Mountain Water Company President John Kappes recently challenged the City of Missoula’s claims that it will be able to run the water system more efficiently, while saving the city money. According to Kappes, the city needs to count all of the costs of the Mountain Water acquisition, starting with the 88.6 million dollars of the fair market value and then adding in attorney fees, statutory interests, closing costs, and capital costs Kappes estimated a total of $124 million but that was just to get the ball rolling.

"On top of that, the city has said that they believe they needed to spend six to nine million per year for capital improvements, that will be ongoing borrowing that they will have to do over the next ten years, in the projections we put together, we used the six million a year for 10 years, so principal and interest on all those costs, over the next 30 years, will be over 312 million dollars."

Because of the costs, Kappes says rate payers will pay more under city management than under management by Liberty utilities.

"In a private sale, there isn't the mark-up of the business to the fair market value like happens in condemnation, so the rate payer will have to pay that mark up to fair market value, so that's an increased cost to the rate payer. The other thing is that, we do have returns, but our returns are what we put back into the system. Not as much money will leave   under private ownership as under the public ownership plan."

Kappes said that the costs of Missoula’s acquisition are especially important, because under a public municipality, those costs can be passed on to the rate payers, however, a private company like, Liberty Utilities is prohibited under Montana law through the Public Service Commission from passing premium costs on to rate payers.

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