With deadlines looming over discharges into the Santa Clara River, the Santa Paula City Council on Monday weighed whether to pick a multinational French company to build its sewer plant or a Costa Mesa competitor that insisted it offered a safer deal.

City staff have recommended the council choose Veolia Water, which has been called the largest private water company in the world. The other company they evaluated is PERC, which has offices in Arizona and California. Both made presentations before the council Monday night.

A financing representative for PERC said its proposal was stronger in part because of the financing. "In considering a 30-year relationship, it's important that you know who your partner is," said Philip W. Dyk, a partner in Alinda Capital Partners, which would fund PERC's project.

But Robert Ashfield, a vice president of Veolia's North America-West Division, said Veolia offers years of expertise in building this type of plant. "We stand by our proposal," he said. "We are ready to go to work for the city of Santa Paula."

City officials cast the decision as critical. The winning contractor will be responsible for the design, construction, operation and financing of the city's largest public works project in recent history.

"It is probably one of the biggest decisions that the Santa Paula City Council in the last 50 years has had to make," Mayor Bob Gonzales said.

Critics said Santa Paula should choose PERC, which is offering guaranteed financing. Veolia has offered to secure a loan, but is not locking in the interest rate as part of the deal.

"The numbers don't add up," Gayle Washburn, a controlled growth proponent in neighboring Fillmore, said in a brief interview. "It will end up costing the city of Santa Paula more. Who knows what will happen if we get an inflationary period."

Under a settlement with the state Attorney General's Office, the $58 million facility must be completed by September 2010 and meet federal pollution standards by the end of that year.

Under terms of that deal, the council must approve a design by April 15 and construction must begin by July 15.

The new facility, planned for a site near the existing plant which lies south of Highway 126 on the city's western edge, would replace a 1939 plant that discharges treated effluent into the river.

Although its technology has been upgraded over the years, the existing plant is incapable of meeting federal clean water standards and sometimes emits foul odors.

Santa Clara is the only large river still in a mostly natural state left in Southern California. Environmentalists say the new plant and one being built upstream in Fillmore will boost water quality in the lower part of the 100-mile river.

"They will help immensely," said Ron Bottorff, chairman of the Friends of the Santa Clara River.

At issue in Monday night's decision was whether the city should take the risk of handling the financing so that it could negotiate better terms later.

Veolia guaranteed the construction and operating costs and is working with Morgan Stanley on a construction loan, city officials said.

PERC guaranteed the entire package in a competing offer.

But at nearly $170 million, the cost of repayment over 30 years would be $20 million higher than the Veolia deal, a city analysis showed.

Cliff Finley, the city's project manager, said PERC is taking all the risk and wants the rewards.

"It's known and you sign it and you're done," he said. "That's a good thing, but who is to say that 15 years from now, the city may want to refinance the loan."

PERC President Brian Cullen said the city analysis was flawed. He said the company's investors are open to alternative financing in the future, contrary to the conclusions of the report.

"There is definitely flexibility without a doubt," he said.

When the new plant is operating, wastewater will no longer go into the river.

Officials say the wastewater will be highly treated, then percolated through the ground to recharge the water supply in the Santa Paula Basin. It may also be recycled for irrigation, City Manager Wally Bobkiewicz said.