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Missoula mayor discusses new details in Mountain Water efforts

By Scott Zoltan, KECI Reporter, szoltan@keci.com
Published On: Feb 13 2014 10:30:07 PM MST
Updated On: Feb 13 2014 10:48:38 PM MST
MISSOULA, Mont. -

At a Wednesday Committee of the Whole meeting with Missoula City Council, Missoula Mayor John Engen presented new details on his efforts to have the city obtain ownership of Mountain Water. The utility is currently owned by the Carlyle Group.

Engen said that if the city loses out in a condemnation attempt, it could have to pay roughly $800,000 to cover Carlyle’s court costs. He has said, however, that it is important for the city to try to gain ownership of the utility.

In a January 27 memo to City Council, Engen wrote “Condemnation is serious business and I’m not leading us down this path lightly. I believe, in the public interest, I’m required to pursue this method because of what’s at stake: rights to Missoula’s water and its distribution.”

One potential method for the city to purchase Mountain Water is by issuing bonds.

At the end of January, the Carlyle Group rejected Missoula’s purchase offer of $50 million. Carlyle Infrastructure Partners Managing Director Robert Dove wrote to Engen, saying, “I reiterate that Carlyle Infrastructure and Mountain Water will vigorously defend our legal rights in the event of condemnation.”

A condemnation effort would mean an attempt by the City to prove in court that it would be a public necessity for the City to control Mountain Water. A recent ordinance gave the Mayor authority to begin condemnation proceedings, but his staff tells NBC Montana that Engen has no concrete plans to begin proceedings, and he will continue to discuss the matter with his team and Council.

Transaction costs were also discussed at Wednesday’s meeting. It’s estimated that about $4.2 million could be spent on transaction costs for the City, including $1.75 million to a Mergers and Acquisition Advisor and $400,000 to a Condemnation Counsel.