Missoula approves $5.4m water bond, splits facility renovation costs to protect ratepayers
City of Missoula, Montana · Meeting date: June 8, 2026 · Published: June 16, 2026
The Missoula City Council has authorized a $5.4 million water system revenue bond alongside a separate road district bond to finance the renovation of its shared public works building, legally segregating water revenues from general municipal costs.
Key points
- Council approved a $5.4 million water system revenue bond (Series 2026A) to fund the water utility's share of the Missoula Water Building remodel.
- A separate $4.4 million special road district bond was approved 10-1 to cover non-water public works operations housed in the same facility.
- The city also authorized up to $8.07 million in DNRC Drinking Water State Revolving Loan Program bonds.
- A new full-time employee was approved for the water utility service line crew ahead of peak construction activity.
Full report
The Missoula City Council on June 8, 2026, approved a $5.4 million water system revenue bond to finance the water utility's portion of a major renovation to a shared public works facility. The authorization was part of a broader, bifurcated funding strategy designed to prevent water ratepayer revenues from subsidizing general municipal functions.
The facility, commonly referred to as the Missoula Water Building, was acquired during the city's takeover of Mountain Water. It has since been expanded to house a significant number of public works staff, including personnel managing wastewater, stormwater, and road maintenance.
To finance the comprehensive remodel, the city split the debt issuance. Alongside the $5.4 million water revenue bond, the council approved a $4.4 million special road district bond to cover the non-water portions of the building. Finance Director Lee Griffin noted that while historical water infrastructure projects have been financed exclusively with water revenue bonds, this shared facility required a structure that aligns repayment sources with the specific functions benefiting from the space.
The split financing sparked some debate. Councilor Campbell opposed the road district bond, citing a 2018 pledge by the late Mayor Engen that the water company's operations and infrastructure would be funded entirely through water bills rather than property taxes. Campbell warned against a "slippery slope" of introducing property tax revenue to the facility's improvements.
However, other council members defended the strategy, arguing that using water revenues to pay for the entire remodel would violate the commitment to use water funds strictly for the water system. Councilor Nugent noted that repurposing the existing building for broader public works use saved the city from a previously estimated $30 million-plus cost to build a new facility from scratch. "The taxpayers of the city aren't paying for the water operation. They're contributing to everything else," Nugent said.
The water revenue bond passed unanimously, while the road district bond passed 10-1.
In addition to the facility financing, the council unanimously advanced a resolution for up to $8.07 million in water system revenue bonds through the DNRC Drinking Water State Revolving Loan Program (Series 2026B through 2026I). The council also approved the addition of one full-time employee for the water utility service line crew to ensure sufficient training and onboarding before peak construction activity.
This summary was generated by AI based on the source document and may contain errors.
Source: City Council Meeting, City of Missoula