EPHRATA - After almost five years of litigation, Grant County PUD officials and representatives of three organizations representing leaseholders on Crescent Bar Island have reached a tentative settlement.

Jeff Grizzel, the PUD's natural resources director, outlined the terms of a "Memorandum of Understanding" at the regular commission meeting Tuesday, March 24.

But the settlement still must be approved by the commissioners and the associations representing the leaseholders, Grizzel said. The memorandum will be the basis of a more detailed agreement that must also be approved by the Federal Energy Regulatory Commission.

Later, Grizzel said he didn't know if the leaseholder organizations would approve the agreement. A letter from the negotiators for the leaseholders was read during the meeting.

"While some may question the results initially, we are confident they will understand the overall agreement is fair and practical," the letter said. It was signed by Jim Kelly, Gary Penitsch and Randy Hoefer.

The settlement would include a new lease, allowing the condominiums and RV parks to remain, Grizzel said. That adds up to about 38.5 acres, he said.

Until it expired in 2012, the leaseholders had a lease for the whole island, which includes a golf course and a boat launch along the shore, a total of about 194 acres.

The new lease would expire in 2052, the same time as the PUD's license to operate Priest Rapids and Wanapum dams, Grizzel said. The PUD would have the right to terminate the lease in 2047 or anytime after that, he said. Utility district officials would have to give the leaseholders at least five years notice if they decided to terminate, Grizzel said.

The existing boat launch and the golf course would revert to PUD management, he said. The PUD also would take over management of about 35 acres of undeveloped land at the end of the island.

The associations must approve the agreement before commissioners will sign it. The commissioners are slated to vote at their April 14 meeting.

The more detailed agreement would be filed with the U.S. District Court in Spokane and the Ninth Circuit Court of Appeals, Grizzel said. Lawsuits filed by the leaseholders are pending before both courts.

Commissioner Dale Walker asked what would happen if FERC didn't approve, or added more conditions. He asked if the leaseholders could revive the lawsuit, or file a different one.

Grizzel said he didn't know if the FERC would approve it, but he was "pretty optimistic" it would. But if the FERC turns it down, he said he didn't know what the reaction would be.

Commissioner Tom Flint said the case has been discussed with FERC representatives by commissioners and the leaseholders' negotiators. He said he got the impression the settlement would meet with FERC approval.

Commissioner Larry Schaapman, who spoke with the FERC, said he didn't think a rejection by the FERC would be the basis for a revived (or new) lawsuit.

Grizzel said he anticipated filing papers asking for dismissal of the lawsuits sometime in May. The current timeline anticipates the agreement would be submitted to FERC before the end of the year, but he didn't know how long it would take FERC to respond..

The agreement would require upgrades to the existing wastewater treatment systems, with the leaseholders paying 90 percent of the cost and the PUD the remaining 10 percent. The leaseholders would be required to upgrade the firefighting systems.

Leaseholders would pay rent based on fair market value going forward, and would be required to pay back rent to 2012. Rental payments would be adjusted annually.

Development of more recreational facilities on the riverbank could begin as early as this fall, Grizzel said. The current plan calls for a new boat launch, more room for day use, more swimming beaches and a walking trail.

Grizzel displayed two options for development on the island. Both add a boat launch, a place to moor boats, a campground, swimming beaches and a walking trail. One retains the golf course, the other doesn't.