Engen – City Nears Completion Of Mountain Water Acquisition With Two Crucial City Council Votes
After a Missoula City Council meeting that took less than 30 minutes, two important agreements were approved that takes the city closer to the official takeover of Mountain Water Company.
Mayor John Engen opened the meeting by reiterating the reasons for taking control of the utility through the process of condemnation. He said ' a privately owned monopoly operating a water system for profit and the benefit of distant investors will never serve the long-term interests of the public it serves.'
The first order of business was:
Approve the settlement agreement and access and services agreement with Liberty Utilities and Mountain Water for the acquisition of the water system, including conforming changes to the FBO contract amounts as determined by the final reconciliation.
It passed on a 9-0 vote with three members absent.
The second order was:
Adopt a resolution of the City Council of the City of Missoula, Montana, amending and supplementing Resolution No. 8144 relating to the city’s water system revenue bond anticipation notes, Series 2017A and water system revenue bond anticipation notes, Series 2017B, to provide for the City's pledge of a General Fund Obligation Bond for the payment of additional litigation liability, if necessary, and to provide for other matters properly relating thereto.
That also passed on a 9-0 vote with three members absent.
Following the meeting Mayor Engen spoke of the importance of the actions taken by the council.
"This really completes the substance of this entire litigation," Engen said. "We finally have a deal that allows us to move forward in such a way that there won't be inconvenience to customers. Finally, we get ownership. We get to take possession, we get to operate the system, we get to move on."
One aspect of the bonding agreement called for the overall amount to be $140 million, rather than the declared purchase price of $96.4 million. Engen explained the increase.
"The bank has always required that we have contingent funds in case something goes horribly awry," he said. "That's often the case with banks in a deal as significant as this one."
Engen said offers of employment have been made to all the Mountain Water employees, including the management team.
"We have two outstanding offers, but everyone else is under contract," he said. "We engaged in negotiations with those individual employees through attorneys and our promise to make them whole, based on the face that they have signed those contracts, seems to be fulfilled."
Engen said Mountain Water's President John Kappes and another management team member Ross Miller had been offered contracts but 'they are still pending', according to Engen.
Engen did not take ownership of a 'legacy' surrounding the Mountain Water takeover.
"I don't think of it as a legacy," he said. "I do think of it as a benchmark for Missoula, and a turning point, really. The fact of the matter is, we're the only municipality in the state that doesn't control its water system and you don't have to look very far into the news feeds on the internet to know that water matters."
Engen said the official transfer of ownership should take place by the end of June, completing a tumultuous several years of condemnation, a $10 million court case, and appeals to the Montana Supreme Court.