Arkansas Code
Subchapter 1 - General Provisions
§ 14-234-111. Service to adjacent areas — Municipalities generally

(a) Any municipality in the State of Arkansas owning and operating a municipal waterworks system or a municipal sewer system or both may extend its service lines beyond its corporate limits for the purpose of giving water service, sewer service, or both, to adjacent areas where the demand for service is sufficient to produce revenues that will retire the cost of the service lines.
(b)
(1) A municipality owning and operating a municipal water or sewer system, or both, without applying for a certificate of convenience and necessity, extend its water lines and sewer lines or both to serve the adjacent or nearby areas.
(2) In order to secure the funds with which to make the service line extension or extensions, the municipality may issue negotiable coupon bonds or interest-bearing certificates of indebtedness to be paid out of the net revenues derived from the operation of the services so extended and, for the payment of the bonds, may pledge not only the net revenues from the areas but also any unpledged revenues derived by the municipality from the operation of either its water or sewer system, or both, that may be available from year to year in order to prevent a default in the payment of the revenue bonds issued for the extension beyond the corporate limits.

(c) The bonds or certificates of indebtedness authorized under this section shall be issued and sold under the provisions governing the issuance and sale of municipal water revenue bonds, as set out in subchapter 2 of chapter 234 of this title.
(d) Any municipality extending a service to an adjacent or nearby area shall have the power to fix the schedule of rates for services so extended.
(e) For the purpose of carrying out the provisions of this section, a municipality shall have the right of eminent domain as is provided in §§ 18-15-301—18-15-307.
(f) Nothing in this section shall be construed to require a municipality to extend either water or sewer service to adjacent or nearby areas.

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