Confusion over the review of water distribution plans for a subdivision north of Helena prompted the city to be fined $1,750 by the state for operating an unapproved extension of the city's public water supply system prior to approval.

Helena Public Works Director John Rundquist prefers to call the penalty a "settlement," adding that the city didn't knowingly skirt Montana Department of Environmental Quality laws.

"This was a communication problem between the city and the DEQ," Rundquist said on Thursday. "But they insisted on fining us and we settled with them. We don't necessarily agree that there should be a fine."

The problem arose after the city approved extending a water line to the Golden Estate subdivision, being constructed north of Custer Avenue and east of McHugh Street. Subdivisions with fewer than 50 lots can be reviewed and approved by the city; those larger than 50 lots need DEQ approval. The Golden Estate subdivision falls into the latter category.

Rundquist said the city submitted the plans to the state. After a period of time had elapsed the city assumed the project was approved, even though it hadn't heard from the state, and the city allowed the water line extension to be constructed and tested.

Nicole Olmstead with the DEQ's Enforcement Division said the state received the plans for water and wastewater extensions in June 2007, and that there was a "misunderstanding" over the water line review process.

"In October of 2007 the city of Helena sent the designing engineer a letter saying the water and sewer infrastructure was available for use," she said. "One week later, the department sent the city of Helena, the designing engineer and the construction company a violation letter, saying construction of that water main was in violation because they hadn't gotten department approval."

The plans were approved by the state in November 2007.

In previous years, as the housing boom swept into Montana, dozens of subdivision developers waited months for approval from the DEQ due to backlogs. So some developers just went forward with the installation and paid the fines, considering them the cost of doing business. As the practice became more prevalent, the DEQ began instituting fines more often as a way to penalize developers who didn't wait for approval as opposed to those who do.

"Engineers and subdivision developers need to go through the proper channels," Olmstead said.

The state had wanted a larger fine, Olmstead said, but after negotiations with the city agreed upon the $1,750 figure.

Rundquist said no homes had been constructed at the time of the violation, so there never was any threat to the public.

"This was not a public health issue, but more of an administrative violation," Rundquist said.

Reporter Eve Byron: 447-4076 or eve.byron@helenair.com