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Water System's Future on Agenda

October 01, 1996|JOHN POPE

After months of negotiating with private companies interested in operating the city's water system, officials have narrowed their choices to one: California-American Water Co. of Chula Vista.

Tonight, at a special meeting, the City Council will decide whether to continue exclusive negotiations with the company or to abandon the controversial privatization plan altogether.

California-American has offered the highest bid to lease and operate the water system, City Manager Bill Smith said. The company has agreed to give the city $151 million in cash payments over 40 years and make $6.5 million worth of improvements to the aging system.

"It's a remarkable deal," Smith said.

He added that the council vote tonight will not involve an actual lease contract. But if the council agrees to continue the negotiations, Smith said, he hopes to return with a final deal Oct. 22.

At that point, he said, "the council will still have the opportunity to turn it down, or say the contract isn't right and needs more work."

City officials have proposed privatization as an alternative to raising residents' water rates by about 25% for needed repairs.

The city's water system, built mostly in the 1950s, is about $10 million in debt and needs about $20 million in improvements, Smith said.

As part of the contract, the city's 30 water employees would be hired by the private company, or remain as city employees "leased" to the company.

The issue has generated controversy, led by Councilman Frank Fry Jr. Fry is running for mayor in November and has circulated fliers outlining his opposition to water privatization.

A flier he distributed throughout the community last week drew about 50 residents to a council meeting. Many of them denounced the plan.

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