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Page 3 of 4 on their sewers, and she questioned whether the private involvement in sewer systems would strip them of the governmental immunity that limits damages plaintiffs can collect in lawsuits. Awada, a former Eagan City Council member, said she would advise anyone who asked her, including her former Eagan colleagues, to stay away from the leases. "It truly is a tax-evasion scheme that is being proposed by big banks," she said. The infrastructure lease plans were first brought to the Minnesota cities by the League of Minnesota Cities. The league, which lobbies on behalf of cities, contracted h Allco Finance Corp., an offshoot of an Australian company (the name stands for Australian Leveraged Leasing Company), to organize a consortium of smaller cities to pool their infrastructure to form a lease package big enough to attract bids from giant banks and corporations hungry for tax deductions. League officials say they are offering, not promoting, the leases to cities, but the league is scheduled to receive a fee equal to one-half of 1 percent of the value of any infrastructure that participating cities lease. St. Paul and the Metropolitan Council were approached separately by Allco and by other investment companies, and are not part of the league's consortium. Allco has promoted similar sewer system leases to cities throughout the Dakotas. Tom Grundhoefer, general counsel for the League of Minnesota Cities, said city councils in eight cities have signed preliminary contracts granting Allco exclusive rights for two years to try to put together a lease deal involving their sewers. He said the eight are: Austin, Burnsville, Cannon Falls, Little Falls, Long Prairie, Owatonna, Rochester and St. Michael. City officials in Duluth and Eagan are considering similar agreements. Minneapolis City Coordinator John Moir said officials there were not interested in the lease proposals because they feared taking the sewers off the city's balance sheet as an asset would damage Minneapolis' credit rating. The Western Lake Superior Sanitary District, a sewage treatment district that serves Duluth and surrounding communities, also signed a preliminary agreement with Allco. "I would not describe our board as comfortable with the transaction, but they didn't want to lose the opportunity to provide some substantial funds for our users if this was all legal, ethical and acceptable to the federal government," said Kurt Soderberg, the sanitary district's executive director. Patrick Sweeney covers state government and politics. He can be reached at 651-228-5253 or psweeney@pioneeroress.com. 8 email this I print this l license this I reprint this Joseph 0. Steffel Utilities Director 11/26/03