Water Lease Plan ‘Dead,’ Official Says

Though new City Council members won’t take office until December, last week’s municipal elections are having one immediate effect: halting a plan to lease the city’s water system to an outside company, City Manager Bill Smith said Monday.

“The plan’s dead,” Smith said. “Philosophically, it’s not what the community wants to do.”

Councilman Frank Fry Jr., a strong opponent of the proposed lease, won the mayor’s seat Nov. 5 over Councilwoman Charmayne S. Bohman, who had said she might support the plan.

Former Councilwoman Joy L. Neugebauer, who said she was against the city’s proposal “in its current form,” won a seat on the council.

The election sent such a strong message against the lease plan, Smith said, that at tonight’s council meeting he will recommend that, “as of now, we bury this thing. I don’t see the point in continuing when I don’t see how the new council would do anything but drop it.”

City staff members have been negotiating with private water companies for several months and had recently made their choice of the bidder. The company had offered the city $151 million in cash payments over 40 years and promised to make $6.5 million worth of improvements to the aging water system.

An independent audit of the plan by accounting firm Arthur Andersen Inc., to have been presented to the council today, confirmed many of the projections and figures calculated earlier by the city staff.

But the future of the water system, which is $10 million in debt and needs extensive repairs, is now uncertain. Officials had proposed the lease as an alternative to raising residents’ water rates by about 25% to pay for the repairs.

Fry, the mayor-elect, said he is confident that the city can manage the system itself.

“It’s got to be a stand-alone operation,” he said. “We can run it was well as a private company.”