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Mayor: Mountain Water Sale Changes Nothing For City's Condemnation Plans

Edward O'Brien

It looks like Missoula's city water system could be sold to a Canadian company.

Liberty Utilities, a subsidiary of Algonquin Power & Utilities, has reached an agreement with The Carlyle Group, which currently owns Missoula's water system.

Algonquin is expected to pay an estimated $327 million for Missoula's system and three other utilities. That price includes assumption of about $77 million of existing long-term debt.

No one from the utilities or Carlyle were available for comment today. But, Missoula Mayor John Engen held a press conference earlier this afternoon.

MTPR's Edward O'Brien was there.

Edward O'Brien: "Eric, Mayor Engen's take on today's announcement is crucial, because don't forget, Missoula's attempting to use eminent domain to take ownership of Mountain Water. Back in April, the city filed a condemnation action against The Carlyle Group to do just that."

Eric Whitney: "So what's Engen's reaction to today's announcement?"

O'Brien: "The answer is two fold, Eric. First, he says he had no idea this was coming. In fact, he found out at 4:00 this morning, when he received an email from Algonquin CEO Ian Robertson."

Missoula mayor, John Engen: "We're in a process of acquiring Mountain Water, through legal means that is eminent domain. We remain open to the notion of negotiation as we always have, but fundamentally Carlyle is the owner and we intend to prove to the court that public ownership is indeed a necessity at this point. This announcement is just further evidence of that fact."

O'Brien: "Engen maintains Missoula would be the best owner of Mountain Water, because the city isn't motivated by profit and because it's interested in the company's sustainability and - over time - affordability for Missoulians."

Whitney: "Mayor Engen says nothing changed today...but, hasn't the sale price changed? A few years ago, Carlyle purchased the group of companies that include Missoula's system for just over $100-million dollars. Today's announced price is over $320-million dollars."

O'Brien: "Engen says there no reason for him to believe there's anything valid about that $327-million-dollar quote."

Engen: "This is a deal on paper that has nothing to do with the real value of the company. Speculation and exuberance over what may be happening in the market place doesn't matter a lick to us. What matters is really what this thing is really worth. I don't believe that the numbers we're seeing today are an accurate reflection of the value of the company."

Whitney: "How much money has the city of Missoula spent so far in this eminent domain case?"

O'Brien: "As of today, Engen says close to $500-thousand-dollars. I asked him if today's announcement means that taxpayer money has essentially been thrown away."

Engen "No. Because again, Ed, Carlyle owns this company, Carlyle is embroiled in this lawsuit with us and Carlyle is the company from whom we intend to purchase this as a function of a court order."

O'Brien: "The mayor said money to bankroll that $327-million-dollar sale price could only from 2 places:"

Engen: "It's gonna come from rate and it comes from expenses. If you start looking real hard at the math on some of this stuff, rates are going to have to come up and expenses will have to come down."

Whitney: "So why would a Canadian company want to get involved in this legal fight?"

O'Brien: "Good question. I asked if this is an indication that Algonquin isn't too concerned about the merits of Missoula legal argument for condemnation."

Engen: "We wonder the same thing, Ed. What I wonder more is how arrogant Carlyle is in simply proceeding to sell this as if Missoula doesn't matter. That was the most striking thing for me today. I have indicated to the Canadian company that we're interested in buying the water system that we're very interested in owning it. While they may have an agreement on paper, that's far from reality. The reality is, these folks are going to have to deal with the city of Missoula."

Whitney: "So what now?"

O'Brien: "Well, Mayor Engen says he hopes to meet with representatives of Algonquin next Wednesday."

Whitney: "And again, we tried to reach Carlyle and the representatives of the other utilities?"

O'Brien: "Yes and they declined comment."

O’Brien first landed at Montana Public Radio three decades ago as a news intern while attending the University of Montana School of Journalism. His first career job out of school was covering the 1995 Montana Legislature. When the session wrapped up, O’Brien was fortunate enough to land a full-time position at the station as a general assignment reporter. Feel free to drop him a line at
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