JOHNSTOWN - The Common Council on Tuesday approved an agreement with water-bottling company CG Roxane LLC to drill test wells on city watershed property in the town of Johnstown because it may be interested in city water.
The California-based CG Roxane, which sells Crystal Geyser Natural Spring Water, previously proposed building a $20 million bottling plant in the town of Ephratah.
The agreement with the city is in effect today and continues until either the city or the company enter into a lease agreement or until July 31, 2013, unless extended by both parties, the resolution states.
City Attorney Susan Palmer Johnson and CG Roxane attorney Page Beykpour have worked for several weeks on the test-drilling agreement.
"We've been working on this with attorney Johnson," Mayor Sarah Slingerland said. "She had many conversations with their attorney. It's been pretty thorough."
Johnstown Water Board President Nicholas Cannizzo Sr., who attended Tuesday's council session, said, "They're going to drill three test wells, 25 feet deep and 2 to 3 inches in diameter. If it produces enough water, they'll ask for a lease agreement to drill bigger wells."
He said the Water Board and city have a right to terminate the agreement "at any time."
Slingerland added the city's agreement with CG Roxane is "a very preliminary step for them and us." She said the city is not receiving any revenue for the agreement, but it eventually could lead to revenue for the Water Board and the Water Department it oversees if the company decides to tap city water.
CG Roxane previously said it wants to build two 100,000-square-foot bottling-plant buildings in Ephratah, east of Murray Hill road and south of Old State Road. The company entered into an agreement with the village of Canajoharie to use its watershed in the town of Ephratah.
CG Roxane is also interested in accessing town of Johnstown land and possibly the city watershed. The company has bought several hundred acres of land in the towns of Johnstown and Ephratah, according to Fulton County Economic Development Corp. President Michael Reese.
The city's Cork Center Reservoir is in the general area of where the company would drill - just east of the Canajoharie waterworks.
The Common Council agreement with the company allows it to "access certain pre-designated portions of the waterworks property where it believes spring water resources exist for possible development of a spring water-bottling plant in the town of Johnstown or the town of Ephratah."
The city Water Board on Feb. 13 approved a similar agreement with CG Roxane to explore certain parts of the city's 1,860-acre watershed.
Fulton County Planning Director James Mraz, who has worked with Ephratah and CG Roxane, said last week CG Roxane hoped to use 600,000 gallons of water a day from the watershed land in Ephratah and the town of Johnstown that supplies village residents. But after an "expensive study," Mraz said, the company determined only about 310,000 gallons of water a day would be available at that site.
Beykpour, CG Roxane's executive vice president, general counsel and sole spokesman, has not returned repeated phone messages seeking comment.
Michael Anich covers Johnstown and Fulton County news. He can be reached at johnstown@leaderherald.com.