City Councilor Questions Whether Purchase of Mountain Water is Worth the Risk

At a Missoula City Council meeting on Wednesday, February 12, council members and the public heard about the financial numbers involved in the purchase of the Mountain Water Company.

One council member, Ward Two's Adam Hertz, wonders if the financial risk is worth the reward of city ownership of its own water system.

"During the meeting, we talked about how a condemnation proceeding might move forward, what the risks are and what the expenses could be," Hertz said. "What still concerns me moving forward is the possibility of condemnation."

During the meeting, a figure of $800,000 was mentioned as a possible cost to the city, should the court action to condemn the water company fail.

"The mayor's estimate was up to $800,000," Hertz said. "Certainly, at any time, they could decide that the city was too far into the process and cap it at $800,000, although I do think there's a possibility for that figure to be much, much higher, particularly if the case goes to the Montana Supreme Court or potentially, even farther than that. Surely, $800,000 is a scary number, but I personally believe the number could be much higher that that."

Hertz said he's also uncomfortable with the bonds that would be used to finance the project.

"It looks like the city could probably bond the purchase and make it work out, however, it was disconcerting to me that the bonds did not have a very strong rating, meaning that it's a risky proposition," Hertz said. "I was glad, though, to see some concrete numbers and it made me a little more comfortable in the event that there was a successful agreement, although I'm still extremely uncomfortable with the idea of attempting any kind of condemnation."

There is no definite timeline as to when the city would go to district court to begin the process of condemnation, in case the Carlyle Group, which has already turned down the city's initial $50 million offer, may reconsider in the near future.