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Missoula Mayor John Engen stands next to an affordable housing complex being built in the Old Sawmill District development recently. Engen said that planning housing growth for all income levels remains one of his priorities for the coming year.

The city of Missoula is ready to pay $88 million for Mountain Water Co., Mayor John Engen said Friday.

This week, the city withdrew its appeal of the award of just compensation, a figure determined by water commissioners in a Missoula County District Court proceeding. The three water commissioners unanimously agreed to the amount.

"We're ready to own and operate a water company on behalf of the citizens of Missoula," Engen said. "And we are and have always been ready to pay what commissioners have determined to be a fair price."

The defendants in the case, Mountain Water and owner The Carlyle Group, had not appealed the amount. On Friday, a Carlyle spokesman declined to comment on the turn of events.

However, at a morning news conference, the mayor said he believed the defendants planned to respond in District Court to the city's notice it was withdrawing its appeal. In his office, Engen and his lawyers answered questions from reporters, a member of the public and a Mountain Water employee.

The lawyers were slated to begin jury selection Monday for the appeal of the value. The jury was to hear the case and determine whether $88 million was a fair price – or set a higher or lower amount.

The city had wanted to pay only $45 million, but the defendants argued the system was worth $142 million.

At the briefing, Engen said the city had appealed the $88 million because it was concerned developers who had advanced money for infrastructure to Mountain Water "would be left in the cold." He said a judge's order clarifies the outcome, and the city will not have to pay the $22 million developers estimate they are owed on top of $88 million for the company.

In the order, however, Judge Karen Townsend said the city had not successfully argued it should pay the obligation and have the amount deducted from the $88 million.

The mayor said the judge will resolve in court the exact amounts owed developers. Late Friday, the party responsible for paying remained unclear.

At least one Mountain Water employee feared another group was being left out in the cold – staff at the water company. Mountain's Greg Gullickson said the mayor had promised him and his colleagues a seat at the table, but he never knew the table's location.

"So where's the table, Mr. Mayor?" Gullickson said.

Said Engen: "I don't own the water company yet, Greg. But once we do, the table will be set."

Employees had opposed ownership by the city and favored ownership by a private company. A sale to the private company is on hold in a separate process.

Last summer, the defendants appealed the judge's June order that the city had the right to use its power of eminent domain to purchase the water system. That appeal is pending in the Montana Supreme Court, and state statute calls for the courts to proceed "expeditiously" in eminent domain cases.

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Reporter for the Missoulian