(a) The division may contract with any local government to exercise on behalf of such local government such responsibility in connection with the planning, design, acquisition, construction, operation, management, and maintenance of a project of such local government, as is now or may be hereafter vested in the local government, and to provide to the local government goods or services of the division in connection with the planning, design, acquisition, construction, operation, management, and maintenance of any project of the local government, all as the parties to the contract may determine appropriate. Any such local government shall be authorized by such contract to delegate to the division all or such goods or services of the division in connection with the planning, design, acquisition, construction, operation, management, and maintenance of a project as the parties may by contract determine appropriate.

(b) Except as otherwise provided in this article, any such contract shall provide that the local government shall reimburse the division for all of the costs, liabilities, and expenses of the division incurred by the division in exercising such powers or providing such goods or services; and the division shall not directly or indirectly be liable for any liability, cost, or expense incurred by such local government in the acquisition, construction, operation, management, or maintenance of a project.

(c) If, in order to accomplish the objectives of this article, it is advisable, in the judgment of the director and the authority, to construct a project that is larger than one which a local government proposes to construct, the division may participate by agreement with such local government in planning, designing, constructing, operating, and maintaining such project and, in so participating, shall finance those costs of the project allocated to the state and such other and further costs as may be agreed upon between the parties, such that the project shall accomplish the maximum water development objectives at a minimum total expenditure.

(d) The division shall coordinate with the Environmental Protection Division of the department and local governments for the purpose of producing appropriate and necessary needs analyses for projects. In the event that the director, with the approval of the authority, determines that construction of a project is in the best interests of the people of this state but any affected county or municipality is willing but unable to engage in an appropriate needs analysis, the division may conduct such analysis for and on behalf of such county or municipality, and such analysis shall be the needs analysis of such county or municipality with respect to such project for all purposes. Such needs analysis shall be consistent with water demand projections provided by an applicable regional water development and conservation plan developed pursuant to Article 8 of this chapter, if available.