Judge denies Mountain Water’s request for interest

water

By Martin Kidston/MISSOULA CURRENT

A District Court judge this week denied Mountain Water’s request to add more than $16 million in interest to the $88.6 million value that a commission placed upon the water utility last fall.

The utility and its former owner, The Carlyle Group, had asked the court to add 10 percent interest to the fair-market value set by the water commission – a figure the city disputed.

District Court Judge Karen Townsend denied Mountain Water’s request for any interest, saying it failed to meet the statutory requirements for such an award.

“There has been no taking of the subject property, nor has Mountain Water suffered any injury of constitutional dimensions to its property interests,” Townsend wrote in her ruling, which was released on Wednesday.

Mayor John Engen described the ruling as both “significant and helpful.”

“The judge, while not accepting all of our arguments, accepted some of them,” Engen said. “The net result is exactly what we wanted, and that was a number of zero.”

In its argument, the city contended that Mountain Water successfully challenged the issue of valuation during the November hearing. The end result saw the water commission set a value for Mountain Water at $88.6 million.

After the hearing, Mountain Water said it was owed an additional $1 million for utility improvements and interest of 10 percent per year.

“Mountain Water’s petition for an award of interest on the commissioner’s award is denied,” Townsend wrote. “(But) The city’s motion for a ruling that defendants are not entitled to any post summons interest is (also) denied.”

Engen said the city’s legal staff was still working through the details of Townsend’s ruling, including that related to interest on post-summons improvements.

The mayor said the city is also preparing to argue before the Montana Supreme Court. Mountain Water appealed Townsend’s ruling on necessity to the high court last year. The case will be heard on April 22.

Engen said the city is prepared to pay the $88.6 price to own its drinking-water system.

“The judge has awarded the defendants zero and denied their motion for interest payments in wake of our efforts to acquire (Mountain Water),” Engen said. “We think $88.6 million does it all, according to the valuation commission, and that’s where we stand.”