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Eminent domain attorney analyzes fight over Mountain Water

Published On: Apr 03 2014 05:57:20 PM MDT
Updated On: Apr 03 2014 06:24:22 PM MDT
MISSOULA, Mont. -

We're taking a deeper look at the City of Missoula’s fight to take over Mountain Water Company through Montana’s eminent domain statute.

Mountain Water Company operates the city’s only water supply system, and the company is owned by Carlyle Group, an international private equity firm.

The city filed a complaint Thursday in District Court, claiming that public ownership will "ensure the citizens of Missoula have long-term access to a stable, safe, plentiful, and predictable source of clean water,” but this isn't the first time the city's made this argument, and lost an eminent domain fight.

30 years ago, the Montana Supreme Court defeated a similar attempt by the city to obtain Mountain Water through eminent domain, a fact the city’s complaint addresses.

"Frankly, I think we have what we need to move forward, and I think that's a big difference from what we experienced 30 years ago,” said Missoula Mayor John Engen. "I think circumstances have changed. I think community support and ownership of the system is high."

The mayor alleges Caryle Group is worried more about its shareholders than its customers.

"Carlyle is always going to be about the money," said Engen. “What we've seen over the course of its ownership in big, broad terms is the rates have gone up, and investment has not kept pace with the needs of the system."

The city also argues that the population of Missoula has grown and put more strain on the city's water supply, and that water issues are much more prominent today that they were in the '80s.

"We see those water issues cropping up around the country, and it becomes a matter of concern over time," said Engen.

But those are points are irrelevant, according to Alan Ackerman, an attorney who specializes in eminent domain cases.

“They're arguing, factually, that they have more residents, and it's getting busier, and the world is changing, but that's really not the basis,” said Ackerman. “The basis is that (the city) can do it right, and that they're better suited.”

Ackerman says for the city to make a successful eminent domain case, it must prove Mountain Water Company is being run improperly, and that the city can do a better job.

"The real question is, is the way they're supplying the water inadequate, or unreasonably priced?” Ackerman says. “It's not clear that they can do a better job. It's not clear that they have a real basis for doing it.”