1. A. For the purpose of obtaining, securing or supplementing its water supply and providing for the storage, treatment, distribution and transportation of water, a municipality may by ordinance:

   1. (1) contract over a period of years with:

      1. (a) the United States government or any of its agencies;
      2. (b) the state of New Mexico or any of its agencies, boards or instrumentalities; or
      3. (c) any person or association;
   2. (2) agree to accept any pay for a specified amount of water per annum during the term of the contract; and
   3. (3) adopt and enforce water charges sufficient to meet the payments required by the contract.
2. B. Payments required by a contract authorized by this section shall be made from any funds of the municipality other than the proceeds from an ad valorem tax and shall be considered an expense of the operation and maintenance of the water utility. In no event shall the obligation to make such payments be considered a general obligation or indebtedness of the municipality within the meaning of any constitutional or statutory provision.
3. C. Two or more municipalities may become parties to any contract authorized by this section.

History: 1953 Comp., § 14-26-5, enacted by Laws 1965, ch. 300.

ANNOTATIONS

Appropriation of underground water. — Where a municipality files applications with the state engineer to appropriate underground water, only if they are approved will any type of purchase financing be required and only subsequent to such approval could the amount of the obligation be ascertainable, in which event such financing might be accomplished by means which would satisfy the requisites of either this section or 6-6-11 NMSA 1978. City of Hobbs v. State ex rel. Reynolds, 1970-NMSC-133, 82 N.M. 102, 476 P.2d 500.

Contract for lease amounted to invalid contract of sale. — An ordinance creating a contract termed a lease for water supply for a town, the town to become owner in 10 years, amounted to a contract of sale and was invalid because not submitted to the voters. Hagerman v. Town of Hagerman, 1914-NMSC-037, 19 N.M. 118, 141 P. 613.

Am. Jur. 2d, A.L.R. and C.J.S. references. — Special requirements of consumer as giving rise to implied contract by public utility to furnish particular amount of electricity, gas, or water, 13 A.L.R.2d 1233.