connection with such bond issue or the holders of the bonds take possession of the collateral security.
(c) Subject to whatever restrictions may be contained in the resolution or indenture governing the bonds, any holder of bonds issued under this subchapter may enforce in a court of proper jurisdiction the mortgage lien and may compel the performance of the duties of the officers of the issuing public body under this subchapter.
(d) If there is default in the payment of the principal of or interest on any of the bonds, a court of proper jurisdiction may appoint a receiver to administer the consolidated wastewater system or the specified portion of the consolidated wastewater system pledged to the payment of the bonds on behalf of the public body with power to charge and collect rates sufficient to provide for the payment of the bonds and interest thereon and for the payment of the operating expenses, and to apply the income and revenues under this subchapter and the resolution or indenture providing for the issuance of the bonds.
Ark. Code Ann. § 25-20-512 Refunding bonds.
(a) Bonds may be issued for the purpose of refunding any obligations issued under this subchapter or otherwise. Such refunding bonds may be combined with bonds issued under § 25-20-510 into a single issue.
(b) When bonds are issued under this section for refunding purposes, the bonds may either be sold or delivered in exchange for the outstanding obligations. If sold, the proceeds may be applied to the payment of the obligations refunded or deposited into escrow for the retirement thereof either at maturity or upon any authorized redemption date.
(c)(1) All bonds issued under this section shall be authorized, issued, and secured in the manner provided for other bonds issued under this subchapter and shall have all the attributes of such bonds.
(2) The resolution or indenture under which the refunding bonds are issued may provide that any of the refunding bonds shall have the same priority of lien on the revenues pledged for their payment as was enjoyed by the obligations refunded thereby.
Ark. Code Ann. § 25-20-513 Securing deposit of public funds.
Bonds issued under this subchapter shall be eligible to secure the deposit of public funds.
Ark. Code Ann. § 25-20-514 No personal liability.
A commissioner or officer of the public body shall not be liable personally for any reason arising from the issuance of bonds under this subchapter unless he or she acted with a corrupt intent.
Ark. Code Ann. § 25-20-515 Sewer payments by public agencies.
The public agencies shall be subject to the same rates and charges established by the public body for services rendered to the public agencies and shall pay the rates and charges when due.
Ark. Code Ann. § 25-20-516 Zoning exemption.
A public body maintaining facilities in an area zoned after the construction of the facilities may add to, alter, expand, or change the facilities upon that land or upon lands immediately adjacent thereto without regard to the zoning regulation for the area if the board of commissioners finds the action necessary for the proper operation of its consolidated wastewater system.
Ark. Code Ann. § 25-20-517 Tax-exempt status of property owned and income.
Each public body under this subchapter is performing functions as and is a public instrumentality of the participating public agencies, and all properties at any time owned by the public body and the income therefrom shall be exempt from all taxation in the state.
Ark. Code Ann. § 25-20-518 Immunity.
(a) This subchapter does not affect the immunity of the participating public agencies.
(b) Immunity extends to any public body created under this subchapter and to each commissioner, officer, and employee thereof.
Ark. Code Ann. § 25-20-519 Franchise fees.
(a) A participating public agency that is an Arkansas municipality or county, acting by ordinance or resolution of its governing body, may require a public body under this subchapter to pay a reasonable franchise fee by which the public body may be permitted to occupy the streets, highways, or other public places within the jurisdiction of such public agency, and the ordinance or resolution is prima facie reasonable, provided that a franchise fee shall not exceed ten percent (10%) of the public body's operating revenues that are attributable to gross income from wastewater services within the public agency's jurisdiction unless agreed to by the public body or approved by the voters of the public agency.
(b) A public body created under this subchapter is not a public utility under § 14-200-101 et seq. or a person, company, or corporation that has secured a franchise from any municipality under § 14-200-102.
(c) Any franchise fees charged under this section shall be in addition to payments in lieu of taxes permitted under this subchapter.
Ark. Code Ann. § 25-20-520 Payments in lieu of taxes.
(a) A public body under this subchapter shall make annual payments to the general fund of each participating public agency that is an Arkansas municipality or county in lieu of taxes in return for police, fire, and health protection and in return for administrative and other services furnished by the public agency.
(b) The payments shall be an operation and maintenance expense of the public body.
(c)(1) In each calendar year, the payments shall equal the amount the public agency would have received from the public body as real property taxes for the preceding calendar year if the public body's real property located in the public agency's jurisdiction, whether owned or leased by the public body, had been privately owned and subject to tax by the public agency.
(2) For purposes of this computation, the public body's real property shall be deemed to have an assessed value equal to twenty percent (20%) of book value as reflected by the public body's usual accounting procedures.
(d) Payments in lieu of taxes under this section shall be in addition to any franchise fees permitted under this subchapter.
Ark. Code Ann. § 25-20-521 Annual report and audit.
(a) Within the first ninety (90) days of each calendar year, each public body under this subchapter shall make a written report to the governing bodies of the participating public agencies concerning its activities for the preceding calendar year.
(b) Each report shall set forth a complete operating and financial statement covering its operation during the year, including without limitation an audit of the public body's revenues and expenses performed by an independent certified public accountant.
Ark. Code Ann. § 25-20-522 Provisions supplemental and controlling.
This subchapter provides an additional and alternative method for the doing of the things authorized hereby and is supplemental and additional to powers conferred by other laws.
Ark. Code Ann. § 25-20-523 Construction.
This subchapter shall be liberally construed to accomplish its intent and purposes and shall be the sole authority required for the accomplishment of its purposes, and to this end it shall not be necessary to comply with the provisions of other laws relating to the issuance and sale of the bonds authorized by this subchapter, and this subchapter shall be construed as an additional and alternative method for the issuance and sale of bonds.
Ark. Code Ann. § 25-20-524 Property of public body.
(a) Regardless of the beginning date thereof, adverse possession or adverse use of lands or easements owned by a public body created hereunder shall not ripen into title or permanent right.
(b) This section shall have no application to any possession or use which ripened into title or permanent right before the enactment of this section.
Source: Public.Resource.Org / UniCourt, Official Code of Arkansas Annotated, Release 78 (2020) (unicourt.github.io/cic-code-ar)URL: https://unicourt.github.io/cic-code-ar/transforms/ar/ocar/r78/gov.ar.code.title.25.htmlFetched: 11/8/2026