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Montana Supreme Court Hears Mountain Water Condemnation Case

The Montana Supreme Court hears arguments April, 22 2016 over the eminent domain case involving Mountain Water Company in Missoula.
Bree Zender
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The Montana Supreme Court hears arguments April, 22 2016 over the eminent domain case involving Mountain Water Company in Missoula.

Montana’s Supreme Court today heard arguments in a case that will determine the future of Missoula’s water utility. The City of Missoula first tried to take ownership of Mountain Water Company by condemnation in the 1980s. Its current attempt that the court is now considering started in 2013.

Mountain Water says Missoula has no right to forcibly purchase it and turn it into a public asset.

"We believe the record will review that the city of Missoula wants — but does not need — the Mountain Water Company."

That’s attorney Brad Luck, representing Mountain Water during today’s oral arguments.

Last year a district court judge ruled in favor of the city, saying public ownership is a "more public use" than the utility staying in private hands.

Luck today asked the justices to reverse that ruling.

"Not for a new trial, but for dismissal. The city had its chance."

Mountain Water argued that the financial assumptions the city presented last year in district court were wide-ranging and unsupported.

"Virtually all of [the city’s] money witnesses indicated they couldn’t determine if it was affordable, or the other financial ramifications of the city taking this system without knowing what the acquisition and bonding costs were."

City attorney Harry Schneider countered that the district court judge considered all the necessary financial factors in her decision.

"Judge Townsend permitted the evidence of the bonding capacity, and what would happen if the price was higher or lower in that trial. There was ample opportunity."

Schneider also pointed out that 128 incorporated Montana communities successfully own and operate their own water systems.

Supreme Court Justice Beth Baker asked Schneider if just because a practice is common does that make it "more necessary."

Schneider: No, not necessarily.

Baker: So the question is, what is the public recourse if something goes awry?

Schneider: Public recourse is, among other things, the electorate makes a decision on whether or not current city leaders are retained. As far as some monetary claim, if that’s what you have in mind? I don’t know that there would be an opportunity to sue to the city for some reason.  If something goes awry with the water system, whether it’s privately owned or municipally owned, it’s going to be fixed. It has to be fixed. Because it’s the sole [water] source – other than wells – for the citizens of Montana."

Mountain Water attorney Brad Luck says the city has no credible business plan.

"If Mountain Water makes a financial mistake, the Public Service Commission is there to protect the consumers. If the city makes a financial mistake, nobody is there to protect the consumers. The bond covenants will require that they raise, raise, raise rates to take care of any financial obligations in the mismanagement or the error in acquisition of this system."

City Attorney Harry Schneider said there’s wide public support for public acquisition of Mountain Water. He said several local officials, including mayor John Engen, were elected, in part, on that very issue. Schneider mentioned a public opinion poll presented in last year’s trial:

"And they found that overwhelmingly the public supported acquisition of the water system by the city. And at some 80 percent figure, trusted the city to look out for their interest with respect to the water. That’s evidence. It was cross examined. Let’s see what the contrasting evidence was: There was none."

Mountain Water says that poll was filled with loaded questions and made no mention of condemnation.

The Supreme Court issued no ruling today. One isn’t expected for several weeks, if not several months.

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