Rochester Mayor Bob Duffy confirms what many have long suspected: the city and the county are in talks to possibly merge water systems.

"There are a number of issues that I think we have to work out," he says. "Like anything, nothing happens quickly, but we've been talking for some time on it. And nobody has said, 'No, it's not going to happen.'"

The 30-year water-sharing agreement between the city and Monroe County Water Authority officials technically ended in 2008, but both parties agreed to extend the deal a year. And another one-year extension is under discussion. The delay in reaching a long-term accord has fueled speculation that a merger may be pending.

That follows an oft-repeated talking point offered by some Democratic County Legislature candidates this fall, who highlighted the city and Water Authority systems as a potential source for cost-savings or consolidating.

Paul Holahan, commissioner of the city's Department of Environmental Services, said in an interview last week that progress is being made in the discussions between the city and Water Authority. He would not comment on a possible merger, however.

The city and the Water Authority have looked into a few possible arrangements, he said, such as a buy-sell agreement like the one that currently exists - the city and the county buy and sell water to each other - or a Water Authority takeover of the operations at the city's Hemlock plant.

City Council member Carla Palumbo says she expects that the administration will share any proposals that are under serious consideration or discussion with Council, which has to vote on the final agreement.

Looming in the background of all this, however, are the ongoing talks between the city and the state about a state takeover of the Hemlock and Canadice watersheds. The concern is what happens to that land if the state deal isn't completed by the time a possible merger happens.

State budget issues have delayed the takeover, Duffy says.