(a) Any city of the first class, city of the second class, and incorporated town owning a waterworks system, sewer system, gas system, electric system, television signal distribution system, other municipal utility system, or any combination thereof, may lease such system or systems to any nonprofit corporation organized under the laws of the State of Arkansas, or may contract with any such nonprofit corporation, for the purpose of the management and operation of such system or systems for such period of time and upon such terms and conditions as may be deemed to be in the best interests of the city or town.
(b) The nonprofit corporation shall manage and operate the utility system or systems solely on behalf of the city or town and shall be deemed an instrumentality thereof for such purpose.
(c) No such lease or contract shall contain an option to purchase or otherwise transfer ownership to such utility system or systems, nor shall any such lease or contract have a term which is more than eighty percent (80%) of the reasonably expected economic life of the utility system or systems.
(d) The directors of the nonprofit corporation shall be nominated by its members, and the members and directors shall be approved by the council, board of directors, or other like body in which the legislative functions of a municipality are vested and shall be residents of the city or town.
(e) The provisions of subsections (b) and (d) of this section shall not apply to nonprofit corporations formed under the provisions of § 23-18-301 et seq., and nothing in this subchapter shall act to prevent or prohibit a city or town from entering into a lease or contract with such a nonprofit corporation for the purposes set out in subsection (a) of this section.
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