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Monday night's Missoula City Council meeting was a little more jubilant than the average municipal assembly. That's when Mayor John Engen announced the results of the city's contentious—and costly—Mountain Water condemnation trial. Missoula had beaten Carlyle Group, the deep-pocketed international conglomerate that purchased the utility in 2011.

In a 68-page decision, District Judge Karen Townsend agreed with the city's argument that it would be a better longterm steward of its public water system than a for-profit corporation.

"It's certainly the first step in the outcome that I am hoping for," says City Councilman Jason Wiener, one of the most outspoken advocates in favor of municipal ownership of Mountain Water.

Wiener's cautiously optimistic tone is because now the city must engage in valuation proceedings. As part of the eminent domain process, the judge will negotiate how much Mountain Water is worth, as well as how much of Carlyle's legal fees the city must cover. With Missoula's own legal expenses already at $3.2 million, even the most ardent supporters of Engen's plan have been anxiously eyeing the meter.

How much Mountain Water is worth now becomes the big question. Carlyle purchased it and its parent company in 2011 for $102 million, after which the city offered $65 million and was rejected. In September 2014, Carlyle announced plans to sell Mountain Water and two California utilities to Liberty Utilities, a subsidiary of Algonquin Power and Utilities Corp., for $327 million. Liberty let slip enough information at an investors meeting last September that the Indy surmised its offer to buy the Missoula utility came somewhere within shouting distance of $70.4 million.

At a Tuesday press conference, the city's legal team wouldn't disclose how much it might have in mind, but did say the utility was appraised as recently as October 2014.

Carlyle has 30 days after the court's ruling to make an offer to sell the utility, and the city has 20 days to respond after that. If negotiations don't work out, a three-member commission will be appointed to mediate the sale.

Given the number of tactics that Carlyle used to delay the trial, Wiener says it's also reasonable to expect the firm to throw a few monkey wrenches into the valuation process. "But they haven't landed in the machinery yet," he says.


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