Missoula has paid nearly $3.4 million in condemnation costs (July 19, 2015)

The city of Missoula has paid a big bill for condemning Mountain Water Co. — $3.39 million and counting.

The parties who got a slice of the pie range from hometown lawyers to out-of-state engineers, from local to far-flung finance gurus.

The amount doesn’t reflect the grand total, either. The case is entering another phase of condemnation in which water commissioners determine just compensation. In a separate process, the defendants also have appealed to the Montana Supreme Court.

If the city does buy the water utility, as it now has the right to do, it will pay the reasonable legal costs of the other parties. So a battle over attorneys’ fees surely will take place.

Here’s who has billed the city so far.

The law firm Boone Karlberg has collected $1.1 million from the city to date, with $640,000 for its own fees, and $540,000 passed on to expert witnesses, according to the law firm and the city of Missoula.

The bulk of the payments to expert witnesses went to HDR Engineering for a forensic analysis of the water system, according to Boone Karlberg. The engineering firm received $465,000, and lawyer Natasha Jones said the city will be able to use the product as a guide for bringing the system up to industry standards in the future.

HDR’s analysis is critical information when the city starts fixing the system. That information will be usable by the city for years to come, said Jones, who is working on the case.

Scott Stearns, also with Boone Karlberg, said the system had never received such a thorough analysis. The water company had reported a leakage rate of some 40 percent, he said, but HDR’s investigation showed the actual rate was even higher, some 52 percent.

The Aztecs would not have put up with that in ancient Mexico City, Stearns said.

Of local vendors, Boone Karlberg has received the most money from the city of Missoula. However, Mayor John Engen also said the bill could have been much larger.


Having them combined with the expertise of a guy like Harry Schneider, who has incredible respect for them as well, is phenomenal, Engen said.

Schneider is a lawyer with Perkins Coie, which has billed the highest amount to date of any vendor, some $1.66 million.

A significant portion of the amount going to Perkins Coie was for litigation, and the bill also includes related expenses, such as travel for the dozens of depositions requested by the defense, Jones said.

The city has paid Datsopoulos, MacDonald and Lind $436,000, according to a list of expenses from the city. Those costs include fees paid to an appraiser, a water rights expert and a polling firm, among other costs, Jones said.

Datsopoulos also could have come in with a higher bill, the mayor said.

They have discounted hours, they have consulted without billing, and they have been enormously helpful as well, Engen said.

Fees to the law firms paid for court reporters, deposition transcripts, legal research fees and court costs. The mayor said an entire team of lawyers, paralegals, consultants and interns stands behind the lawyers at the fore.


Hayward Consulting Group in California earned $102,263. The group specializes in public utility valuations, and it assessed the value of Mountain Water for the city of Missoula.

Power Consulting of Missoula was paid $41,775 for an economic analysis of public water utilities versus private ones. Thomas Power, former chair of the economics department at the University of Montana, also provided expert testimony in court.

Based in Minneapolis, Springsted received $24,982. The mayor said the financial advisers have provided a number of services in the water case, including financial modeling, preparing expert testimony based on the modeling and administering the selection process for the engineering firm that performed the forensics analysis.

The city paid Ken Toole, former Montana Public Service Commissioner, $8,032 for a study and for testifying in court. Toole’s testimony addressed the agency’s shortcomings in regulating the water utility.

Dorsey Whitney of Missoula earned $5,525 for producing a business plan showing the city could run Mountain Water, according to Boone Karlberg. The city paid a local consultant at Financial Resources $4,231 for work on valuation, and it also paid former city finance director Brentt Ramharter $1,500.

Source: Keila Szpaller, The Missoulian