Healy and Tramblie have right idea

To The Eagle:  

The mayor says the Island is using 45% of the water produced by the town but paying only 18.3% of the revenue, advances the case that the Islanders are being unfairly subsidized by the mainlanders and states that the town is losing fifty cents per hundred cubic feet on the water they sell the Island. There are some tee-tiny problems with these figures. In 2012 the town sold 4.6 million cubic feet of water in town and outlying areas for which they received $68K. They sold the same amount, 4.6 million cubes, to Puget Island at wholesale rate for which they were paid $86K. On my abacus that comes out 50% of the water sold for 55% of the revenue. This is wholesale?

To make the Town looking like a victim and get the Island's share of the revenue down in the 18% range, they added $345,000 received from meter fees, late fees, and utility taxes bringing their total revenue to a cool half million. Problem with this is the PUD has their own meters and lines, and their own "basic charge" to cover maintenance and operation. Mixing these two types of revenue in the calculations is like the old elementary school aphorism about comparing apples and oranges. You might even say it muddies the water (pardon the pun).

The 45% of water produced figure is off the mark, too. The contract calls for determining this percentage by dividing water metered at the bridge (4.6 million in 2012) by total water produced metered at the plant (14.8 million in 2012) which comes out to 31%. This is an important number, because it determines the share of production, distribution, depreciation, and labor that the PUD pays. The Town also wants the Island to pay for a share of the lost water on the mainland side of the bridge. The Island has its own leakage and loss problems, out of water they have already paid the town for. The PUD has gotten its losses down to around 7%, while the Town's hovers around the 3 million cubic foot mark. They've offered to help the town control their losses, but paying for them seems a bit much. And, they want the PUD to pay a share of debt service (interest). A letter to the PUD from a consultant in 1996 explains that paying depreciation and interest on the same item constitutes a double payment, but paying one or the other would be permissible, and cautions the PUD to understand exactly what they are getting into -- advice that still plays well today.

Normal negotiating procedures would be to appoint a team from each side, comprised mostly of technical experts (managers) and lawyers who would haggle out a tentative agreement behind closed doors which would then be presented at public meetings of both groups. Though they started down this path 20 months ago, it has degenerated into the Town compiling wish lists which they want put on the PUD agenda as action items, which the PUD is understandably reluctant to do, thus turning it into what our editor has termed a "spectator sport." The town then threatens to vacate a contract 24 years down the road, makes doomsday speculations about what the Health Department might or might not do, and how much the Island will have to spend for water sources and treatment plants. What we've heard from the PUD, specifically Commissioner Gene Healy and Manager Dave Tramblie is a plea for some concrete information per the contract, and Town representatives willing to discuss and negotiate. They, I think, have the right idea.

Howard Brawn, Puget Island