- Associated Press - Wednesday, June 17, 2015

MISSIOULA, Mont. (AP) - A judge has sided with the city of Missoula in its effort to gain ownership of the water company that serves its residents.

District Judge Karen Townsend found that the city was able to prove its plan for a city-owned water system is more necessary than its current use as a private, for-profit enterprise. Townsend issued a preliminary order of condemnation on Monday.

Mayor John Engen said during a news conference Tuesday he was pleased with the decision. Meanwhile, city attorney Natasha Prinzing Jones said the ruling should withstand an expected appeal to the Montana Supreme Court, according to the Missoulian.

The city had tried to purchase Mountain Water Co. for up to $65 million, but The Carlyle Group rejected the offers so the city filed a complaint for condemnation.

Townsend found the city could operate the water system more efficiently and at less cost and could finance the purchase at lower interest rates than a private owner. She also noted the city would be eligible for government grants for upgrades.

Mountain Water President John Kappes said the company disagrees with the ruling and will take steps to exercise its rights as a private property owner.

While the eminent domain case was being decided, The Carlyle Group, a major investment firm, negotiated with a Canadian company - Algonquin Power and Utilities Corp. - to sell Mountain Water and two other water systems in California in a package deal worth $327 million.

Carlyle Group attorney Joe Conner has suggested Mountain Water is worth $126 million.

The sale price under the eminent domain order is still to be determined, officials said.

Townsend noted that she had previously found the water system is aging and that capital investments have been inadequate and maintenance deferred under private ownership, meaning significant money will need to be spent on the system.

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