Can an Arkansas regional public water authority shut off water service to a city customer for unpaid bills?

Plain-English summary

State Representative David Branscum asked AG Dustin McDaniel whether the Ozark Mountain Regional Public Water Authority could refuse water service to the City of Marshall for unpaid bills. The Water Authority is organized under Act 115 of 2001 and governed by the Water Authority Act in title 4, chapter 35 of the Arkansas Code. The AG concluded that the answer turned on the wholesale water contract between the parties, not on any direct statutory rule, because A.C.A. § 4-35-210(22) authorizes a water authority to enter into water contracts "on the terms and conditions the board determines are in the best interest of the water authority." The Water Authority Act itself is silent on procedures for discontinuing service. Beyond the contract-interpretation barrier, the AG also abstained under the office's long-standing policy against opining on matters in active litigation. The same contract was already the subject of Ozark Mountain Regional Public Water Authority v. City of Marshall in Searcy County Circuit Court (Case No. CV 2013-49).

Currency note

This opinion was issued in 2014. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

What the AG concluded

The AG declined to answer on two independent grounds:

Ground 1: Contract interpretation is outside the AG's role.
A.C.A. § 4-35-210(22) gives a water authority broad statutory power to enter into wholesale water contracts on whatever terms its board negotiates. Whether the contract permits service cutoff for nonpayment depends on the actual contract terms. The AG has a long-standing policy (citing Op. Att'y Gen. 98-072) against engaging in contract construction. The opinion also cited Op. Att'y Gen. 2008-028, which found that both the Water Authority Act and its rules are silent on procedures for discontinuing service to a water user.

Ground 2: Pending litigation.
The wholesale water contract between the authority and Marshall was already in litigation in Searcy County Circuit Court (Case No. CV 2013-49). The AG's office, citing Op. Att'y Gen. 2010-047, declined to issue opinions on matters that are the subject of pending litigation.

Common questions

Q: Does the Water Authority Act itself give a regional water authority the right to cut off service?
The Water Authority Act is silent on procedures for discontinuing service to a water user (Op. Att'y Gen. 2008-028). The statutory framework instead empowers the authority's board to negotiate contract terms with each wholesale customer.

Q: Why won't the AG just say whether the cutoff is legal?
Two reasons. First, the answer requires interpreting a specific contract, which is outside the AG's advisory-opinion role. Second, the parties are already in court over the same contract, and the AG abstains from opining on issues in active litigation to avoid prejudicing the case.

Q: What is Act 115 of 2001?
The act under which Ozark Mountain Regional Public Water Authority was organized as a domestic public water authority. It is codified at A.C.A. title 4, chapter 35.

Q: If a customer city stops paying its wholesale supplier, what recourse does the supplier have?
The opinion implies the answer lies in the parties' contract and in general remedies for breach. The Water Authority Act does not provide a separate statutory remedy or procedure.

Q: Where could a citizen of Marshall find out what happens next in the litigation?
The case was Ozark Mountain Regional Public Water Authority of the State of Arkansas v. City of Marshall, Arkansas, Searcy County Circuit Court Case No. CV 2013-49. Records would be available through the Searcy County Circuit Clerk.

Background and statutory framework

A "domestic public water authority" formed under Act 115 of 2001 is a creature of statute governed by A.C.A. title 4, chapter 35. The Water Authority Act vests the authority's board with broad commercial power, including under A.C.A. § 4-35-210(22) "to enter into water contracts for the purchase or sale of water on a wholesale basis on the terms and conditions the board determines are in the best interest of the water authority." Because so much is left to contract, disputes between an authority and a wholesale customer typically turn on contract terms and ordinary contract remedies rather than on a statutory adjudication.

The AG's authority to issue opinions sits at A.C.A. § 25-16-706. The office observes two long-standing self-limitations: it does not interpret private or quasi-private contracts (Op. Att'y Gen. 98-072, 2005-021) and it does not opine on issues in pending litigation (Op. Att'y Gen. 2010-047). Both limits applied here.

Citations

Statutes

• A.C.A. § 4-35-210(22) (water authority power to enter wholesale water contracts)
• A.C.A. § 25-16-706 (AG opinion authority)
• Act 115 of 2001 (Water Authority Act, codified at A.C.A. title 4, chapter 35)

Cases

• Ozark Mountain Regional Public Water Authority of the State of Arkansas v. City of Marshall, Arkansas, Searcy County Circuit Court Case No. CV 2013-49 (referenced)

Prior AG opinions

• Op. Att'y Gen. 2008-028, 98-072, 2005-021, 2010-047

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

STATE OF ARKANSAS

THE ATTORNEY GENERAL
DUSTIN McDANIEL

Opinion No. 2014-033

April 4, 2014

The Honorable David L. Branscum
State Representative
Post Office Box 370
Marshall, Arkansas 72650-0370

Dear Representative Branscum:

You have requested my opinion on whether it is permissible for the Ozark Mountain Regional Public Water Authority to refuse water service to the City of Marshall for lack of payment.

RESPONSE

According to the Arkansas Secretary of State's website, the Ozark Mountain Regional Public Water Authority is organized as a domestic public water authority under Act 115 of 2001. As such, it is governed by the Water Authority Act, which is codified at Arkansas Code title 4, chapter 35 (Supp. 2013). My review of this body of law indicates that your question is a matter of contract between the parties. I am consequently unable to offer an opinion on the matter, as this would entail reviewing contractual terms in conjunction with any applicable corporate documents and procedures. Such an analysis is not within the scope of an Attorney General Opinion.

It has also come to my attention that the water purchase contract between the Ozark Mountain Regional Public Water Authority and the City of Marshall is the subject of currently pending litigation. Although I have a statutory duty to render my opinion to members of the legislature and various state officials regarding matters of state law, my office adheres to a long-standing policy against issuing opinions concerning matters that are the subject of pending litigation. Accordingly, I must for this additional reason respectfully decline to address your question.

I regret I could not be of assistance in this matter. Please feel free to contact me if I can help you in some other respect.

Deputy Attorney General Elisabeth A. Walker prepared the foregoing opinion, which I hereby approve.

Sincerely,

DUSTIN MCDANIEL
Attorney General

DM:EAW/cyh