MISSOULA, Mont. - The City of Missoula rested its case Friday in the trial over ownership of the city's water system, but not before the calling one final witness, who warned that a private buyer might bottle and sell Missoula's water if the city loses its condemnation suit.
Clark Fork Coalition Executive Director Karen Knudsen testified that she first became concerned about bottling when she learned that the Carlyle Group was trying to buy Mountain Water Company in 2011.
"It occurred to us that a huge threat of having a giant global investment firm having control of our water supply opens up the possibility of large-scale bottling," Knudsen said. "Based on current Montana law, that looks legal. That looks possible to us, and we've certainly been tracking trends nationwide, if not even globally, where large-scale bottling has caused some huge problems for watersheds."
She said Carlyle officials met with Knudsen and Missoula city officials while the sale was pending, and in exchange for their support, Carlyle CEO Robert Dove signed a letter of agreement guaranteeing, under Carlyle ownership, the Rattlesnake watershed would be protected, the city would be given a legitimate shot to be the next owner of Mountain Water, and Missoula's water would stay in the Missoula valley.
"Mr. Dove testified back then that there would be no bottling, didn't he?" Knudsen was asked in court.
"Yes," she answered.
"And he stuck by his word, didn't he?"
Three years later, news broke that Mountain Water, once again, was for sale, and Carlyle had reached a sales agreement with the Canadian-based Liberty Utilities.
Knudsen said Mountain Water President John Kappes asked to meet with her for coffee, where he delivered a message from Carlyle -- a message that reignited her concerns about bottling.
"What did he want in return, for the agreement by the new owner, or Mountain Water Company, or Carlyle, to extend the old agreement?" an attorney for Missoula asked.
"He wanted us to drop the provision that would prevent bottling, and he wanted the Clark Fork Coalition to stay on the sidelines," replied Knudsen.
She said the Clark Fork Coalition turned down the offer and was named as an intervener in the pending sale -- one that the Public Service Commission must approve.
In cross-examination, Knudsen admitted that she had no indication from the PSC hearings that Liberty had any plans to handle Mountain Water differently than Carlyle.
"You also know that Liberty is committed to keeping the water local, and not to bottle and divert it elsewhere, as a result of your active role as an intervener in that litigation, correct?" an attorney for Carlyle asked her.
"Correct," she replied, but she argued that Liberty's testimony before the commission provided no guarantees.
"It's not entirely clear, given Liberty Utilities' complex organizational chart, who's exactly calling the shots, and whether not every single corporate entity on the roster will actually abide by those commitments."
After Knudsen testified, the City of Missoula rested its case and attorneys for Carlyle called their first witness, Logan McInnis, the chief engineer of Mountain Water Co.
During his testimony, McInnis challenged some of the city's claims about leakage of the water system.
The case, and our coverage, continues Monday at 9 a.m.