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Salt Lake City's water supply could be jeopardized if developers are allowed to build a proposed ski resort on 2,100 acres in Parleys Canyon, according to a report by city officials.

A public utilities subcommittee spent one month studying the proposed resort, known as Utah Summit, before concluding it could threaten the largest drainage area in the Wasatch canyons.But Christopher McCandless, spokesman for the group that wants to develop the resort, said Friday he wants to give city officials a counterproposal.

"I don't think this is a deathblow. We're changing our plans to accommodate the serious questions," he said. "We want to analyze each section of the report and come up with a solution."

The resort would eventually include a hotel, condominium villages, single-family houses and a water company, according to a written plan. The resort would relieve traffic problems in Big and Little Cottonwood canyons and would be closer to an international airport than any other ski resort in the nation, the plan said.

But much of the land is important to the city's water needs and is located in the middle of a proposed land trade between the U.S. Forest Service and the city. The city owns 640 acres in the proposed site.

The report by city water officials questions whether a resort in Parleys Canyon would relieve traffic in other canyons. The plan also would jeopardize the city's watershed plan, which recently was approved by the City Council, and would violate a congressional act that protects the city's water supply, the report said.

"It would be contrary to the intent of Congress, and the will of Salt Lake City, to alienate . . . 640 acres of prime watershed land for private residential development," the report said.

City officials also said the proposed site may be in an area where soil shifts during wet years, making construction difficult.

The city's Public Utilities Advisory Committee will consider the recommendations at its next meetings. If committee members vote to accept the findings, McCandless could appeal to the mayor and city council.

But officials close to Mayor Palmer DePaulis say they think it is unlikely he would reject a recommendation from the committee, especially when it concerns the city's watershed plan.

The proposed resort would be off I-80 near the summit of Parleys Canyon. It would be surrounded by ski lifts, stores, rental shops, restaurants and a medical center, said the proposal.

McCandless said last month the resort would be financed by British investors.

The skiing area would encompass 1,790 acres and would handle 7,912 skiers daily. The developers wanted to finish the first phase of the resort by the fall of 1993.