UPDATE – City Councilman Resists Mayor’s Effort to Condemn Mountain Water [AUDIO]
UPDATE - Ward Two City Councilman Adam Hertz said on Tuesday, January 28, that he would have voted "no" to allow Mayor Jon Engen to offer $50 million for the Mountain Water Company, which would probably lead to condemnation.
Hertz said he has deep misgivings over using the condemnation process in an effort to obtain Mountain Water.
"I don't think the condemnation process was made available constitutionally so that a city could take over an entire private business," Hertz said. "I think there's an ethical question, there."
Hertz said the condemnation process holds another potential danger for Missoula taxpayers.
"Condemnation procedures would be very, very expensive, likely millions of dollars," Hertz said. "That doesn't have a guaranteed outcome one way or another. My concern is how the city is going to afford to pay for that, whether it's a win or a loss on the condemnation side."
Hertz said if he had been able to attend Monday night's city council meeting, the vote would have been 11 for, and his lone vote against.
On Monday, January 27, the Missoula City Council voted to authorize Mayor Jon Engen to offer $50 million for the purchase of the Mountain Water Company.
During the meeting, Engen presented his request to the council.
"This evening, I'm asking the Missoula City Council to authorize me to make a formal offer to purchase the assets of Mountain Water Company for $50 million dollars," Engen said. "This request is the next logical step in a process than began with the council's approval of an ordinance number 3,509, which authorizes me to pursue the purchase of the monopoly water utility through negotiation, and of necessary, through condemnation."
Engen said the move has been carefully considered by the city.
"The offer here reflects what our team of attorneys and financial advisers deem reasonable for an asset purchase," Engen said. "We think that the Carlyle Group purchase of Mountain Water is part of a larger transaction for about $50 million dollars, though the actual amount has never been disclosed."
The mayor went on to say that the Carlyle Group had suggested a $120 million price tag, but said that would be rejected, and the city would pursue condemnation through the district court.
The council approved the mayor's resolution by a vote of 11-0, with councilman Adam Hertz absent.
In the offer letter to the Carlyle Group, Mayor Engen set a date of February 4 as a deadline for action by the company to respond to the city's offer. If no reply is received, the letter states the city will begin the process of condemnation.
Mayor Jon Engen