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The Bates Land Co. out of Bozeman is marketing 1,212 acre-feet of water from Tenmile Creek for $9.6 million.

The water rights, owned by the Schatz family, is the third in line for the creek, which is the main source of Helena's drinking water. The preceding water rights are both owned by the city of Helena, which is currently in litigation regarding the amount it legally can pull from the creek.

Mike Swan, who is marketing the water, said since Tenmile is part of the Missouri River basin, the water right can be diverted and withdrawn from anywhere in the basin. Swan added that he's received calls from potential buyers as far away as Eastern Montana.

"All of a sudden there's been interest from more people downstream and throughout the state," Swan said.

Swan said that as the population continues to grow in western states, cities have been purchasing water rights to keep up with the pace of development.

"For example, Bozeman has been aggressively purchasing water rights anticipating continued growth in the Bozeman valley," Swan said. "Water rights are worth more than land in a lot of areas, and that eventually will hit Montana. I'm keeping an eye on water trends, and I think in the West it will become a bigger and bigger issue, and it will be harder and harder for municipalities to get it."

Swan approached the city regarding a potential sale, but Helena officials weren't interested, even with a $1 million price tag.

John Rundquist, the Helena public works director, said one reason they're passing on the Schatz water rights is the city doesn't have the capacity at the Tenmile Creek water treatment plant to handle additional water.

"We don't see that it would be beneficial to the city at the price they were asking for it then," Rundquist said. "We have limited treatment facilities and pipelines coming down the hill, which would take a significant capital investment to make use of the Schatz water."

He added that the city has a contract with the Bureau of Reclamation to purchase water from the Missouri River at a cost of about $15 per acre foot, and the city used 2,944 acre feet last year, mainly during the summer months. For that amount, it paid the BOR $44,500 and spent about $200,000 in electricity to pump it uphill to the Missouri River treatment plant.

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Rundquist said the city wants to keep that contract in place and possibly use more Missouri River water in the future.

"As Helena grows, there will be some point in time where the Tenmile plant will no longer be able to provide the water supply alone during the winter months, even when the demand is the lowest," Rundquist said. "When that happens, we'll have to start running the Missouri plant year-round and the Missouri River will become the primary source of our supply."

Swan said it seems ironic to him that the city would allow the Tenmile Creek water to flow into the Missouri, only to have the city pump it back up to the treatment plant.

"I'm a little surprised we haven't had more interactions with the city," Swan said. "Bozeman had the foresight and is planning for growth. It's a little shocking that Helena has not kept up. Being the capital city, the growth in Helena will not slow down and they will need more water."

But it makes sense to Ron Alles, Helena's city manager.

"What I appreciate about our system is we have two major sources for drinking water. So if something happens to one, we still have a back-up plan," Alles said. "We are not relying on one source of water." 

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