Even with all of the planning, however, the trouble was not over. The construction was moving steadily ahead, and September 1, 1940, had been set as a new date by which the project was to be completed. An important action was taken at the March 11, 1940, City Commission meeting, when a resolution was placed on first reading inviting the company to meet with the city officials to plan distribution of the water from the Equus Beds. The provision in the franchise required the company to distribute the new source, but the details still had to be negotiated. City and company officials agreed on a date, and at the following commission meeting a resolution passed setting the date on April 15, 1940.

On April 15, conflicts arose almost immediately when the two sides sat down to the bargaining table. According to the Eagle, the company officials informed the commission that "no rate saving to the public could be effected by the city delivering their water supply on basis of a two-year contract, but were of the opinion that a renewal of their franchise, which expires in 1942, might bring lower rates." (Eagle, 4/16/40). Clearly, the Water Company was attempting to bring pressure on the commission to extend the franchise by expounding higher rates. But the commissioners were not yet prepared to discuss a new franchise. Two and a half hours of heated debate took place, but the only concrete result was that the commission voted to refer the development of a contract and the setting of a surcharge rate to City Manager MacDonald and City Attorney Vincent Hiebsch.

The proposed surcharge was to be collected by the Water Company for the city's use in retiring the water bonds and for the costs of operating the production plants. Figures from ten percent to 30 percent were discussed, with a ten percent to 15 percent increase seen as the likely figure. Biggs, who was in Wichita for the meeting, estimated it would cost his firm an additional $2,600 a year to distribute the water as compared to the old supply, but said that with a new franchise they were "willing to take the $2,600 loss a year to deliver your water as well as spend $190,000 for improvements, with present rates." (Eagle, 4/16/40).

The talks focused on many issues, such as whether the soft water project was the "first step toward municipal ownership" and whether the company had been expected to distribute the soft water at the same cost. Evans, speaking for the company, argued that no conversation had been held to that effect and that the only way a savings could result would be by refinancing the company's indebtedness and with a new franchise. MacDonald reacted strongly to the company's pressures. "It amazes me," he said, "that you can't give us credit, when we pay the expense that you formerly paid in producing the water." The company officials responded by saying that one of the main items of additional cost facing the firm would be auxiliary mains to the north end of town, where two wells were used during peak consumption. But the manager wasn't convinced. He argued that the water in those wells wasn't fit for use, and he declared that the company seldom used them anyway. In referring to the Park Department's consumption of water in that area, he asserted, "I know exactly what you have up there, I've been fighting it for 17 years." (Eagle, 4/16/40).

Following the debate, the commission decided to have the city manager and the city attorney draw up a contract with company officials, the specifics of which could then be analyzed. Action on the issue was postponed until a tentative contract was developed. In compliance with the request of the City Commission, officials from both parties met again on June 12, 1940, to draw up terms of the contract. During the first day no agreement was reached and the meeting continued into the second.

The city officials were pushing for a contract not to exceed two years, which would allow for a re-evaluation when the franchise ran out in 1942. The company, of course, was still opposed to such an action. The commission had approved the plan whereby the city would operate the production including the wells, pipeline maintenance, and the filter plant. The company would then distribute water delivered to its reservoir at the waterworks plant. Section 7 of the franchise spelled out the responsibility and the requirement of the company to follow through in the plan, but the specifics had yet to be agreed on.

Geehan released a press statement following the conference which read, "In operating the new water supply the city of Wichita estimates that the annual cost of operation, including interest and retirement of bonds, is approximately $125,000. A 15 percent surcharge on water bills will produce approximately $90,000 a year, leaving $35,000 to be raised from some other source. The Water Company estimates that its annual savings in operating expenses because of the new supply will be $7,300, the amount the Water Company has agreed to pay to the city. There is no controversy as to this amount of savings. Subtracting $7,300 from the $35,000 leaves a deficiency of approximately $28,000 a year.

"The Water Company and city representatives, in discussing this deficiency, explored ways by which it might be raised. It was suggested that if an acceptable new franchise was granted by the city, effective by September 1, 1941, the Water Company would pay to the city an additional amount over and above $7,300 of $28,000 a year, making a total of $35,000 paid by the Water Company in the 12 month period ending September 1, 1941. This would permit the city to break even without resorting to additional taxes or increasing the surcharges above 15 percent in the event a satisfactory franchise agreement can be reached within the next year." (Eagle, 6/15/40).

MacDonald once again reported the failure to the commission. The company had presented four alternatives for solving the conflicts, but none were acceptable to the city manager. The first called for the city to immediately buy the company's property. The second stated a new franchise would immediately be granted. The third stated an agreement would be entered into whereby the city would produce the water and the company distribute it as called for in the existing franchise. The company would pay the city $7,376 per year, representing the savings to the company for not having to produce the water. Finally, the fourth proposal was outlined in Geehan's statement to the press. MacDonald refused all of the options, insisting that the company pay the city the $35,000 regardless of the new franchise, and claimed he had no authority to discuss the plant's purchase. He also argued that the $35,000 would only reduce the 6.8 percent earnings of the company by one half of one percent, a small amount when considering the excellent earnings under the existing franchise.

While the political and administrative controversies had not yet been solved, the construction of the soft water project neared completion. All of the units of the system were nearly complete by July 7, 1940, according to the Beacon, except for the filter plant which required an additional four weeks. Following this, another few weeks would be necessary to test the pipes throughout the city. Unfortunately, no agreement had been reached on the Water Company contract and no one knew for sure what would happen once the work was finished. The Beacon reported, "Soft water will be running into homes of Wichita by September 1, and probably before that time, if the city and the Wichita Water Company officials can get together on the amount the Water Company is to pay the city for furnishing the water." That was easier said than done.

Negotiations continued to fail between the two camps. On June 29, the City Commission again debated the subject at length, without the Water Company officials participating. While the company claimed it would save $7,376 annually by using city-produced water rather than its own, auditors employed by the city quoted a figure of $7,849. A motion was made by Commissioner J.S. Crawford to make the auditor's sum the amount named in the proposed contract. Commissioner Israel moved to amend that figure to $35,000. Debate demonstrated that some commissioners felt the company should pay the $35,000 while others supported additional negotiations. The amendment failed, and the original motion passed with the vote being Crawford, Coleman, and Dotson for and Israel and Corn against. Following further debate the commission agreed to have MacDonald negotiate with the Water Company officials in an attempt to agree on the $35,000, at least for the first year. The company had the leverage, however. The city needed an agreement quickly, but the company did not. After the final attempt at reconciliation, the city settled on the company demands, allowing payment of the original estimate of $7,376 in a short-term contract, but with no franchise extension.