(a) In the exercise of its powers under this article, the department may contract with any public entity which shall include the state or any institution, department, or other agency thereof or any county, municipality, school district, or other political subdivision of the state or with any other public agency, public corporation, or public authority, for joint services, for the provision of services, or for the joint or separate use of facilities or equipment with respect to such activities, services, or facilities which the contracting parties are authorized by law to undertake or provide.

(b) Pursuant to any such contract, in connection with any facility authorized under this article, the department may undertake such facility or provide such services or facilities of the department, in whole or in part, to or for the benefit of the public entity contracting with the department with respect to those activities, services, or facilities which the contracting public entity is authorized by the Constitution and law to provide, including, but not limited to, those set forth in Article IX, Section III, Paragraph I of the Constitution, and any such contracting public entity is authorized to undertake to pay the department for such activities, services, or facilities such amounts and upon such terms as the parties may determine.

(c) The state and each institution, department, or other agency thereof or each county, municipality, school district, or other political subdivision of this state and each public agency, public corporation, or public authority is authorized to contract with the department in connection with any activity, service, or facility which such public entity is otherwise authorized to provide to obtain the performance of such activity or provision of such services or facilities through the department.

(d) In connection with its operations, the department may similarly obtain from, and each public entity may provide, such activities, services, or facilities which the department is authorized to provide.

(e) The department shall establish prior to the commencement of each project a Project Water Users Advisory Council and a Project Site Control Advisory Council. The membership of the Project Water Users Advisory Council shall include the chief executive officers, or their designees, of each local government purchasing water from the project. The membership of the Project Site Control Advisory Council shall include the chief executive officers, or their designees, of each local government within which any part of the project is located. The commissioner, or his designee, shall serve as an ex officio member of each advisory council. Each advisory council formed shall meet from time to time as provided by rule and regulation of the Board of Natural Resources and shall elect its own officers and establish such bylaws as its membership may deem appropriate for the conduct of its business. Each Project Water Users Advisory Council shall consult with and advise the department concerning the operation and management of the project for which it was formed. The operation and management of a project shall be subject to the review of the Project Site Control Advisory Council formed for such project.

(f) A local government by resolution of its governing body may enter into a user agreement for the provision of environmental services utilizing facilities owned by the state upon such terms and conditions as the department shall determine to be reasonable including, but not limited to, the reimbursement of all costs of construction and financing and claims arising therefrom.

(g) No user agreement shall be deemed to be a contract subject to any law requiring that contracts shall be let only after receipt of competitive bids.

(h) Any user agreement directly between the state or department and a local government may contain provisions requiring the local government:

(1) To establish and collect rents, rates, fees, and charges so as to produce revenues sufficient to pay all or a specified portion of:

(A) The costs of operation, maintenance, renewal, and repairs of the water facility; and

(B) Outstanding bonds, revenue bonds, notes, or other obligations incurred for the purposes of such water facility and to provide for the payment of all amounts as they shall become due and payable under the terms of such agreement, including amounts for the creation and maintenance of any required reserves;

(2) To create and maintain reasonable reserves or other special funds;

(3) To create and maintain a special fund or funds as additional security for the punctual payment of any rentals due under such user agreement and for the deposit therein of such revenues as shall be sufficient to pay all user fees and any other amounts becoming due under such user agreements as the same shall become due and payable; or

(4) To perform such other acts and take such other action as may be deemed necessary and desirable by the department to secure the complete and punctual performance by such local government of such lease agreements and to provide for the remedies of the department in the event of a default by such local government in such payment.