Kalispell and the Evergreen Water and Sewer District are working out a new sewage treatment agreement, well before the existing one is set to expire in 2015.

"It's been an amicable discussion, very positive. I think we're on a good track," Kalispell Public Works Director Bill Shaw said about the negotiations.

Evergreen maintains its own sewage-collection system, with a single pipe running to Kalispell's treatment plant.

It's one of Kalispell's biggest customers and last year piped in about 182 million gallons of sewage. That was about 16 percent of all the sewage the city treated.

"They're one of the only large customers we can meter. The others we can only meter through their water use," Shaw said.

This fiscal year, the existing agreement has Kalispell charging Evergreen $1.54 per 1,000 gallons to treat its sewage.

That's compared to the $4.19 per 1,000 gallons Kalispell residents are paying - a total rate that includes both collection and treatment charges and is on track to increase again to $4.83 in 2013.

Evergreen's treatment charges vary based on its sewage flows. The existing agreement limits the district to a capacity of no more than 682,000 gallons a day.

"They've been running at about 500,000 [gallons a day] for a number of years," Shaw said.

Evergreen's rate for this year is based on 16 percent of the annual operating costs at Kalispell's sewage treatment plant. It also pays for 16 percent of the capital improvement costs and 12 percent, or about $150,000 a year, of debt-service costs.

Allocating and agreeing on all those costs can be a lot for the two parties to work through.

"There seemed to be some presumption, the perception that [the contract] fell behind the times. But we're not really finding that to be the case. Maybe some, but for the most part it isn't that far off," Shaw said.

A RECENT $21 million expansion of Kalispell's treatment plant left the city with lots of excess treatment capacity because projected growth failed to materialize.

That also complicates the picture somewhat when it comes to divvying up those costs and negotiating a new agreement.

"There is some minor discrepancy, some areas that could be tweaked, but it's not terribly significant," Shaw said of the existing agreement.

Following recent discussions, Kalispell city officials have said they plan to meet again with Evergreen in March.

"It was much more contentious years ago. So I really foresee a worthwhile agreement will come out of this fairly soon," council member Jim Atkinson said at the Jan. 23 council meeting.

Jack Fallon, board president of the Evergreen Water and Sewer District, agreed that the negotiations are going well.

"We're looking at making sure that we're sharing in costs related to the treatment plant only and that we're sharing in those costs fairly," Fallon said.

"For the last 20 years that's been represented as being the case, so we're just double-checking numbers and the approaches that will be taken so what we experienced in the past will continue to be our experience going forward."

ANOTHER COMPONENT of negotiations is making sure Evergreen has access to adequate capacity to connect new customers to its system and accommodate growth on existing properties in the district that are undeveloped or under-developed.

Evergreen's annual flows have crept up over the last three or four years. Part of that has been because of flooding and high water and inflow and infiltration issues with the collection system, Fallon said.

"We are hitting $400,000 [a year] and the new contract may mean we're having to pay $450,000 to $500,000 a year," he said of the amount being paid to Kalispell.

That could mean higher sewer rates on the horizon for people in Evergreen.

But those rate increases would be nothing compared to what could have happened if Evergreen had moved ahead with the construction of a sewage treatment plant, as was explored over the past seven to eight years.

"In hindsight, maybe we were lucky we couldn't go forward with it," Fallon said of the proposed treatment plant.

"Kalispell expanded and they're not getting the flows they projected ... Instead of two white elephants, that just means Evergreen is better off participating with Kalispell and the white elephant they have over there, versus having its own."

Reporter Tom Lotshaw may be reached at 758-4483 or by email at tlotshaw@dailyinterlake.com.