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Falls City examining contract with LDWC

FALLS CITY -- The city of Falls City has hired an attorney to assist with research and negotiations on a contract the city has to sell water to Luckiamute Domestic Water Cooperative (LDWC).

December 26, 2012

FALLS CITY -- The city of Falls City has hired an attorney to assist with research and negotiations on a contract the city has to sell water to Luckiamute Domestic Water Cooperative (LDWC).

LDWC is a nonprofit utility that has been purchasing water from the city since May 2003, when a 20-year contract was established.

The cooperative serves a little more than 1,000 connections in Polk County. Danny Jaffer, LDWC's board president, said 20 to 25 percent of them are dependent on the water from Falls City.

The contract stipulates that LDWC can purchase as much as 5 million gallons per month of treated, drinkable water from the city. The LDWC's remaining customers are served by wells located south of Independence.

Now, nearly halfway through the contract, LDWC approached the city about an extension, perhaps longer than the current contract, and possibly having access to more water.

However, negotiations have stalled.

"Essentially, it looked like the length of the contract would have been difficult for us and our ability to provide more water would be an issue, too," said Falls City Administrator Amber Mathiesen.

Also of concern was a change made to the contract after the city council voted to approve it in 2003. Mathiesen said the change related to annual rate increases and may have restricted the city in what it can charge LDWC.

"The change in the contract may not have been legally authorized by the council," Mathiesen said.

The contract was approved by the council on May 5, 2003, and the subsequent change was hand written on the contract and approved by then-Falls City mayor Ginger Lindekugel and LDWC president Howard Pope.

Mathiesen said the city decided it needed a lawyer to look into those issues.

On Dec. 13, Falls City hired Ross Williamson, an attorney with Local Government Law Group, a division of Eugene's Speer Hoyt law firm, to provide legal advise on the contract. Lane Shetterly, the city attorney, has declared a conflict of interest.

Mathiesen said the city and Williamson are in the process of researching the contract and she isn't sure when negotiations will resume.

"It will depend on the attorney's research whether we negotiate further or if some other solution could be applied," Mathiesen said.

Jaffer said in a recent interview that he hopes to continue negotiations after the first of the year.

He said in the event contract details could not be worked out, the cooperative could build infrastructure to serve customers in the Falls City area.

Jaffer added, however, LDWC would like to avoid having to do that, as it would require pumping water from wells uphill to the homes now served with water purchased from Falls City.