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

The council voted unanimously to cease all negotiations to outsource management to the Kitsap Public Utility District. But the matter took a back seat to a heated argument over the aptitude of the council, its treatment of its city manager.

Some called it a crisis.

“Why did we hire (City Manager Doug Schulze)? Why would we have a professional manager if we are not going to ask his input?” asked Councilwoman Kirsten Hytopoulos.

She directed her questions toward Mayor Steve Bonkowski, who had bypassed the city manager and the contract to put forth his own work on the issue.

“If you have such low satisfaction with him that you think you can usurp his job, then we have an incredible crisis in this city,” Hytopoulos said.

Heated remarks flowed from the dais throughout the meeting. The utility discussion drew out criticisms of fellow council members and the city manager.

“With regards to how this meeting has gone, your attacks set the tone,” said Councilwoman Sarah Blossom, pointing to Hytopoulos.

The back-and-forth over the water utility steadily continued through the meeting, only stopping once when council members spilled a pitcher of water on the dais.

Offshoring the city’s water system has been a source of community debates for the past three years. The matter was expected to come to a head once again Wednesday as the council discussed a contract to outsource its management.

Schulze weighed in late last week, advising the council to reject the contract with KPUD.

The downsides: it was too costly, conflicted with the city’s comprehensive plan and would lead to a fight with the city’s union over collective bargaining issues.

In doing so, Schulze was in conflict with some on the council who have championed a hardline fight to offshore management of the city’s water system.

But Schulze was silent during Wednesday’s meeting.

Instead of discussing the contract as planned, Bonkowksi moved right past it — and the city manager — and took the council in an entirely new direction.

Bonkowksi, and fellow councilman David Ward, criticized the city manager for failing to provide them hard numbers on costs to the city on the contract.

“And he failed to do that. He failed to provide what the overall cost of the water utility,” Bonkowski said. “He didn’t include anything to do with the city’s cost to manage that (contract).”

“Frankly, that’s the reason I ignored it,” he said of the proposed contract on the council’s agenda. “It’s not actionable.”

Bonkowski made a presentation showing his own analysis of the water utility and the city’s finances based on “actuals” he found digging through past expenditures.

“My presentation was to basically say I want to move forward and provide lower rates to our ratepayers,” he said. “We have spent four long years trying to find a way to get there. Here is the city’s own data with a couple policy changes.”

Abandoning his aims to outsource its management, Bonkowski instead offered alterations to the utility at the city.

He then moved past the proposed KPUD contract and 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.

The motions, however, were put on hold. The council will discuss them at its June 19 meeting.

Bonkowski and Schulze will meet in the interim to go over the councilman’s new ideas.

The surprise switch in direction drew heated remarks from others on the council who were expecting to discuss a contract. Some said they were blindsided and complained the new proposals were being rammed through.

“Why don’t you just vote on it right now?” said Councilman Bob Scales.

“We don’t need to wait until the next meeting, we don’t need more presentations, (because) Steve can do the work of the city manager and the staff,” he added. “We can cut the staff, we can allocate utility functions to each council member. What a saving we could have,” Scales said sarcastically.

“That’s where we are now,” Scales continued. “It’s embarrassing. I feel bad, certainly for the city manager and our staff.”

Scales also countered what he called “conspiracy allegations” that had been made by other council members against city management and staff. He said Bonkowski was accusing them of “hiding the ball.”

But opposition on the dais remained undeterred.

“I agree we have a crisis,” Ward said, further criticizing the city manager’s analysis of the KPUD contract.

“I want to know why we were presented with a water budget that didn’t reflect the previous years’ actual expenditures,” he said.

Soon, the heated debate moved off the dais and into the council chambers. Several in the audience pointed out the shoddy treatment of the new city manager by some on the council.

“I am absolutely appalled by the mayor’s lack of understanding of state law and legal process, and the council-manager form of government,” said Dan Mallove.

“It’s absolutely appalling to treat your city manger, who you hand-selected and approved, to treat him like this in public and not give him an opportunity to respond to those attacks,” Mallove said.

But there was division among the audience, as well.

Dee Dumont said that the city manager placed the city’s union above the needs of ratepayers when he opposed the contract with KPUD.

Randall Samstag, a former member of the city’s Utility Advisory Committee and a frequent critic of offshoring the water utility, said he liked much of what Bonkowksi had suggested.

“I appreciate that Mayor Bonkowski has brought this forward,” he said. “It’s been brought forward in an inappropriate manner.”

Dick Allen, a member of the Ratepayers Alliance, referenced history of the utility’s controversies and said that despite his approval of utility employees, the city is still dishonest.

“Somebody’s got to bring this city to heel, they got to get honest,” Allen said to Schulze. “And if you aren’t the guy to do it, you ought to pack your bags and get out.”

Schulze remained silent throughout the meeting, only speaking once to say that he would meet with Bonkowski to go over his analysis.

He declined to say if he had been warned by Bonkowski about his presentation before the meeting.

“We’re going to move forward positively,” Schulze said after the meeting.

“It’s a new direction in terms of the motions that were made,” he said. “(The council) was pursuing the (contract), and now we are looking at other ideas. It’s not entirely inconsistent with my first presentation where I suggested that the first thing we need to do is look at our cost allocation, and address that first,” Schulze said.