(1) Any city of the first class owning or operating a water system may, in its governmental capacity, sell surplus water at contractual rates to any person engaged in the business of selling and distributing water to consumers within a zone which is adjacent to and commercially a part of the city, or within any municipality which is within a zone adjacent to and commercially a part of the city, provided that the person has been authorized to engage in such business by the legal authority with jurisdiction to regulate it.
(2) Delivery of the water to the person shall be made at a point not beyond the corporate limits of the city.