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Attorneys Gary Zadick of Great Falls, left, representing Mountain Water employees, and Bill Mercer, representing The Carlyle Group, listen during the trial between the City of Missoula and Carlyle earlier this year.

Negotiations between the city of Missoula and Mountain Water Co. employees appear to be inching forward.

If the city of Missoula takes over the water utility as it plans to do, Mayor John Engen has said he wants its staff – who know how to run the system – to work for the city.

Before the city won the right in court to buy the utility, employees rebuffed an offer from the city and asked the mayor to halt the condemnation attempt.

Recently, though, lawyers on both sides have indicated a fruitful discussion is in the works.

Gary Zadick, an attorney with Ugrin, Alexander, Zadick and Higgins, said the employees' goal is to have a satisfactory compensation agreement in place that would be effective on the day the city takes possession.

For instance, he said, workers need to be certain they have health insurance right off the bat. They also want to protect their wages, cost of living adjustments, and other pay.

He said a meeting to talk about the details appears to be in the offing and he'd like it to take place sooner rather than later.

"As far as progress, there's been a little bit," Zadick said.

At a recent court hearing, Natasha Prinzing Jones, representing the city of Missoula, also indicated conversations between the parties seemed to be making headway.

"We believe that the majority, if not all of the employees, intend to work for the city on day one of the transfer of ownership," Jones said according to a transcript of the hearing.

Friday, chief administrative officer Dale Bickell said city officials are eager to demonstrate their earlier commitment to employees – that they will not have their pay cut as a result of municipal ownership but will maintain their compensation.

"We've had some productive conversations between our attorneys, but we haven't had the opportunity to sit down and talk to employees ourselves," Bickell said.

"We're trying to work that out now and we look forward to that conversation and look forward to showing all the commitments we've made during this process we intend to keep."

Mayor Engen is expected to be out of the office for several weeks tending a health issue, but Bickell said the negotiating team can proceed without him. Missoula City Council President Marilyn Marler is filling in for the mayor in his absence, and she is on the team.

Also, Bickell said any agreements that the city and employees develop eventually will go before the council for approval, either on their own or as part of a larger measure.

In court last week, Jones argued the city needs updated pay and benefits information in order to move forward with employee conversations. She showed the court a chart with employee compensation from May 2014 – not to be made available publicly.

She said the city needs current data, and she believes employees are not opposed to sharing the information. However, she said the parent company, Liberty Utilities, subsidiary of Algonquin Power and Utilities Corp. of Canada, isn't cooperating.

"They have been instructed by Liberty that they are prohibited from doing that," Jones said. " ... And that's the type of information that could be easily gathered, that could be useful and productive in our conversations with the employees so that we're prepared to pay them on day one."

At the hearing, Zadick agreed employees want to cooperate in the transition. He said employees accept the terms to which the mayor testified at trial, but the parties need to iron out details.

For example, city rules require a three-month wait for health insurance, he said, and it should start on Day One for Mountain Water employees.

"We have similar interest about PERS investing that we need to work through," Zadick said of the Public Employment Retirement System.

At the hearing, Jones requested the judge's assistance in the transition.

Judge Karen Townsend, though, wanted to know when the city planned to take possession – which requires making the $88.6 million payment.

Jones said the city would like to wait until a separate court case is resolved that will determine whether an estimated $22 million owed developers comes out of the $88.6 million. She said she hoped that question would be settled in December.

At the hearing, Townsend asked Mountain Water's lawyer, Joe Conner, about the owed money: "You would agree with me that at the time that the Commissioners did set the value of the assets, that that did include money owed to the contractors, right?"

Conner disagreed, though, and Townsend said she would take the issue of transition under advisement.

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Higher Education Reporter

Reporter for the Missoulian