CANTON — The Cherokee County Water and Sewerage Authority approved a memorandum of understanding with the city of Canton during its meeting on Monday.

The memo stipulates the city will formally resume talks about a possible merger with the Cherokee County Water and Seweage Authority.

Under a proposed merger, CCWSA would take over operations of the city’s water and wastewater treatment plant and provide water and sewer capacity to the city.

However, Canton would maintain control over its collection and distribution system and maintain control over water and sewer billing.

The memo also includes the city entering the discussion phase with the Cobb County-Marietta Water Authority with regards to selling a portion of its stake in the Hickory Log Creek Reservoir.

The proposal would allow CCMWA to take over operations of the reservoir, have access to 5.25 million gallons of water at the reservoir and assume Canton’s $28 million debt for its share of the project.

CCMWA would allow Canton to have access to six million gallons of water per day of reservoir capacity if needed in the future, according to the preliminary proposal.

The reservoir would also remain as a recreational facility as outlined in the original Reservoir Management Plan.

Leaders of the Cobb authority have indicated they will consider buying out Canton’s share of the reservoir.

The authority also elected Nancy Martin, a former director with Marietta Board of Lights and Water, as its chairwoman, County Chairman Buzz Ahrens as its vice chair, and Steven Woodruff as its secretary.

It also approved its fiscal year 2012 budget, which includes $43 million in projected revenues, $43 million in projected expenditures and $5.8 million available for capital expenses.

The budget does not include increases in water and sewer rates for customers.