A district court judge will decide whether to merge the second phase of Lakeside’s wastewater expansion effort into an ongoing lawsuit targeting the state’s approval of the project.

Lakeside is undergoing a multimillion-dollar reconstruction of its decades old wastewater system. But a groundwater discharge permit issued by the Montana Department of Environmental Quality for the first phase of the project is being challenged in court by watchdog group Citizens for a Better Flathead and the Confederated Salish and Kootenai Tribes. 

The permit allows Lakeside to discharge treated wastewater into groundwater via rapid infiltration basins. The two entities sued the state environmental agency in Flathead County District Court in May 2025 after it stopped short of conducting an environmental impact statement. The lawsuit argues the permit was issued in violation of state environmental laws and could lead to the contamination of nearby surface water, including Flathead Lake and lower Ashley Creek.  

The tribes and Citizens for a Better Flathead motioned to add a new complaint to their existing lawsuit on July 17 after the state agency approved the second phase of the project, which includes construction of a wastewater treatment facility. The second complaint targets the agency’s decision to approve Phase II separately from Phase I. 

The two entities argue that the state’s piecemeal approval of the project violated the Montana Environmental Policy Act. State officials were aware of plans to build a wastewater treatment facility in the second phase and should have reviewed it with Phase I, the complaint states.  

“The state cannot evade environmental review by slicing a massive, single wastewater project into piecemeal approvals — a practice known as unlawful segmentation,” said Citizens for a Better Flathead Co-Executive Director Mayre Flowers in a statement. “Phase I and Phase II are two sides of the same coin.” 

The two entities asked the court to include the supplemental complaint in their lawsuit and allow the Flathead Lakers, a nonprofit advocacy group in Polson, to join that complaint as co-plaintiffs. 

Judge Danni Coffman heard oral arguments about the request on July 21. She is expected to issue a ruling at a later date.  

Attorneys for the state Department of Environmental Quality declined to comment, citing the ongoing litigation.  

LAKESIDE COUNTY Water and Sewer District is upgrading its wastewater system as its current water lagoon system nears full capacity.  

Flathead County commissioners offered to help fund the project with dollars from a $1.6 trillion coronavirus relief bill signed into law by President Joe Biden in 2021. In exchange, the district agreed to treat county wastewater. 

The scope of Phase I oversaw construction of a new septage receiving facility, new headworks facility, a buried force main to connect the facilities and a new lift station. Work started in May 2025 and is expected to wrap up this month. 

Phase II of the project includes construction of the wastewater treatment facility and rapid infiltration basins. Work begins next spring, with an expected completion date in December 2028. The new treatment plant is scheduled to go online by 2029 and treat an estimated 600,000 gallons of wastewater per day. 

Like Phase I, the Montana Department of Environmental Quality determined an environmental impact statement was not required for Phase II after concluding it posed no significant environmental impacts. 

Several Lakeside residents argued during a hearing on April 23 that the state rushed its public comment period, giving them little time to seek outside expert advice on the project. Critics expressed disappointment that alternative options for wastewater treatment went unexplored during the state's review process. 

“The people of Flathead Lake care deeply about the future of this lake,” said Lakeside resident Bruce Young at the hearing, “and they do not want to take any risks or any chances.” 

Report for America Reporter Hannah Shields can be reached at 406-758-4439 or [email protected]. If you value local journalism, pledge your support at dailyinterlake.com/support.