City adopts fees and regulations guiding ownership of drinking water system


By Martin Kidston

The Missoula City Council on Monday night adopted regulations guiding municipal operation of Mountain Water Co. and its drinking water system, though several members of the council suggested the ordinance could use some additional tweaking.

After working on the language since mid-March, the council adopted the fee-setting ordinance on 9-1 vote. Ward 6 council member Michelle Cares voted against the legislation. Ward 2 council member Harlan Wells was absent and Ward 5 council member Julie Armstrong abstained from voting.

“I did hear some things tonight we should probably look at,” said Ward 3 council member Gwen Jones. “But I didn’t hear anything in there that made me feel like we should stop this process while we continue to revise. I think we should get this on the books at this point.”

Since the council held its first public hearing on the ordinance back in March – a hearing that brought a number of concerns to light – the city changed language pertaining to trespassing in the watershed, and deleted restrictions for private irrigation wells.

John Wilson, the city’s public works director, said changes also softened language pertaining to late bill payments to reflect Mountain Water’s current practices.

“We want to understand what the current practice is and incorporate that,” said Wilson. “With these issues and many others, we look forward to having Mountain Water employees come on board with us and help us fine tune the final rules and regulations.”

While the new ordinance marks progress over earlier drafts, several members of the public, along with Mountain Water employees, maintained concerns regarding certain language and the current rate structure.

Ross Miller, a local resident, believes city leaders have argued in court that Mountain Water’s current rates are not just and reasonable. If that’s the case, he said, it wouldn’t be just and reasonable for the city to adopt them.

“The city can’t have it both ways,” said Miller. “If these rates are not just and reasonable under Mountain Water, then these same rates are not just and reasonable under the city.”

Mountain Water President John Kappas also raised concerns, saying the city’s attempt to emulate a utility currently regulated by the Montana Public Service Commission won’t work.

Kappas believes the ordinance is missing critical pieces, including just and reasonable rates, equality among customer classifications, and interest and refunds on customer deposits. The new policy also increases the customer’s responsibility to maintain water lines, he said.

“Even if you did write an ordinance or rules to resemble what customers have today for protections under PSC regulation, it still won’t work as current practice for a municipal utility,” he said.

Kappas said a private utility is not 100 percent debt financed. Certain equity provisions protect customers, employees and bond investors should the company’s revenues not meet projections.

But Kappas said such protections won’t exist under city ownership. Rather, the ordinance leaves customers and bond investors at risk. It also fails to ensure the city will hire Mountain Water employees, and it doesn’t commit the City Council to make payments in lieu of taxes owed to Missoula County Public Schools.

Kappas placed the amount currently owed at $3 million and growing by $150,000 a month.

“The ordinance is still written in a way that prevents a municipal utility and its employees from providing this community with reliable service and just and reasonable rates, and it shifts unnecessary risk to community stakeholders,” he said.

Ward 4 council member Jon Wilkins also raised concerns over language in the ordinance describing penalties or fines for certain violations. While Wilson agreed to give the language a second look, he said the ordinance needed teeth and that city employees must exercise discretion while enforcing violations.

Mayor John Engen said nearly all of the city’s ordinances allow for penalties.

“We do have to have ordinances that provide for penalties, but that doesn’t mean anyone’s being criminalized as a customer,” Engen said. “What it does suggest, however, is that if you’re not willing over time to follow the rules and regulations that provide for fairness and public safety, there may be a penalty for that. This ordinance isn’t an outlyer by any stretch of the imagination.”

The Montana Supreme Court has yet to rule on an appeal challenging a District Court ruling that gave the city the power to acquire Mountain Water through eminent domain. In the event the court ruled against the city, the new ordinance could be repealed. If it upholds the the lower court’s ruling, council members said they’ll continue to improve the ordinance.

Contact reporter Martin Kidston at info@missoulacurrent.com