EXHIBIT 10.4I



                              September 18, 1998



Mr. Peter J. Moerbeek
Vice President and Chief Financial Officer
Southwest Water Company
225 North Barranca Avenue, Suite 200
West Covina, California 91791
 

               Re: Amended and Restated Credit Agreement
                   -------------------------------------

Dear Mr. Moerbeek:

          Reference is hereby made to that certain Amended and Restated Credit
Agreement dated as of December 23, 1997 (the "Credit Agreement") between
                                              ----------------          
Southwest Water Company, a Delaware corporation ("Borrower"), and Wells Fargo
                                                  --------                   
Bank, National Association ("Bank").  Pursuant to Section 6.02(h) of the Credit
                             ----                                              
Agreement, Borrower has asked that Bank consent to an advance by Borrower to the
City of Sunland Park, New Mexico ("Sunland Park") in an amount not to exceed One
                                   ------------                                 
Million Eight Hundred Thousand Dollars ($1,800,000).  Bank hereby consents to
such advance, provided, however (a) no Event of Default has occurred and is
              --------  -------                                            
continuing, (b)such advance shall not exceed One Million Eight Hundred Thousand
Dollars ($1,800,000), (c) Sunland Park shall enter into a management agreement
with ECO Resources, Inc., a subsidiary of Borrower, (the "ECO - Sunland Park
                                                         -------------------
Agreement") and (d) Borrower agrees to immediately notify Bank of any payment
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defaults by Sunland Park under the ECO - Sunland Park Agreement.

          The foregoing consent is not a continuing consent, and Bank does not
hereby amend the various terms and provisions of the Credit Agreement and shall
be free to exercise any and all of its various rights and remedies under the
Credit Agreement upon the conditions set forth therein.

 
Southwest Water Company
September 18, 1998
Page 2 of 2


          Please indicate your agreement with the foregoing by signing in the
space provided below.

 

Very Truly Yours,

WELLS FARGO BANK,
NATIONAL ASSOCIATION


/s/ RANDALL J. REPP
- - -------------------
Randall J. Repp
Vice President



ACKNOWLEDGED AND AGREED:

SOUTHWEST WATER COMPANY,
A DELAWARE CORPORATION


/s/ PETER J. MOERBEEK
- - ---------------------
Peter J. Moerbeek
Vice President and Chief Financial Officer


/s/ STEPHEN J. MUZI
- - ---------------------
Stephen J. Muzi
Corporate Controller