Section 21-27-7 - Waterworks(1)(a) The governing authorities of municipalities shall have the power to erect, purchase, maintain and operate waterworks, and to regulate the same, and to prescribe the rates at which water shall be supplied to the users. The rates at which water, wastewater, and sewer services shall be supplied shall be just and reasonable based on the actual cost to operate and maintain the systems, and rates may not be unreasonably preferential, prejudicial or discriminatory but shall be sufficient, equitable and consistent in application to each class of users. While a municipality may set different rates for different classifications of users, a municipality shall not discriminate in setting rates among members of the same classification. The municipal governing authorities shall make a finding on the minutes of the governing body establishing the rate based on the actual cost to operate and maintain the system. A municipality shall not charge a user a fee for services received which is less than the cost incurred by the municipality to provide such services.(b) The governing authorities of a municipality shall establish and maintain rates and charges in equitable proportion to the use of the services and benefits rendered by the waterworks systems and water treatment facilities serving the municipal area. From time to time the governing authorities shall adjust such rates, to the end that the revenues therefrom will be sufficient at all times to pay the expenses of operating and maintaining such works, facilities and systems and all of the municipality's obligations under any contract or bond resolution with respect thereto. The calculation of a user's bill shall be limited to the actual amount of volumetric usage, plus those fees reasonable and necessary for the cost of capital expenses, system operation and maintenance, and debt service.(c) If a user's meter is tampered with, unreadable, or otherwise out-of-order, a municipality may render an estimated bill to that user for a period not to exceed six (6) months. In such circumstance, an estimated bill shall be based upon the prior average measured usage of the user or a similar user of the same classification. (i) Only in the event a municipality is unable to meet the requirement of billing based solely on volumetric usage, such municipality may bill based on a flat fee rate where such municipality has established flat fee billing as its usual and customary billing practice prior to July 1, 2023, and where such municipality is actively billing based upon a flat fee rate as of July 1, 2023. In such circumstances, flat fee billing may be utilized until such time as the municipality implements upgrades to its system to provide for volumetric billing. In such circumstance, the municipality may set different flat fee rates for different classifications of users, but the municipality shall not discriminate in setting flat fee rates among members of the same classification, and the municipality shall not charge a user a fee for services received that is less than the cost incurred by the municipality to provide such services.(ii) The governing authorities of the municipality shall make a finding annually on the minutes of the governing body establishing the rate based upon the actual cost to operate and maintain the system as determined under Generally Accepted Accounting Principles, and the municipality shall not charge a user a fee for services received that is less than the cost incurred by the municipality, or based on the assessed value of the property, to provide such services.(d) Notice of any change in the rate or rate structure at which services are supplied shall be posted on all bills sent to users at least one (1) month prior to the effective date of the rate change. Notice shall also be posted to the municipality's online web page or bill payment platform, if the municipality has an online web page or bill payment platform.(e) Nothing in this statute shall be construed as prohibiting a user or governing authority of any municipality from applying for and receiving any federally or privately subsidized payment assistance, grant or other funds.(f) The governing authority of a municipality may provide for the calculation of a user's bill by a method other than volumetric usage only in exchange for consideration as part of, or in connection with, an incentive contract or other form of benefit or assistance related to the user's location, expansion, or maintenance of its commercial or industrial operation within the municipality, so long as such rate is equitable, fair, and nondiscriminatory, and the municipality shall not charge such user a fee for services received that is less than the cost incurred by the municipality to provide such services.(2) The governing authorities of municipalities shall have the power to acquire by purchase, donation or condemnation, in the name of the municipality, suitable grounds, within or without the corporate limits, upon which to erect waterworks, and also the right-of-way to and from such works and the right-of-way for laying water pipes within the corporate limits, and from such waterworks to the municipality, and to extend such right-of-way from time to time. The governing authorities shall have the power to contract with any person for the maintenance and operation of waterworks. The authorities shall have the power to contract with any person for the erection and maintenance of waterworks for a term not exceeding twenty-five (25) years, fixing water rates in the contract subject to municipal regulations. A contract for the erection or purchase of waterworks shall not, however, be entered into until submitted to a vote of the qualified electors and approved by a majority of those voting. A contract for maintenance under which the person who will perform such maintenance is wholly or partially responsible for fixing water rates shall not be entered into until submitted to a vote of the qualified electors and approved by a majority of those voting. It shall be unlawful for any municipally owned waterworks to supply water free of charge, or in any amount less than the fixed charges, to any person, firm or corporation, except as is expressly authorized by law.Codes, 1892, § 2948; 1906, § 3339; Hemingway's 1917, § 5836; 1930, § 2415; 1942, § 3374-130; Laws, 1950, ch. 491, § 130; Laws, 1976, ch. 458; Laws, 1987, ch. 525, § 1, eff. 10/20/1987 (the date the United States Attorney General interposed no objections).Amended by Laws, 2023, ch. 467, HB 698,§ 1, eff. 7/1/2023.