After a sobering report from the state department of health last month, the Orcas Highlands Association will not be proceeding with an Eastsound Sewer and Water District well at this time.

Despite that, the district is hopeful its $90,000 investment will eventually work out for both parties.

“We have an asset, we have a well, we spent money on it, so we have a fiduciary responsibility to look at this asset,” district board president Greg Ayers said. “We have not met the criteria of the memorandum of understanding (crafted by the Highlands and the district), but that doesn’t mean we won’t. At this point in time we have a well, but we have not presented that well to the Highlands Association to say we are ready to supply water.”

As it stands now, the Highlands owns its system and buys water in bulk from Washington Water Services, which is also the utility company for the Rosario neighborhood. It gets all of its water from Cascade Lake.

In February 2008, voters in the Highlands approved annexation to the Eastsound Sewer and Water District (ESWD). One of the homeowners’ goals was to discontinue their contract with Washington Water, a for-profit company whose rates are governed by the state utilities and transportation commission. Instead, the Highlands wanted to have a publicly owned water system with ESWD.

ESWD commissioner Ed Sutton says the Highlands board was initially hoping the district would initiate eminent domain over Washington Water. The district decided that was not the best option, for financial and legal reasons, and instead moved forward with providing an alternate water source.

The memorandum of understanding stated its purpose was to: “…plan for the district’s acquisition of the water system and to authorize the district to explore for a supply of water on certain real property owned by the association.”

Last spring, ESWD dug two wells in the Highlands – the total cost of the project to date is $90,000. The first well was dry, but the second was fruitful. After months of pumping the well and testing it, the board sent the results to Steve Deem with the state department of health for his feedback. He came to Orcas in December to share his take on the project.

Deem outlined two primary concerns with the well: quantity and quality. The nineteen gallons per minute estimate would meet the neighborhood’s needs during most months, but demand in the summer would require significant storage. In addition, because the well water is being influenced by surface water, it would need to undergo chlorination and filtration to be approved by the health department. That means building a treatment plant and hiring an operator, which could drive up the cost of water service to homeowners.

Although the Highlands board has not said a concrete “no” to the entire project, it is has opted not to proceed until more information is known about the potential costs.

“Based on Steve Deem’s comments, we were reluctant to pursue the well, but ESWD did want to work up a cost comparison, and we are willing to consider it,” said Highlands board president Judith Cook. “Before we would ever consider making a change (of water system ownership), all of our homeowners would have to vote on it.”

Ayers says the district is currently not pursuing reimbursement from the Highlands on its investment of $90,000.

“We won’t be requesting them to pay it back at this time – we haven’t received an opinion from counsel if we have the right to do it – or if the district has a desire to,” he said.

The Highlands board maintains it is not responsible for the district’s outlay of cash.

“We were never obligated to pay that back – ESWD came to us with a suggestion that this might be an option,” Cook said. “We agreed to let them to do it. Had it worked, it would have been a wonderful thing. And if it can work, it would be wonderful. But the highlands does not have liability for that.”

District commissioner Sutton feels differently.

“We had a moral understanding that of course the highlands would pay for the costs,” he said. “It’s about $900 per household, and we’d let them pay it back over a few decades.”

Ayers says he is less concerned with “he said, she said,” and instead wants to look ahead to what might be accomplished with the well. A cost analysis is expected to be completed within the next few months.

“We are going to assess how much it might cost to treat that water and deliver it,” Ayers said. “We’re not spending any money developing that well until we have a viable business plan.”