Missouri § 393.770 - Purchase agreements authorized — terms — not to constitute debt.

§ 393.770. Purchase agreements authorized — terms — not to constitute debt.

1.  The contracting municipalities may provide in the joint contract for payment to the commission of funds for commodities to be procured and services to be rendered by the commission.  The contracting municipalities, participating municipalities, and other persons may enter into purchase agreements with the commission for the purchase, sale, exchange or transmission of water, sewage service, gas, heat or any right to capacity or interest in such electric power and energy and any other services provided by the project whereby the purchaser is obligated to make payments in amounts which shall be sufficient to enable the commission to meet its expenses, interest and principal payments, whether at maturity or upon sinking fund redemption, for its bonds, reasonable reserves for debt service, operation and maintenance and renewals and replacements and the requirements of any rate covenant with respect to debt service coverage contained in any resolution, trust indenture or other security instrument.  Purchase agreements may contain such other terms and conditions as the commission and the purchasers may determine, including provisions whereby the purchaser is obligated to pay for water, sewage service, gas, heat, power, or any other services provided by the project irrespective of whether water, sewage service, gas, heat, energy, or any other service is produced or delivered to the purchaser or whether any project contemplated by any such agreement is completed, operable or operating, and notwithstanding suspension, interruption, interference, reduction or curtailment of the output of such project.  Such agreements may be for a term covering the life of a project or for any other term, or for an indefinite period.  The joint contract or a purchase agreement may provide that if one or more of the purchasers default in the payment of its obligations under any such purchase agreement, the remaining purchasers which also have such agreements shall be required to accept and pay for and shall be entitled proportionately to use or otherwise dispose of the water, sewage service, gas, heat, energy, or other service to be purchased by the defaulting purchaser.

2.  The obligations of a contracting or participating municipality under a purchase agreement with a commission or arising out of the default by any other purchaser with respect to such an agreement shall not be construed to constitute debt of the contracting or participating municipality.  To the extent provided in the purchase agreement, such obligations shall constitute special obligations of the contracting or participating municipality, payable solely from the revenues and other moneys derived by the contracting or participating municipality from its municipal utility and shall be treated as expenses of operating a municipal utility.

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(L. 1978 H.B. 1126 § 15, A.L. 1983 H.B. 204, A.L. 1999 H.B. 450 merged with S.B. 160 & 82, A.L. 2004 H.B. 1171)

---- end of effective  28 Aug 2004 ----

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