Arkansas Code
Subchapter 1 - General Provisions
§ 14-234-118. No abrogation of existing contracts — Exception

(a) As used in this section:
(1) The term “utility service” shall mean utility service of municipally owned water utilities and shall not mean utility service of municipally owned electric utilities, municipally owned natural gas utility systems, or consolidated municipal utility improvement districts;
(2) The term “abrogate” means to cancel, invalidate, nullify, annul, void, revoke, rescind, deny, repudiate, or otherwise terminate or refuse to honor.

(b) The provisions of this section shall not apply to contracts between a municipality within this state and an entity or entities located outside the boundaries of this state.
(c)
(1) The governing body of a municipality shall have no authority, by ordinance or otherwise, to abrogate an existing contract to furnish water utility service to residents in an area outside the boundaries of the municipality unless provided for by mutual agreement of all parties involved. Provided, nothing herein shall be construed to prohibit or restrict the authority of the governing body of a municipality to revise a revision of the rates to be charged water utility users in an area outside the boundaries of the municipality if circumstances arise which justify a revision in such rates or charges.
(2) Provided further, nothing herein shall be construed to prohibit or restrict the authority of a municipality to enforce payment of utility bills by disconnecting utility service and terminating contracts to furnish utility service.

(d) Nothing contained in this section shall require a municipally owned water utility to extend new service under existing water supply contracts outside its corporate limits or continue service under existing water supply contracts outside its corporate limits, if, in the opinion of the municipally owned water utility, such extension or continuance of service would be an engineering or financial impracticality, affect the reliability or quality of service to customers served under such extension or continuance, or affect the reliability or quality of service to other customers of the municipally owned water utility.

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