Nevada’s high court hears arguments on water connection fees

Wednesday, Dec. 13, 2000 | 11:08 a.m.

CARSON CITY -- A dispute between the city of North Las Vegas and Pardee Construction Co. over water connection fees that could eventually total $10 million was aired Tuesday before the Nevada Supreme Court.

James Olson, an attorney representing North Las Vegas, asked the court to overturn District Judge Sally Loehrer's decision that the construction company was not liable for those water hookups. But William Coulthard, representing Pardee, argued a 1988 contract stopped the city from imposing these fees.

In 1988, the city and the company agreed to a contract for the construction firm to develop up to 8,500 homes in a desert area to be named El Dorado. Included in the agreement was wording stating that the city would not increase or impose certain impact fees.

Three years later, the city became part of the Southern Nevada Water Authority, which supplied its water. The authority imposed a connection charge on the city to finance its operation. And North Las Vegas sought to pass it along to Pardee in its El Dorado development.

Olson argued this was not an impact fee barred by the 1988 agreement. This is nothing but a "cost-based fee" and the city does not receive any money for development of projects, he said.

"We make no revenue. It is collected from all developers. It (the money) is not involved in any capital improvement belonging to North Las Vegas," Olson said.

Even if it is found to be a development impact fee, Olson said North Las Vegas has no control over the rates. If the city does not pay the Southern Nevada Water Authority, it would not receive any water.

But Coulthard argued that Pardee took a "large risk" when it agreed with the city to develop 1,080 acres in "No Man's Land." It opened a new area and the city failed to plan for its water needs, he said.

The contract, he said, does not permit impact development fees. The water hookups are about $3,400 for a three-quarter inch pipe, he told the court. The city, Coulthard said, could have vetoed these increased fees by the water authority, since it was a member.

"The (1988) agreement precludes development fees. The city surrendered its ability to increase development impact fees," Coulthard said.

But Olson said that Pardee was "not the savior of North Las Vegas." He said there are other developments that have added to the city.

North Las Vegas City Attorney Sean McGowan said the city already has paid $2.2 million in fees to the water authority on behalf of Pardee. And he said the cost could balloon to $10 million.

So far about 2,500 to 3,000 homes have been developed in the area, said Coulthard.

The court will rule later on the arguments.