The Bainbridge Island City Council rejected a proposed contract to outsource the management of the city’s water system Wednesday.

The council voted to cease all negotiations to outsource management to the Kitsap Public Utility District.

Offshoring the city’s water system has been the source of community debates for three years now, but it took a back seat to an unexpected development at Wednesday’s council meeting.

Mayor Steve Bonkowksi moved right past the proposed KPUD contract and instead offered six motions that would change the structure of the city’s water utility, with proposals to cut water rates by 35 percent, return $3 million to ratepayers from the utility’s reserve account, and establish a policy that the water system be managed for the benefit of ratepayers.

It was a complete shift in direction in the water utility debate that has consumed the council.

The council voted to discuss Bonkowski’s new motions at its June 19 meeting.

Bonkowski and City Manager Doug Schulze will meet in the interim to discuss the councilman’s new ideas.

The change in direction was a surprising shift for a council that has been on the edge of outsourcing its water utility for months.

A packed council chambers was primed for Schulze’s most definite look yet at a contract with KPUD, but the city manager was never given a chance to speak. Schulze came out last week opposed to the idea.

Instead, Bonkowski unveiled his suggestions at the end of an unscheduled slide show he presented that cast doubt on Schulze’s conclusions about the financial impact of outsourcing of the city’s water utility.