Town officials feel the contract doesn't include costs for system expansion and water loss, and PUD officials haven't agreed to pick up a share of those costs, which, in the future, would include upgrades to the water plant's raw water intake and the implementation of a second source of water for the town's water system.
At their meeting in July, council members agreed that if the PUD wouldn't pick up some of the costs, they would consider notifying the PUD that they wouldn't renew the contract when it expires in 2037, meaning the PUD would have to find its own source of water for the Island. And on Monday, the council gave initial approval to an ordinance stating the contract wouldn't be renewed. The ordinance will be considered again at the council's October meeting.
The proposal was conveyed to Wahkiakum PUD on Tuesday morning, arriving after the PUD board of commissioners' regular meeting, Mayor George Wehrfritz said.
"Our aim is to modify the current calculation method used to determine the bulk water rate paid by the PUD for the Puget Island Water System (PIWS) in a manner that shares actual costs more fairly and allows the town to embark on needed upgrades to its water system," Wehrfritz wrote in his announcement of the proposal.
The proposal has two components, Wehrfritz said:
1. "Sharing of financial costs on capital projects. On debt-funded improvements benefitting the PIWS, annual interest payments would be shared based on PIWS usage as a percentage of total volume of water sold by the town over the billing period," the proposal says, and that percentage was 44.93 percent from July, 2012, through June, 2013. "On future capital improvements, the town would welcome the PUD to pay its percentage of the total project costs in full to avoid interest payments.
2. Ten percent loss sharing: "Given that loss (of water in mains--editor) is an actual cost of production, some loss sharing is appropriate if we are to maintain the ‘cost plus 10 percent' structure of the current contract. The town believes that a 10 percent loss factor is a fair compromise."
The proposal also allows for renegotiation at five-year intervals.
The council also feels growth of demand in the PIWS needs to be considred and should be studied when the pact is revisited in 2017.
PUD Commissioners Bob Jungers and Gene Healy visited the council meeting Monday night and briefly discussed water issues.
Jungers presented his analysis of town water consumption and revenues, concluding that 55.9 percent of the town's revenue from water sales comes from the Island system.
Council members had received the paper just before the meeting and hadn't had a chance to study it.
Jungers left the meeting after offering to answer council members' questions about the figures.
Town officials provided data that showed that the island system consumes 44.9 percent of the town's water and pays 18.2 percent of the revenue.