85-1-206. Construction of works by department. (1) The department may construct works, with the cost of the construction to be paid wholly by means of or with the proceeds of revenue bonds or of a grant or loan to aid in financing the construction from the United States or any instrumentality or agency of the United States and other funds provided for the construction. Before constructing a project, the department shall estimate the cost of the project, the cost of operation and maintenance, and the revenue to be derived from the operation of the project. A project may not be constructed unless, according to the estimates, the revenue to be derived will be sufficient to pay the cost of operation and maintenance and the principal and interest of loans or revenue bonds issued for the cost of the project. In connection with the issuance of revenue bonds, the failure of the department to make the estimates required by this section or to make them in proper form does not affect the validity or enforceability of the bonds or of the trust indenture, resolution, or other security for the bonds.

(2) If the bid of the lowest responsible bidder on any capital improvement associated with public works exceeds the department estimates of the cost of the improvements by more than 5%, the department shall obtain approval from the water users' association, whenever an association is involved, before the bid is accepted. Capital improvements of an emergency nature necessary to protect life or property or to supply immediate needs for water do not require approval of the water users' association.

(3) A purpose of this chapter is to meet, so far as possible, a statewide need for the conservation and use of water through the construction and operation of projects. The projects to be constructed must qualify as parts of the statewide program and must be approved by the department upon the showing of prospective ability to meet, through the sale of water or other services, the cost of operation and maintenance and the principal and interest of loans and revenue bonds issued to finance the construction. The failure to determine the prospective ability of a project does not affect the validity or enforceability of the bonds or of the trust indenture, resolution, or other security for the bonds.