Clean Water Coalition will sue state to keep $62 million targeted by lawmakers

By Joe Schoenmann

Thursday, March 11, 2010 | 12:51 p.m.

Arguing that state legislators had no constitutional right to take $62 million collected to build a pipeline into Lake Mead, the Clean Water Coalition decided today to sue the state to keep the money.

The coalition’s board voted 3-1 to file a lawsuit, with only Las Vegas City Councilman Steve Ross voting against it.

Larry Brown, coalition board chairman, said allowing the state to take the money would set a “bad precedent,” adding that the money — from connection fees charged to developers — was collected for an “express project.”

“If the state has the legal ability to (take) capital funding to balance the state budget, it sets a horrible precedent,” he added.

Voting with Brown were Henderson Councilman Steve Kirk and North Las Vegas Councilman Robert Eliason.

The repercussions of their vote, however, could mean state’s schools will suffer. Barbara Buckley, speaker of the Assembly, told the Sun a week ago the state would reduce funding by 3.5 percent to public education and the state’s higher education system to make up for the $62 million, if it's lost. About $44 million would come from K-12 schools; and $18 million would come from universities' budgets.

The coalition cast their vote after its attorney, Bob Marshall, characterized suing as a “proactive” move, one that he felt had a very good chance of winning in court.

That conclusion differs from that of at least one casino that has paid large sums into the coalition’s fund. A spokesman for MGM Mirage told the Sun last week that its attorneys believed the state had the right to take the money. The casino-resort giant paid $362,000 in connection fees to the coalition.

Other casinos, including the Hard Rock, which paid $892,000, did not seem interested in suing.

But the M Resort in Henderson paid some $700,000 in connection fees and didn’t like the state’s move. So it sent a letter threatening to sue if the state took the money.

After the coalition board’s vote, attorney Chris Kaempfer, representing M Resort, said if the coalition wins a lawsuit against the state, M Resort would not ask for the money back “as long as it is being used for clean water purposes.”

But there’s a chance that even with a win, the coalition might cease to exist in the near future.

The coalition was created in the early 2000s to oversee construction of an $880 million pipeline that would funnel treated wastewater deep into Lake Mead. The idea was that it would better dilute the water than letting it drain into the shallow Las Vegas Bay, an inlet of Lake Mead.

Legislators have said they felt free to take the money because the coalition board voted to mothball the project in December, after member agencies argued the pipeline was no longer needed because wastewater treatment technology had improved so drastically.

Since the coalition’s primary mission was to build the pipeline, the coalition might have been expected to fold. Instead, the coalition board said its primary mission is to improve water quality and that could mean many things that might be expensive and might require the Clean Water Coalition to keep the money.

The coalition board was going to decide in future meetings if that meant they would keep the $62 million or refund it. The coalition also collects sewer fees totaling about $8 per year, totaling $7 million a year, from the average residence. The board still has not decided whether to keep collecting that money, lower the amount collected or to kill the fee altogether.