12-5503. Same; service agreement; term; service fee; limitations.
12-5503
12-5503. Same; service agreement; term; service fee; limitations.
(a) Subject to provisions contained in this act, a
municipality may enter into a service agreement for a term not
to exceed 30 years. However, the service agreement may permit the municipality either to
extend or renew the term of the service agreement, so long as the
municipality is not bound under the service agreement for an extended period
or renewal period of more than 30 years. Under the service agreement, the
municipality may:
(1) Obligate itself to pay or cause to be paid a service fee for the
availability and use of the capital intensive public service to be
furnished under the service agreement;
(2) enter into other agreements relating to the services to be provided
which the municipality considers appropriate and which are not otherwise
contrary to law; and
(3) either pledge its full faith and credit or obligate a specific source
of payment for the payment of the service fee.
(b) The obligation of the municipality to pay the service fee
under the service agreement
shall not be within any statutory limitation on the bonded indebtedness of
the municipality.
The amount of
money to be paid by a municipality pursuant to a service agreement shall
not exceed 5% of the bonded debt limit of the municipality.
History: L. 1990, ch. 64, § 3; July 1.