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Show Negotiators continue to work toward sewer privatization by Christopher Smart Negotiators for the Snyderville Basin Sewer Improvement District and two engineering firms are racing the clock to reach an agreement by March 19 when a decision is due. on ; whether the firms should build and .operate a new sewage line and : treatment plant. Snyderville District Manager Rex Ausburn said preliminary indications show the district could save from 20 to 25 percent on the debt service of the facilities over 20 years if a private firm builds and operates the line and plant (an arrangement called privatization). priva-tization). The savings would be due to tax savings on depreciation and investment tax credits. However, major obstacles still exist between the Snyderville District Dis-trict and the firms of Fluor Engineering and Metcalf and Eddy Engineering, which have proposed a joint venture to build and operate the facilities. Among the stumbling blocks that must be resolved by Tuesday are exact figures for operation ana management fees and precise debt service figures, Ausburn Aus-burn said. Other items to be agreed upon include responsibility of tax risks. Ausburn explained this as a question of how the losponsibilities would be shared if tax laws are changed during the 20-year period in which the firms propose to own and operate the facilities. Another important item to be resolved is the re-purchase price if the district decides to buy the plant two decades from now. Ausburn said a contract between the entities would not be signed next week if all points are "ironed out." However, if privatization is to become a reality, the concepts must be agreed upon by that time. If those agreements are reached, legal documents will, be drawn up with a final contractual agreement due in August. Meanwhile, the district has entered into an agreement with the engineering firms that is related to but separate trom the privatization contract. Ausburn said Fluor and Metcalf and Eddy have been retained by the district for "professional "profes-sional construction management", services.. He explained this "dual track" strategy will allow the Snyderville . District to begin planning construction construc-tion whether or not the engineering firms reach an' agreement with the district to build and operate the sewage line and treatment plant. In the event the district determines deter-mines it will build the facilities itself, Ausburn said construction will begin in the spring. Already in place is the financial mechanism for construction if the district is to build the line and plant. The Snyderville District has in its possession $8.9 million in funds from a state loan and the issuance of a general obligation bond. If the contract for the construction of the facilities is awarded to Fluor and Metcalf and Eddy, Ausburn said the state loan and bond money will be repaid immediately. |