Iola City Council members will decide Monday whether to stop selling water to Gas.
City Administrator Sid Fleming is of the mind the Council should do just that, in an attempt to draw Gas back to the bargaining table, according to information he has provided prior to the upcoming Council meeting.
The issue stems from the cities’ water purchase agreement ratified in 2001.
The agreement carries a 30-year term, and limits Iola to being able to raise its rates for Gas six times over that stretch.
Because of increased costs related to water production — including construction of a new water plant — Iola exhausted those six hikes.
Four of those increases have been since 2011 as Iola has struggled to balance its water fund (the fund was operated at a loss the four years prior to 2011.)
Gas City Council members have thus far resisted Iola’s attempts at a seventh water rate hike, of 3 percent, which was approved by the Iola Council in April.
Attempts to renegotiate the contract, likewise, have been fruitless, Fleming said.
That leaves Iola only one option to end the stalemate, Fleming said: to give Gas a two-year notice of its intention to terminate the contract. Retaining the 2015 water rate equates to Iola subsidizing Gas’ water, he said.
“Termination should be pursued to ensure the agreement does not automatically renew under the existing language,” Fleming wrote to Iola Council members. “It would be the intention of staff to seek a renegotiated contract. … The City of Gas is a good customer, but the City of Iola cannot afford to be in an agreement that allows only six price increases over the 30-year term.”
OTHER items to be discussed Monday include a proposal to move up Iola Municipal Court sessions from 5 p.m. to 3 p.m. Wednesdays; proposed demolition of a house at 311 S. Chestnut St.; year-end budget amendments; and bids for a front-end loader for the Street and Alley Department.
The 6 p.m. meeting will be at the New Community Building at Riverside Park and is open to the public.
