Lessons Learned from Missoula

This week, some anti-private water activists are celebrating what they view to be a victory, as the city of Missoula, Montana takes ownership of the water system. As these groups pat each other on the back for taking over a private water system, what they won’t be talking about is the very high price Missoula residents are going to pay as a result.

Proponents of the takeover of private property told residents that the process would be quick and easy. In reality, it has been long and expensive. For instance, takeover proponents initially estimated that costs for the acquisition would total just $400,000. However, the final price tag has topped more than $6 million.[i] Even more shocking is how the total cost of the acquisition to Missoula taxpayers will exceed $100 million, which is more than twice the amount the city previously offered for the water system.[ii]

Takeover proponents went through this long, expensive and difficult process just to be able to say their water system is publicly owned. But their so-called victory over the private sector carries some irony, as Missoula will issue up to $140 million in bonds to finance the purchase of the system. And these bonds will be privately held. Montana Public Service Commission Vice-Chairman Travis Kavulla noted this irony earlier this week, saying,

“The city will own the utility in name, but is financing its large purchase entirely through private bond investors. It’s a little ironic that, at the end of the day, Missoula consumers will pay more to private investors under city ownership than it did when the utility was officially owned directly by private investors.”

Unfortunately for residents, Missoula is just another example of the expensive, broken promises that result from private water system takeover efforts.

[i] Missoula Independent, “Trickle-down effect; Missoula just won Mountain Water! Now, about those legal fees” 4 August 2016
[ii] Presentation, “Water System Acquisition Financing” 15 February 2017
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