The $356-million contract was cancelled in 2009 after the city's auditor-general uncovered irregularities.
Frank Zampino is already facing several charges in connection with the Faubourg-Contrecoeur housing scandal.
Documents released on Tuesday show that police believe Zampino was the central figure in another alleged fraud, this one involving the water-meter contract.
The key piece of evidence is Zampino's agenda.
It shows during the bidding process in 2007, Zampino had frequent contact with top executives in companies bidding on the project.
Councillors aren't supposed to have any contact with bidders.
Zampino's agenda shows he attended birthday parties, cocktails, hockey games, concerts and golf tournaments with executives from bidding companies.
Zampino was a guest twice on construction boss Tony Accurso's yacht.
Accurso was part of the consortium that eventually won the contract.
Paolo Catania was an executive at another company that bid on the water meter contract.
Zampino's agenda shows he vacationed at the same time as Catania in Miami, Barbados and Casablanca.
Police believe they have grounds to suspect Zampino and five others, including Accurso and Catania, of fraud, conspiracy, corruption and breach of trust.
No charges have been laid in relation to the water-meter contract, and the allegations have yet to be tested in court.Suggest a correction