Wastewater treatment deal hits snag

Public Record, The, Aug 10, 2004 by Kleinschmidt, Jancie

Desert Water Agency and Palm Springs city officials will have to put the champagne back on ice. After years of negotiations and a lawsuit filed by the water agency against the city, the two par-ties reached agreement on the sale of Palm Springs' wastewater treatment plant to DWA in May. At a press conference announcing the turn of events, Mayor Ron Oden said, "I believe that this sale will be a win-win for everyone."

In fact, the city planned to assemble a task force to recommend the best uses of the proceeds from the $27.5 million sale.

Now, it turns out, the deal must be put before local voters next March, more than six months after escrow would have closed under the anticipated timetable. The decision to put the issue before the public came after City Attorney David Aleshire's office "discovered" a section in the Public Utilities Code addressing the situation.

Aleshire was unavailable to explain why the revelation occurred at such a late stage, but Assistant City Manager Troy Butzlaff says, "It's a very obscure code section." About 2 1/2 to three weeks after the deal was announced, the city attorney was instructed to start preparing the agreement to consummate the deal, he says. "His staff discovered the code section and they said it required additional research."

The issue was discussed internally with the city council in closed session, then with Desert Water Agency officials and then between their respective legal counsel. They decided to take a conservative approach in interpreting the applicability of the code regardless of a passed ballot measuring allowing the DWA to purchase the plant. Assuming the March ballot measure passes, "there should be no impact in the terms of the agreement," Butzlaff says.

Pat Oygar, a member of the DWA board of directors, says it is important to ensure the public i s aware of the issue and is comfortable with the sale.

"I think it's one of the most important things for our community going for

ward," she says. "I plan on being very active in communicating the importance of this deal going through."

When city and water agency officials announced the agreement in May, they ran ads, mailed brochures to water customers, held a town hall meeting and offered tours of the plant. "We got a great response," Oygar says. "So we have been up and running with a public campaign, and I see that continuing and, of course, being added to in anticipation of the election."

As for the pending lawsuit, Oygar says the parties have agreed to put it on hold pending what they hope will be a successful election outcome.