SANDPOINT - After months of discussion, the city is proposing to settle its $524,220 water dispute with the Syringa Water District.

The district, which serves residents of Dover and areas west of Sandpoint, is in the 39th year of a 40-year contract with Sandpoint to purchase water for its users. In August, the city informed the district's board it owned more than a half million dollars for five years of accrued overage fees.

The hefty bill was the result of a years-long mix-up in the city's finance office. For reasons unknown, the office was not made aware of a 1993 resolution that drastically increased Syringa's overages charges, so the district was not billed the higher rate for nearly 15 years. In July, Treasurer Shannon Sythlearned of the resolution and calculated the association's water usage since 2003, which showed nearly 10.5 million gallons of excess usage.

At $50 per $1,000 gallons of overage, the district's bill swelled to more than a half million dollars, which district board members said they could not and would not pay.

The Public Works Committee unanimously approved a plan Wednesday that would drastically lower the overage charge to approximately $5,500 - roughly one percent of the original amount. If the district agrees to the compromise, each of its nearly 200 users would pay a one-time surcharge of less than $50.

To calculate the new fee, the city disregarded the $50 per 1,000 gallon overage fee and replaced it with the $3.44 per 1,000 gallon fee Sandpoint users pay for excess usage, said Councilwoman Carrie Logan

"I think it's really fair," Logan said of the offer. "If I were a single user and I'd gone over by that much, that's how much I'd have to pay. So I think that's fair."

Logan said she and several staff members met with district board members late last month to inform them of the offer, but the district has yet to officially respond.

The full city council will rule on the proposal at its December meeting