More than $2.5 million in debts are at issue in negotiations between the Calaveras County Water District and Utica Power Authority.

CCWD decided last summer to withdraw from the UPA because it wasn't benefiting from the partnership. None of CCWD's customers are on the UPA system and board members said they shouldn't have to help fund the Angels Camp utility.

But there are still outstanding debts that must be paid.

Lawyers are working on a plan to repay CCWD $1.3 million of a $2 million loan it gave UPA in the mid-1990s to help it start. About $700,000 of the loan has been paid.

They're also crafting details of an agreement that will help repay another $1.3 million to La Salle Bank of Chicago, which loaned the joint powers agency another $2 million, said UPA Chairwoman and Angels Camp Mayor Debbie Ponte.

"How we ultimately deal with that will be disclosed (after negotiations are complete," said Angels Camp City Attorney Richard Matranga.

After a closed-session Angels Camp City Council meeting on Wednesday, Matranga said he thinks UPA and CCWD might be close to an agreement and are working on the terms and conditions. He called the negotiations "fairly positive."

Ken Airola, attorney for the Murphys-based Union Public Utility District, a UPA member, didn't comment on the negotiations. He said he'd just sent a draft of the negotiations to CCWD. Alan Turner, the district's assistant general manager and attorney, said he received it Friday.

"Things are moving forward because we've just received that," Turner said. "We're close on terms anyway .... This has been going back and forth several times."

He said as far as repaying old debts, "there's no sticking point at all."

UPA board members were at first surprised when they found out CCWD wanted to withdraw from the joint powers authority, but said they no longer need its financial help.

Williams said he thinks UPA will be fine on its own.

"I think it'll be all right," he said. "I think they rely on revenues of the sale of hydroelectricity of the plant to finance their operation. CCWD has no effect on the revenue side."

UPA sells surplus water to the Northern California Power Agency, which uses it for power generation.

The agency was founded in the mid-1990s by CCWD, Union Public Utility District in Murphys and the Angels Camp City Council to give residents control of the water supply in Angels Camp and Murphys.

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