In exchange for an 18-year partnership with New London, the company that takes care of the day-to-day operations of the municipal water and sewer departments is making an upfront payment of $2 million to the city.

The City Council last Monday unanimously extended Veolia Water's contract to 2028. The city negotiated with Veolia in 2008 for about $60 million for a 10-year contract with an option to renew for another 10 years. On Nov. 29, the council, in effect, agreed to renew the contract eight years early.

Veolia negotiated with the city to save about $4 million to $4.5 million in electrical and other costs over the 18 years. It will also upgrade the utilities' infrastructure in order to save on the cost of providing water and sewer.

"There was give and take,'' Barry Weiner, chairman of the Water and Water Pollution Control Authority, said last Monday night. "But the authority and the city are doing very well, and Veolia is doing well. This was in our own best interest."

Veolia will replace raw pumps at the water treatment plant, blower treatment fans at the waste water treatment facility, and improve the nitrification and denitrification equipment there, Weiner said.

The renegotiated contract also provides long-term stable employment for the roughly 35 people who work in the department. Veolia pays the health insurance for those municipal workers.

The water authority approved the contract earlier Monday in a 6-1 vote, with member Evelyn Louziotis voting against it.

Mayor Rob Pero, who approached water company officials in March and brought in Weiner and City Manager Martin H. Berliner to begin contract negotiations, said the $2 million will be split between the city and the water and sewer authority.

The council has yet to decide how the money will be spent, but Pero said he is hoping the city will continue with its capital improvement plans, which have already upgraded roads and parks. And depending on how the budget season goes in Hartford, some of the money could also be used to offset any tax increases.

"The city could utilize these much needed dollars,'' he said.

There will be no decrease in water rates for the roughly 14,000 customers, Weiner said. But the authority will use its $1 million to improve its infrastructure and to keep rates stable over the few years. The city has the third lowest water rate in the state and four or fifth lowest sewer rate, he said.

"I think this is some progressive thinking,'' said City Councilor Michael Buscetto III.

k.edgecomb@theday.com