La Cygne approves mediated settlement with two rural water districts, secures cash and long-term water sales

La Cygne officials approved a mediated settlement with Linn County Rural Water District No. 1 and Rural Water District No. 3 that city leaders say will both end litigation and restore predictable water sales. The council voted unanimously to accept the agreement in principle after a joint mediation session with a professional mediator and attorneys for the parties.

Mayor Terry Weitman summarized the result at a regular meeting: "All parties came to an agreement in principle," and the council directed City Attorney Mike Shultz to finalize the written documents for signatures. The settlement includes an up-front cash payment to the city and future commitments by the rural water districts to purchase specified volumes of water for multi-year terms, which city staff say will help stabilize revenues that fell during the dispute.

City Attorney John Sutherland told the council the mediated deal also includes payoff terms for the city's outstanding water-related bonds and a schedule for water purchases that phases up over the next 17 years. He urged councilors to let attorneys finalize contract language; the mayor authorized that step. Council members said the agreement should improve cash flow and allow the city to address deferred maintenance at the water plant and sewer lagoons.

Why this matters: La Cygne’s water utility had seen daily production increase after sales to the districts resumed, but expenses and equipment needs—like a failing turbidity meter and damaged pumps—left the utility financially strained. Officials told the council the settlement puts the city back on firmer footing and creates a predictable purchaser for a portion of the system’s excess supply.

Next steps: City attorney to complete formal settlement documents for ratification; staff to incorporate payments and new revenue assumptions into the utility budget and capital plan.