Councilwoman Blossom asked to step aside on utility vote after 'conflict of interest' complaint by former Bainbridge councilman

A former Bainbridge Island city councilman is asking a current councilwoman to step aside on any votes to offshore the city's water utility.

The Bainbridge council has been considering the outsourcing of the city's water utility to the Kitsap Public Utility District. The council was scheduled to talk about a potential contract with the utility at its meeting Wednesday.

Late Tuesday, former councilman Barry Peters sent a letter to Councilwoman Sarah Blossom, the council and city administration, and local media to ask that she recuse herself from any votes on the utility.

Peters said noted that Blossom's mother, and perhaps other family members, own South Bainbridge Water System, Inc.

Peters said Blossom had "a significant conflict of interest" because a sale of the family's utility to KPUD would net them more than $1 million.

Blossom did not return a call from the Review early Wednesday. In her current "Conflict of Interest Disclosure" form on file with the city, she noted she was an employee of South Bainbridge Water System, Inc.

South Bainbridge Water System, Inc. serves 1,211 customers on Bainbridge Island, according to the Washington Utilities and Transportation Commission.

Peters recalled the sale of another privately-run water system on the island, the North Bainbridge Water System, which was purchased by the Kitsap Public Utility District for approximately $2 million in 2002.

"If your family were to ever want to cash out its ownership of its water company, KPUD is the most obvious potential purchaser, because it is the publicly chartered water district serving Kitsap County, and because, over the years of its existence, it has acquired dozens of formerly private water systems in Kitsap County – including on Bainbridge Island," Peters told Blossom.

"If the KPUD were to purchase your family’s water company at the same price per customer (about $1,000 per connection) as KPUD paid to the owners of North Bainbridge water in 2002, your family would potentially receive more than $1 million from KPUD for that personal property – that is, their water company,"  Peters continued.

"It is my understanding that KPUD is chartered to respond to requests, and to acquire certain water systems, when petitioned to do so. For example, I believe that KPUD is currently responding to petitions from two Bainbridge water systems – one near Manzanita and the other in Sunset Hills – to acquire those systems," he wrote.

Peters also noted that a council-approved contract with the Kitsap Public Utility District would put the district within reach of the South Bainbridge Water System's service area.

"If the city council were to vote to hire KPUD to manage the city’s water utility, that decision would put KPUD operations into Winslow and Rockaway Beach, at locations quite close to the operating territory of your family’s water business. If such a council vote occurred, I believe that the proximity of KPUD operations to your family water company territory would increase the awareness of KPUD by your family’s customers, perhaps to the point where they might petition the KPUD to consider acquiring your family’s company," Peters wrote. "Whether or not petitioning occurred, KPUD is in any event the most likely purchaser of your family's company if they ever wished to sell. The result of such a KPUD purchase could be a payment to your family in excess of $1 million."

Peters also said the city's Code of Ethics says that elected officials shall not take any direct or indirect actions that benefit themselves or family members. He asked

"To avoid any actual or apparent conflict of interest as defined by the city’s ethics code, I ask that you recuse yourself from any city council vote pertaining to KPUD," Peters wrote.

Peters served on the city council through 2011 and lost in a re-election bid to current councilman and Mayor Steve Bonkowski.

Peters could not be reached early Wednesday for additional comment.


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