Following impassioned comments from an overflowing crowd Wednesday seeking a delay or outright denial of the agreement, the Lakeside County Water and Sewer District board approved a revised contract to provide water to planned resort development near Blacktail Mountain.  
The district board, on a vote of 4-1, agreed to provide water to the Territory 1889 subdivision to serve the first two phases of the development. The full project is expected to include 359 homes, along with commercial development and open space, on 1,700 acres in Lakeside.  

The major change to the agreement was to reduce the amount of water allocated to Territory 1889. The new agreement provides an allocation of 80 acre-feet per year as opposed to 125, for an annual rate of $52,160. 

During the first round of public comment, the board of directors drew the ire of residents who believed there had been insufficient notice given for the meeting and that the office was inadequate to host the large group. Hands were on hips as the fired-up crowd, comprised mostly of Lakeside residents over the age of 60, stared down the board. It rapidly got louder in the small space as community members and board members spoke over each other. Profanities started to fly around the room. In the back corner, someone flipped the bird.    

Board president Tim Kluesner moved to recess the meeting until a sheriff's deputy could arrive. 

Board member Darcy Lard moved to postpone the meeting, but without a second, the motion died. Three deputies responded and spoke at length with the crowd milling around outside the office, explaining that this was a civil issue and not a criminal matter, so any complaints would have to be addressed in court.   

After an hour, the meeting reconvened.

"What troubles me," Lakeside resident Melissa Vilmure said on behalf of her neighbor Heather Johnson, "is the message this sends the families who have built their lives here: that our community needs come second to the interest of private development. Our water is not simply a commodity to be promised away; it's a shared resource, a public responsibility and part of our community's future... We deserve better. Progress should never come at the expense of the very community it claims to benefit. "   

Most of the 15 people who spoke circled around this theme, wary of the changes the large development will bring to the small, unincorporated community.    

Flathead Lakers Executive Director Coby Gierke brought up Discovery Land Company's track record surrounding water. In 2025, the state Department of Natural Resources and Conservation sued Crazy Mountain Ranch, another Discovery property in the Shields Valley, over illegal water use.   

"This developer is willing to get their water from wherever the hell they can, and that's why you need to be very careful before you enter into long-term, exclusive, and non-ending agreements with these guys," Gierke said. "They should have all the means that they need to acquire their own water through the proper channels with DNRC to get their water rights and their wells approved. They want to speed this process up because they want to sell houses, so they're trying to go around the courts. I would urge you not to let them do that."   

The district's general manager Rodney Olson pointed out that the board has entered into similar water rights allocation agreements with other developments in the past. When asked by Kluesner if the board can discriminate against developments it doesn't like, Olson responded, "I've always been under the impression that we better not do that. We have to treat everybody fairly and equally and not discriminate." 

A previous developer drilled two wells on the property, and Territory 1889 applied for a water rights permit through the Montana Department of Natural Resources to use those wells, but the application is currently tied up in litigation.   

In the meantime, the developer approached Lakeside about purchasing water from the district to serve the first phases so that construction can continue. 

The first version of a water rights allocation agreement was passed by the board of directors at its August meeting to little fanfare, with public attendees numbering in the single digits. That agreement allocated 125 acre-feet of water per year to Territory 1889 for five years, with the option to extend for two additional one-year terms at a rate of $81,500 per year.

But the issue of water has been a sticking point in discussions with the Flathead County Planning and Zoning office, as the developer has pursued final plat approval from county commissioners, who have twice tabled the vote on the issue before approving it on a split vote Thursday.   

Olson said the county requested the agreement be updated to include language about fire flows for insurance purposes.  

The allocation was reduced to reflect the water needed to serve the first and second phases of development, which is around 150 houses, he said. The initial agreement included water to service part of the third phase, but after further discussions, it was decided to restrict the agreement.  

A few loose threads from the public comment period were also clarified by the district. The water rights allocation agreement is a separate issue from the out-of-district hookup moratorium the board passed this month, which only applies to sewer. Territory 1889 will still be charged a water bill in addition to the allocation fee. The district isn't selling its water rights — it's only allowing Territory 1889 the use of those water rights. 

The district has rights to 635 acre-feet of water, or a little more than 200 million gallons. In the past 10 years, the most the district has used in a single year is 197 acre-feet. 

Ultimately, the board voted to approve the new agreement with Lard as the lone objection. Grumbles erupted from the audience as Kluesner adjourned the meeting.    

"I don't think that is Lakeside," he said. "I've never witnessed that type of thing in Lakeside until today. So, I ask everybody: talk to your neighbors, understand what's going on. This is a very, very big thing that's going on in our community, and we have to work with it. We can't just say no. We have to work with it for us and for our kids and for the future." 

Reporter Elsa Ericksen can be reached at 406-758-4459 or [email protected]. If you value local journalism, pledge your support at dailyinterlake.com/support.